Select 2 competitors that are public companies. For example, you might select Coke and Pepsi (Don’t pick these two) Locate the 10-K (and the annual report) filed by the companies with the Securities and Exchange Commission (SEC). The total project is worth 80 points.
( I have chosen UPS and FEDEX)
1) Prepare comparative and common size balance sheets and income statements for the most current 2 years available (e.g. 2019, 2018) for both companies. Present the common size financial statements and the comparative financial statements on an Excel Spreadsheet. Make sure the financial statements are as of the year-end for the companies (25 points). List the year-end of the company.
2) Calculate all of the following ratios for the two years for each company: Current Ratio, Quick Ratio (Acid-Test), Accounts Receivable Turnover (if applicable), Debt Ratio and Equity Ratio and Debt to Equity ratio, Write at least one sentence about each ratio and explain what it might reveal about the company’s financial health. Compare these ratios to the industry (25 points).
3) List 3 fun facts about the company. (For example, the company was named after someone’s granddaughter or it was founded in someone’s garage)
4) How many shares of stock are issued and outstanding for each company? What types of stock have the companies issued (common and preferred)? Did the companies pay dividends? If so, when and how much per share was paid. This is for the most current year.?
5) List the inventory costing method of each company (e.g. FIFO, LIFO, Weighted Average, or Specific Identification). What is the total inventory dollar amount on the balance sheet for both companies for both years. Look in the notes to the financial statements for “inventories”
6) Look for the report of the independent registered public accounting firm. This is for the current year. It is usually after the financial statements and report of management and the notes to the financial statements. List the audit opinion from the public accountants who audited the company at year-end. For example, usually the financial statements are “fairly presented in all material aspects” if the opinion is unqualified. If you are unable to find this information, let me know.