Accounting Capstone

The next day, the CFO asks you, your new financial analyst, and the firm's marketing manager to come to his office. He hands you a file of financial statements from the company's two competitors in the computer hardware industry. He says that the CEO has requested a report analyzing the company's two main competitor's financial statements and predicting their next big moves. In turn, this will provide him with some guidance on how to prepare a counterstrategy in the coming year for your company.

He requests that the team do the following:

• Decide on the 5 ratios that you will use to monitor the health of your 2 competitor companies.
• Find the most recent financial statements for both computer hardware industry competitors.
  • The easiest Web site to use is www.msn.com. Type in the company symbol and go to "financial results" on the left side of the screen.
• Calculate (or find already calculated for you) the same 5 ratios you decided on for each of the 2 computer hardware industry competitor companies.
• Write a report of 600–750 words to your CEO (with charts and/or tables) including the following:
  • the results of the 2 competitor company's ratios, including citations and references
  • an interpretation of the health of each company based on the ratios for each company
  • Use the ratio results to make predictions about what each competitor company will do to improve each of those 5 ratios in the coming year.
  • List and explain at least 2 specific challenges that the competitor company's managers may face when trying to improve these ratios.
  • Completely and solely based on the team's research, ratio calculations, and predictions, explain which company the team believes is the stronger competitor your company faces, and why

   

  My part for this assignment:

  
  

  • Use the ratio results to make predictions about what each competitor company will do to improve each of those 5 ratios in the coming year.
  • List and explain at least 2 specific challenges that the competitor company's managers may face when trying to improve these ratios.

   

  
  Here are the ratio's and company's I picked

  Here are the ratio's and company's I picked to examine.

   

   

  	Lexmark International	Lenovo Group	Industry Average
  Debt/Equity Ratio	.56	.62	0.58
  Current Ratio	1.58	1.11	1.14
  Quick Ratio	1.10	.82	0.66
  Return on Asset	1.99	4.54	4.79
  Profit Margin	1.89	2.19

   

  This will give us something to work on.