Business Finance Homework Help

Need help with my Accounting question – I’m studying for my class.

Pick a publicly-traded company that you are interested in.   This discussion will be based on a ratio analysis of the financials for that company.

Go to Yahoo!Finance (link under Course Materials at left) and enter the name of the company you wish to search.  You will see that this site has a lot of useful information on publicly traded companies.  Select the stock symbol for your company.  Read the Profile and some of the news articles so that you are familiar with the company’s major areas of business and competitors.  (You may also use Google Finance, or another similar site if you wish.)

You will see a menu item across the page labeled “Financials”.  There you will find the balance sheet and income statement with information required to run the ratios.  For the most recent 2 fiscal years, compute the following ratios: current ratio, debt ratio, operating profit margin, inventory turnover, accounts receivable turnover, times interest earned, return on equity.  Then answer the question:  Have the operations improved over the prior year?  Why or why not?  What area(s) could use improvement, if any?

Note: When looking for the common shareholders’ equity, check that there is no preferred stock.  (If there is, you should deduct this from total stockholders’ equity.)  Treasury stock represents funds that the company has used to buy back its own shares.  Since the common shareholders are the residual owners, all of the items in the stockholders’ equity section (except preferred stock if there was any) are assignable to common stock.  So, if there is no preferred, you can use total stockholder’s equity for the ratio.