Financial Statement Analysis Project—A Comparative Analysis of Oracle Corporation and Microsoft Corporation

Here is the link for the financial statements for Oracle Corporation for the fiscal year ending 2011. First, select 2011 using the drop-down arrow labeled for Year on the right-hand side of the page, and then select Annual Reports using the drop-down arrow labeled Filing Type on the left-hand side of the page.

You should select the 10k dated 6/28/2011 and choose to download in PDF, Word, or Excel format.

http://www.oracle.com/us/corporate/investor-relations/sec/index.html

Here is the link for the financial statements for Microsoft Corporation for the fiscal year ending 2011. You should select the 10k dated 7/28/2011 and choose to download in Word or Excel format.

http://www.microsoft.com/investor/SEC/default.aspx?year=2011&filing=annual

A sample project template is available for download in Doc Sharing. The sample project compares the ratio performance of Tootsie Roll and Hershey using the 2009 financial statements of Tootsie Roll and Hershey provided in Appendix A and Appendix B of your textbook.

Description

This course contains a Course Project where you will be required to submit one draft of the project at the end of Week 5 and the final completed project at the end of Week 7. Using the financial statements for Oracle Corporation and Microsoft Corporation, respectively, you will calculate and compare the financial ratios listed further down this document for the fiscal year ending 2011 and prepare your comments about the liquidity, solvency, and profitability of the two companies based on your ratio calculations. The entire project will be graded by the instructor at the end of the final submission in Week 7 and one grade will be assigned for the entire project.

Overall Requirements

For the Final Submission:

Your final Excel workbook submission should contain the following. You cannot use any other software but Excel to complete this project.

A completed worksheet title page tab which is really a cover sheet with your name, the course, the date, your instructor’s name, and the title for the project.

A completed worksheet profiles tab which contains a one-paragraph description regarding each company with information about their history, what products they sell, where they are located, etc.

All 18 ratios for each company with the supporting calculations and commentary on your worksheet ratio tab. Supporting calculations must be shown either as a formula or as text typed into a different cell. The ratios are listed further down this document. Your comments for each ratio should include more than just a definition of the ratio. You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios.

The Summary and Conclusions worksheet tab is an overall comparison of how each company compares in terms of the major category of ratios (liquidity, profitability, and solvency). A nice way to conclude is to state which company you think is the better investment and why.

The Bibliography worksheet tab must contain at least your textbook as a reference. Any other information you use to profile the companies should also be cited as a reference.

Required Ratios for Final Project Submission

Earnings per share

Current ratio

Gross profit rate

Profit margin ratio

Inventory turnover ratio

Days in inventory

Receivables turnover ratio

Average collection period

Asset turnover ratio

Return on assets ratio

Debt to total assets ratio

Times interest earned ratio

Payout ratio

Return on common stockholders’ equity ratio

Free cash flow

Current cash debt coverage ratio

Cash debt coverage ratio

Price/earnings ratio [For the purpose of this ratio, for Oracle, use the market price per share on May 30, 2011 and for Microsoft, use the market price per share on June 30, 2011.]

Answer rating: 100% (QA)

Diluted earnings per share Microsoft 269 per sha... View the full answer