Buss 4113
Write a 200 - 400 word paragraph including general facts about the industry in which your companies operate. Also summarize each company (in your own words) from reading the Form 10-K. Do not copy and paste information; put the information in your own words.
Statement of cash flows
1. Now locate the statement of cash flows. List the page number from the most recent Form 10-K where you found it.
2. Which method (direct or indirect) does the company use to report cash flows from operations? How do you know?
3. Did the company buy or sell more plant assets in the most recent year as compared to the prior two years?
4. Did the company buy back any of its own stock? Did it pay any dividends?
5. What type of activity (operating, financing, or investing) in total generated the most cash flows for the company in the most recent year? What conclusions can you draw?
Ratio analysis
Calculate and interpret the following ratios and measures. You should complete the following in Excel and embed the worksheet in the word document you will be submitting.
Liquidity Measures – working capital, current ratio, acid-test ratio
Activity Measures – Total Asset Turnover, Inventory Turnover, Numbers of Days in A/R
Profitability Measures- ROI, DuPont Model. Return on Equity
Financial Leverage Measures – Debt Ratio, Debt/Equity Ratio
Horizontal Analysis (most recent year only -income statement and balance sheet )
Common Sized Statements (Vertical Analysis) (most recent year only -income statement and balance sheet )
Overall analysis
This section is the overall analysis of your two companies. Which company do you believe is healthier? Why? Which company would you be more likely to invest in? Why? Be specific in your reasoning.
Be sure to fully support your conclusion of which company is healthier. Be sure to include a variety of measures, not just one measure of financial health.