Module $3$ Assignment $($Group Assignment$)$

Chapter $4$: Financial Ratios I

If you have questions regarding this assignment, they must be sent at least $24$ hours prior to the deadline.Questions sent within $24$ hours will not be accepted.

In Module $2,$ you were assigned to a group, and your group was assigned to a specific set of companies. Your group will be performing a profitability analysis on these two companies using the formulas found in Chapter $4.$

In this assignment, you will have the opportunity to demonstrate your ability to$$

Work as a group to develop a report that can be used for decision making.

Use Excel to create and format reports.$$

Calculate financial ratios for profitability analysis.

Instructions

Access $10-$k$$s for your two companies on the SEC.gov website, and copy these statements into Excel. You will need the company$$s income statement, statement of stockholders$$ equity$/$retained earnings, and the balance sheet.$$

Format the statements so that they are easy to read and understand in Excel.$$

Using Excel formulas and proper cell referencing, calculate the following financial ratios for the last two years for both companies:

Basic Earnings per Share $($EPS$)$

Return on Assets $($ROA$)$

Return on Common Shareholders$$ Equity$$

Accounts Receivable Turnover$$

Inventory Turnover

Fixed Assets Turnover

This means that you should have four ratios for each of the above $($a$-$f$)--$two for each company. You can lay out this information as you see fit. As always, remember that these reports should be clean, easy to read and understand, and useful for decision$-$making purposes. If the company$$s nature does not allow you to calculate a certain ratio, you must write up why it is not possible to calculate that specific ratio.

Pick two of these ratio groups $($a$-$f$)$ and tell me what they mean. I do not want to just hear that the ratio increased or decreased or that it is larger for one company compared to the other. I want to know what the increase$/$decrease means and$/$or what the cause may be$.$ Think like a businessperson and use your professional judgment.$$

Please use the ratio formulas from the textbook. You can use external resources to research specific line items on the financial statements and to glean more information on what certain ratios are measuring, but please be cautious of plagiarism. Any academic dishonesty will result in a $0$ or an F in the course. When you are finished, your communication liaison $($and only your communication liaison$)$ should submit the file$($s$)$ in the dropbox provided. At least one Excel file $($no numbers files$)$ should be submitted, so I can analyze your ratios and how they were calculated. If you would like to get creative and include other file types $($e$.$g$.$ Word, PowerPoint, etc.$)$ in your project submission, you are welcome to do so$.$ Choose Biogen vs Merck Company