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BA 212 Extra Credit – Financial Analysis Project

This financial analysis project is worth 30 points. It is due on Saturday 9/7 11:59pm. Please prepare

the following and submit via your D2L Assignment submission folder as a word document or pdf file.

1. Choose two companies (see the list below) in the same industry for your analysis. You will compare these companies to one another to determine into which one you will suggest the investors put their money.

• Lowe’s versus Home Depot

• General Motors versus Ford Motor

• Kroger versus Target

• Intel versus AMD

• Nike versus Under Armour

• FedEx versus UPS

2. An Excel spreadsheet with the financial statement analysis calculations listed below. You will have a template to complete. You can add more accounts to the listed items on the template, depending on the information provided on the financial statements for your company. (You can complete the analysis and copy the tables into your word document)

3. Prepare a short report about your conclusions as to the company you’re recommending for investment and why. Include your analysis of the companies, the industry trends, and the direction/performance of your company as your reasons.

You should include the following in your financial statement analysis calculations (as shown in the template) as long as the information is available in the income statement and balance sheet. You might be required to take a closer look at the annual report for more accurate information:

• Horizontal analysis of the Income Statement and the Balance Sheet for each company with dollar change and percent change for the two most current years.

• Vertical analysis of the Income Statement and the Balance Sheet for each company for the most current year using percentages only.

• Working capital

• Current ratio

• Cash ratio

• Acid-test (Quick) ratio

• Inventory turnover (if applicable)

• Days’ sales in inventory (if applicable)

• Gross profit percentage

• Accounts receivable turnover (if applicable)

• Day’s sales in receivables (if applicable)

• Debt ratio

• Debt-to-equity ratio

• Times interest earned ratio

• Profit margin ratio

• Return on total assets

• Asset turnover ratio

• Return on common stockholders’ equity

• Earnings per share

• Price/earnings ratio

• Dividend yield (if applicable)

• Dividend payout (if applicable) To find the data for your analysis, please use the S&P NetAdvantage website. You can access it using the following steps:

1. Follow this url to the PCC Library website: https://www.pcc.edu/library/research/find/databases/

2. Click on the letter “S” 3. Click on the link for S&P NetAdvantage 4. Enter your PCC username and password; then click on the LOGIN button 5. On the top menu pause your cursor over COMPANIES; in the dropdown menu click on the link

for Companies 6. In the search box enter a company name or symbol (say, NKE) and click on the Search button 7. On the left side of the page, under Financials/Valuation. you can find Key Stats, Income

Statement, Balance Sheet, and Cash Flow. Sample Write-Up Format:

• Name, title and course information ONLY on a cover sheet.

• Executive Summary (Optional)

• Introduction (Brief background of the two companies)

• Results – using Excel workbook

• Discussion (Discussion of Ratios)

• Appendix – Excel workbook showing all your ratios for both companies

• Suggested Format: Typed, 1-in. margins, 12-point font