ection $1$: Vertical Analysis $($Common Size Analysis$)$

Perform a vertical analysis in relation to revenue for the items on the income statement only, for each of the two companies. $(18$ marks$)$

The information from the raw data tab is to be transferred to the Income Statement tabs for each company. Calculate the vertical analysis percentages for each company and then copy those numbers to the Vertical Analysis tab and complete the comparison.

Section $2$: Ratio Analysis

Compute the ratios for the following categories for each company:

$$ Profitability

$$ Liquidity

$$ Solvency

$$ Market value

Present in chart form and show calculations used. $(36$ marks$)$

Discussion of ratios $(46$ marks$)$ For each ratio, you should comment on some of the following:

$$ What is the relative position of each of the corporations?

$$ What is being measured?

$$ What does it mean? Is this good news or bad?

Section $3$: Conclusions$/$Recommendations

Draw your conclusions from the data gathered in the previous sections and determine the relevant position of each of the corporations in all of the analyses. The conclusions$/$recommendations must address the following as a comparison between the two companies:

$$ Summarize the overall strengths and weaknesses of each corporation.

$$ Your final recommendation as to which company your client should invest in$,$ explaining key reasons why it is the better choice