Reference no: EM133522362

Project Homework: Competitor Analysis

Overview

Competitor #1 Income Statement (Tab 5), Competitor #1 Balance Sheet (Tab 6), Competitor #1 Cash Flows (Tab 7), Competitor #2 Income Statement (Tab 8), Competitor #2 Balance Sheet (Tab 9), Competitor #2 Cash Flows (Tab 10), Historical and Competitor Ratios (Tab 11)

Instructions

Continue in the same Excel workbook prepared in Module2: Week 2, adding the following tabs:

A. The 5thtab and 8th tabs in your Financial Statement Analysis Template must be labeled (CompetitorCompany Name) Income Statements. (Replace "Competitor Company Name" with the name of the competitor.)

1. Include the latest three yearsof income statements for your competitor based on SEC filings.

2. Ensure that the worksheet includes a header with:

a. Company Name

b. Financial Statement Name (Income Statements)

c. Financial Statement Dates

d. Denomination level ($s in millions or thousands, etc.)

B. The 6th and 9th tabs in your Financial Statement Analysis Template must be labeled (Competitor Company Name) Balance Sheets. (Replace "Competitor Company Name" with the name of the competitor.)

1. Include the latest three yearsof balance sheets for your first competitor based on SEC (10-K) filings. (Note: Some 10-Ks only provided 2 years of balance sheet data. You may need to download the second most recent 10-K for your company in order to obtain 3 years of balance sheet data.)

2. Ensure that the worksheet includes a header with:

a. Company Name

b. Financial Statement Name

c. Financial Statement Dates

d. Denomination level ($s in millions or thousands, etc.)

C. The 7th and 10thtabs in your Financial Statement Analysis Template must be labeled (Competitor Company Name)Cash Flows. (Replace "Competitor Company Name" with the name of the competitor.)

1. Include the latest three years based on SEC (10-K) filings.

2. Make sure that the Income Statement, Balance Sheet, and Cash Flows Statement tie in as follows:

a. Net Income from Income statement agrees with Net Income on the Statement of Cash Flows

b. Ending Cash Balance from Statement of Cash Flows agrees with Cash in the Balance Sheet

D. The 11thtab in your Financial Statement Analysis Template must be labeled Historical and Competitor Ratios

1. The list of ratios to be included are as follows. They should be grouped under the headings, as shown:

a. Liquidity Ratios

i. Current Ratio
ii. Quick Ratio

b. Leverage Ratios

i. Debt to Total Assets Ratio
ii. Debt Equity Ratio
iii. Long-Term Debt to Equity
iv. Times Interest Earned Ratio

c. Activity Ratios

i. Inventory Turnover
ii. Fixed Assets Turnover
iii. Total Assets Turnover
iv. Accounts Receivable Turnover
v. Average Collection Period

d. Profitability Ratios

i. Gross Profit Margin
ii. Operating Profit Margin
iii. Net Profit Margin
iv. Return on Total Assets (ROA)
v. Return on Stockholders' Equity (ROE)
vi. Earnings Per Share (EPS)
vii. Price Earnings Ratio

2. Calculate the ratios for your chosen company for the last three years, linking the ratio calculations back to the historical financial statement tabs (Tabs 2-4) using formulas.

3. Calculate the ratios for each of your company's competitors (most recent year only), linking the ratio calculations to the competitor financial statements shown in Tabs 5-10 using formulas.

4. Using the internet, locate the industry averages for the ratios listed above, and include them in the final column of the ratio tab. Include a footnote on the tab to identify the source of the industry averages.

E. Other instructions:

1. The Excel workbook should be professionally formatted. Professional formatting includes:

a. All numbers are formatted similarly. The use of decimals, commas for thousands, and other formatting is consistent.
b. Dollar signs are included in the first and last numbers of each column.
c. Subtotals and totals are preceded by a single underline. Totals are followed by a double underline.
d. Line descriptions are indented/bolded in a manner that makes the spreadsheet easy to read.

2. All totals and subtotals in the competitor financial statements as well as the ratio calculations should be calculated using formulas.