You will have to compute Key Performance Indicators (KPI) and other ratios to understand financial performance, liquidity, profitability, leverage, trend and other.

The aim of this exercise is that the student not only computes but interprets and analyzes the firms situation in isolation. We will analyze the industrys performance and situation in further assignments during the course.

The public listed firms available for this exercise are:

NVIDIA corporation Johnson & Johnson PayPal Holdings Exxon Mobil Corporation CostCo Wholesale Corp Texas Instruments Corp Qualcomm Inc. Moderna Inc. Goldman Sachs Group Inc. Raytheon Technologies Corp. Caterpillar Inc. 3M Company Lockheed Martin Corp. Estee Lauder Cies. Inc.

Exercise:

Compute for any firm chosen from the above list the following ratios and explain in your own words how that ratio compares to average or normal performance or situation: (each computed, explained and analyzed item will get you 4.5 marks approx.)

Liquidity:

• Acid Test

• Cash Ratio

• Current ratio

• Inventory turnover

• Receivables turnover

• Payables turnover

• The operating cycle

• Cash conversion cycle

Cash Flow:

• CF coverage ratio

• Free CF / CF from Ops ratio

• CF from Ops / Sales Ratio

• Price / CF ratio

  Leverage:

• Debt Ratio

• Times Interest Earned Profitability:

  • Gross margin

  • Net margin

  • EPS

  • RoA

  • RoE Market:

  • P/E ratio

  • Market to Book

  • Market Cap