You will compare these two companies to determine the one business you will suggest to your client to invest $5,000. Please make your own assumption if the investment is a short-term or a long-term holding. Sector: consumer staples–Companies: Walmart VS Target.
To find financial data, please use the S & P NetAdvantage website.
Processing of data:
In the Excel spreadsheet created as mentioned in 2 above, please include the following towards your financial statement analysis:
-Horizontal analysis of the financial statements for each company with dollar change and percent change for the two most current years.
-Vertical analysis of the financial statements for each company using percentages only.
-20 financial ratios for each company as follows:
Working capital
Current ratio
Cash ratio
Quick Ratio
Inventory turnover
Days in Sales Inventory
Gross Profit Percentage
Accounts receivable turnover
Day’s-sales-in-receivables
Debt ratio
Debt to Equity
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
~Please note: In case you are unable to include any of the financial ratios indicated in 3 (c), please add the reason why that is so. For example, a company may not have declared and paid dividends which means some of the ratios cannot be calculated.
Analysis and interpretation of data:
a) Based on the Excel templates you have created for Horizontal Analysis, Vertical Analysis and Ratio Analysis, discuss on each company’s profitability, liquidity and solvency. Support your narrative with data and feel free to use tables, charts or graphs.
b) You can go through the Cash Flow statement for both companies to check year over year for trends and changes to detect any warning signs.
Pick 5 key ratios that are relevant for investment purposes and compare company A to company B.
Please provide
insights (if any) based on your research of the MD & A (Management Discussion & Analysis) as to why a particular ratio is better or worse than the prior year.
your own explanation of what has caused the ratio to be better or worse than the prior year (please be specific).
Feel free to support your narrative with charts and graphs.
Interesting facts: List and briefly discuss the top 5 things (besides the financial ratios) you find interesting about the two companies. The better grades will make sure this part of the write-up is truly interesting and insightful.
Develop conclusion and recommendations: Arrive at your decision on which company stock you are recommending to your client for investment.
Prepare the Financial Analysis report (preferably as a pdf) and organized as follows:
-Cover page
-Table of Contents
-Introduction
A brief on the significance of Financial Statement Analysis.
How Financial Statement Analysis is used specifically for investment decisions.
Reasoning why you picked the two companies.
-Excel Worksheets for both companies that show:
Horizontal Analysis for two years
Vertical Analysis for two years
20 Financial Ratios
-Discussion on the two companies based on results from (d) focusing on profitability, liquidity, and solvency
(Feel free to use charts or graphs to support your analysis).
-Discussion on 5 specific ratios relevant for investment purposes for both companies.
(Feel free to use charts or graphs to support your analysis).
-Top 5 interesting facts (besides ratios) for both companies based on MD&A. Focus on factors relating to the economy, market trends, industry risks, global presence, etc.
-Develop conclusions and present recommendation to your client on which of the two companies is preferred for investment.
-A conclusion: An overall review of your project and please include feedback on learning experience, challenges, etc.
-Include Citations.
The post You will compare these two companies to determine the one business you will sugg appeared first on Course Hero.
