Financial accounting

  For Sears Holding Corp and NIKE

1. Calculate profitability ratios - Using your companies’ financial statements, calculate the following ratios related to profitability for the past 3 years. Show the formulas used and the specific numbers used to calculate your ratio. Present this information in a user friendly format –  a set of tables from a spreadsheet for example.

a. Return on Assets (Ch 1)

b. Net profit Margin (Ch 3)

c. Gross Profit Margin (Ch 4)

d. Total Asset Turnover Ratio (Ch 8)

Analyze results -  Use your ratio results to evaluate what each ratio is telling you about the companies’ trends in profitability. Do your findings match up with management’s discussion of the companies’ business situation in question #1 above? Any trends in the ratios over the three years?

Compare to peer group - Discuss how each of your companies’ profitability compares to the average for your companies’ peer group.