Purpose of Assignment
Students should understand how to use the financial information and tools learned in the class on a public company, obtain public company SEC reports, and use that data to calculate a company’s financial ratios and their comparison to industry or competitor standards.
Assignment Steps
Resources: Tutorial help on Excel® and Word functions can be found on the Microsoft®Office® website. There are also additional tutorials via the web that offer support for office products.
Select one of the publicly traded corporations listed below and obtain the most current SEC Form 10-K (annual financial report) from the company’s web site (Do not use the Annual Report that is sent to shareholders):
- Lowes Corporation
- Kroger Corporation
- Harley Davidson Corporation
- Apple Corporation
- Intel Corporation
- Marriott Corporation
- Berkshire Hathaway Corporation
- PepsiCo Corporation
- Procter and Gamble Corporation
- General Electric Corporation
Calculate and analyze the following ratios for your selected company for the last two years from the SEC Form 10-K:
- Current Ratio
- Inventory Turnover
- Debt Ratio
- Time Interest Earned
- Gross Profit Margin
- Equity Multiplier
- Return on Assets
- Net Profit Margin
- Return on Equity (Use three ratio DuPont method)
Compare and contrast your company’s ratios to industry and competitor standard ratios obtained from Yahoo Finance, Morningstar, MotleyFool, Macroaxis or other Internet sources, and provide a detailed answer and analysis as to why your company’s ratios are different than the industry/competitor standard.
Prepare your analysis in a minimum of 875 words in Microsoft® Word. The use of Microsoft®Word tables is encouraged.
Cite the source of the industry/competitor ratio information.
Format your assignment consistent with APA guidelines.
Financial Ratio Analysis Grading Guide
FIN/370 Version 11
Finance for Business
Learning Team Assignment: Financial Ratio Analysis
Purpose of Assignment
Students should understand how to use the financial information and tools learned in the class on a public company, obtain public company SEC reports and use that data to calculate a company’s financial ratios and their comparison to industry or competitor standards.
Resources Required
Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web that offer support for office products.
Grading Guide
| Content | Met | Partially Met | Not Met | Comments: |
| Selects one of the publicly traded corporations listed and obtains the most current SEC Form 10-K (annual financial report) from the company’s web site. o Lowes Corporation o Kroger Corporation o Harley Davidson Corporation o Apple Corporation o Intel Corporation o Marriott Corporation o Berkshire Hathaway Corporation o PepsiCo Corporation o Procter and Gamble Corporation o General Electric Corporation
| ||||
| Calculates and analyzes the following ratios listed for their selected company for the last two years from the SEC Form 10-K. o Current Ratio o Inventory Turnover o Debt Ratio o Time Interest Earned o Gross Profit Margin o Equity Multiplier o Return on Assets o Net Profit Margin o Return on Equity (Use three ratio DuPont method) | ||||
| Compares and contrast your company ratios to industry and competitor standard ratios obtained from Yahoo Finance, Morningstar, MotleyFool, Macroaxis or other Internet sources and provide a detailed answer and analysis as to why your company ratios are different than the industry/competitor standard. | ||||
| The analysis is a minimum of 875 words (2 1/2 pages) in length. | ||||
|
| Total Available | Total Earned | ||
| 7 | /7 |
Writing Guidelines | Met | Partially Met | Not Met | Comments: |
| The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements. | ||||
| Intellectual property is recognized with in-text citations and a reference page. | ||||
| Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper. | ||||
| Sentences are complete, clear, and concise. | ||||
| Rules of grammar and usage are followed including spelling and punctuation. | ||||
| Total Available | Total Earned | |||
| 3 | #/3 |
| Assignment Total | # | 10 | #/10 | |
| Additional comments:
| ||||
Financial Ratio Analysis
Financial ratios help stakeholders and potential investors to determine the sustainability and potential profitability of an organization.
Performing a ratio analysis on the financial statements provides stakeholders and investors with insight of how the organization has performed.
The ratios are an indicator as to the financial health of the organization.
Healthcare providers should track the operating margin, operating EBIDA margin, days cash on hand, debt to capitalization, and capital spending ratios (Becker’s Hospital Review, 2012).
Why are these ratios important to the healthcare industry? Support your response with research in a few paragraphs and post your response to the discussion forum.
- Week 4 Overview
- Bai, G., & Anderson, G.F. (2016). A more detailed understanding of factors associated with hospital profitability. Health Affairs, 35(5), 889-897. https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2015.1193
- Kaufman, B.G., Thomas, S.R., Randolph, R.K., Perry, J.R., Thompson, K.W., Holmes, G.M., & Pink, G.H. (2016). The rising rate of rural hospital closures. The Journal of Rural Health, 32(1), 35-43.