finance class

Sheet1

Financial Analysis Project
For this project, you will be randomly assigned a publicly-traded company. Once given your company, go online to www.sec.gov to find the 12/31/15 and the 12/31/14 financial statements (or closest to those dates if on a different fiscal year). Include a copy of the Balance Sheets and Income Statements for both years in your excel file. Next, calculate the 12/31/15 and 12/31/14 ratios using the financial statements you printed, including all of the following: • Current ratio • Quick ratio • Inventory turnover ratio • Days sales outstanding (DSO) • Net profit margin • Return on total assets (ROA) • Return on equity (ROE) • P/E ratio You must use the Excel spreadsheet template to calculate these ratios. Next, locate the industry averages for these same ratios available through Hoovers. Copy the industry average information into your Excel document, to show the source of your data, and be sure to cite your sources. Using the company’s year-over-year results (2015 versus 2014) and a comparison of 12/31/15 results to the industry averages, write a brief report to analyze the company’s performance in terms of its liquidity, asset management, and profitability. Finally, in the same report, answer these questions: (1) If you were an investor, would you buy this company’s stock? Why or why not? (2) If you were a commercial lender, would you approve a loan for this company? Why or why not? Incorporate the calculated ratios to explain your answers to these questions. Industry averages can be found online; the Hoovers database available in the library is an excellent source for these.
Ratios:	2015	2014	Industry		Information:	2015	2014
Current ratio	1.09	1.50	0.42		Current Assets	20,053	22,191
Quick ratio	0.85	1.20	0.36		Current Liabilities	18,371	14,773
Inventory turnover ratio	6.05	6.57	2.77		Account Receivable	8075	7960
Days sales outstanding (DSO)	76.39	72.08	62.7		Inventory	4420	4405
Total asset turnover ratio	0.78	0.89	0.76		Cash	5455	6959
Net profit margin	13%	11%	7.8%		Investments	2103	2145
Return on total assets (ROA)	10%	10%	3.90%		Market Price of Company	102.98	97.34
Return on equity (ROE)	26.5%	24.5%	11.8%		Property Plant and Equipment	5,789	5,383
P/E ratio	17.05	18.26	316.31		Net Income	4,847	4,329
					Interest	310	318
					Total Stockholders Equity	18283	17,657
					Assets	49316	45451
					Sales	38,581	40,306
					Cost of Goods Sold	26,747	28,957
					EPS	6.04	5.33
References
http://finance.yahoo.com/q/hp?s=HON&a=11&b=31&c=2014&d=11&e=31&f=2015&g=d&z=66&y=198
http://csimarket.com/stocks/HON-Financial-Strength-Comparisons.html
www.honeywell.com/-/.../Honeywell.../2015%20Annual%20Report%20... Cached
http://www.myaccountingcourse.com/financial-ratios/price-earnings-ratio

Describe the firm's liquidity position here: Liquidity of the company has undergone a decline over the past two years and both current and quick ratios have fallen in value. However the liquidity position remains strong in contrast to the industry average.

Describe the firm's efficiency here: The overall efficiency of the company between two year's under observation has undergone a decline as evidenced from a decline in inventory and asset turnover ratios along with an increased receivable days. The turnover ratios however remained stronger than the industry average.

Describe the firm's performance here: The overall profitability of the firm has been strong and has shown an increase between the years 2014 and 2015. More specifically the net profit margin , ROA and ROE all showed improved figures in the year 2015 as compared to 2014. The said measures were also significantly higher than industry averages.

As a commercial lender would you approve a loan for this company? As a commercial lender I would approve the loan for the company based on its strong profitability and good liquidity position as compared to the industry.

As an equity investor would you purchase shares in this company? No, I would not purchase the company shares based on its low P/E ratio in contrast to the industry average.

http://csimarket.com/stocks/HON-Financial-Strength-Comparisons.html http://finance.yahoo.com/q/hp?s=HON&a=11&b=31&c=2014&d=11&e=31&f=2015&g=d&z=66&y=198 http://www.honeywell.com/-/.../Honeywell.../2015%20Annual%20Report%20...Cached http://www.myaccountingcourse.com/financial-ratios/price-earnings-ratio

Income Statemet

Balance Sheet