Find out what makes difference in roes between your company

Assignment Help Corporate Finance
Reference no: EM131709991

Assignment

For this assignment, each of you should choose two companies. When you choose two companies, you should make sure that two companies are from the same industry. One company is considered your company and the other is considered competitor. Once you make a decision about two companies, you should let me know what your choices are via email before you proceed.

Companies chosen are: Southwest Airlines and United Airlines. My company is Southwest Airlines... My competitor is Unites Airways.

The following are the questions you should answer. You can find 2015 & 2016 Balance Sheet and Income Statement at yahoo finance.

1. (Common-size Balance Sheet & Common-size Income Statement Analysis)

1) With 2015 & 2016 balance sheet & Income statement for each company, create common -size balance sheets and common-size income statements.

2) Using 2016 common-size balance sheet and income statement, compare your company with the benchmark and describe how your company is similar to or different from the benchmark.

3) Using 2015 & 2016 common-size balance sheet and income statement of each company, do the time trend analysis and describe how each company changes over time.

2. (Financial Ratio Analysis) Using 2015 & 2016 Balance sheet & Income statement for each company, compute the following financial ratios for each company:

1) Current ratio
2) Quick ratio
3) Debt-to-equity ratio
4) Times interest earned ratio (Interest coverage ratio)
5) Inventory Turnover
6) Receivable turnover
7) Total asset turnover
8) Profit margin
9) Return on Asset (ROA)
10) Return on Equity (ROE)
11) Price-earnings ratio
12) Market-to-book ratio

3. (Financial Ratio Analysis) Select the benchmark for peer group analysis. You'll use two kinds of benchmarks in this assignment. One is your competitor's ratios and the other is industry averages (you can find industry averages from finance.yahoo.com or www.reuters.com or investing.money.msn.com). Make sure that you cite the source of industry averages.

1) Using the 2016 ratios from Question 2, compare your company's ratios to both competitor's and industry averages. Then describe how good or bad ratios of your company are considered.

2) Using 2015 & 2016 ratios for your company, compare your company's 2015 ratios with 2016 ratios and describe the similarities and differences.

4. (DuPont Identity)

1) Using the DuPont Identity equation, compare your company's 2016 ROE with competitor's 2016 ROE. Find out what makes difference in ROEs between your company and competitor.

2) Using the DuPont Identity equation, compare your company's 2015 ROE with 2016 ROE. Find out what makes difference in ROE between two periods if there is any difference.

Reference no: EM131709991

Questions Cloud

Test to determine which investment mode is better : An article in Money compares investment in an income annuity, offered by insurance companies, and a mix of low-cost mutual funds.
Was the cause of their ptsd clearly identifiable : Was the cause of their PTSD clearly identifiable? To what extent was any treatment described identifiable as an evidence-based best practice?
Define use of technology by law enforcement : Should there be limits on the use of this technology by law enforcement
Does cmc enhance human communication or detract from it : Does CMC enhance human communication or detract from it? Weigh both sides in your response.
Find out what makes difference in roes between your company : Find out what makes difference in ROEs between your company and competitor. Find out what make difference in ROE between two periods if there is any difference.
What is the change in consumer surplus : EBF 484-ENERGY ECONOMICS PROBLEM SET. If the crude oil producer acts as price-taking firm, what is the change in consumer surplus as a result of price ceiling
Discuss the type of investment : Annualized rates of return for the two investments during separate eight-month periods are as follows. Is one type of investment better than the other? Explain.
Why do you think good leaders fail : Why do you think good leaders fail?Which leadership theories support your reasoning about why good leaders fail?
Utilize the facts, issue and analysis method : Utilize the Facts, Issue, Analysis, and Conclusion (FIAC) method. Write in detail, define terms and relevant laws

Reviews

Write a Review

Corporate Finance Questions & Answers

  Impact of the global economic crisis on business environment

This paper reviews the article of ‘the impact of the global economic crisis on the business environment' that is written by Roman & Sargu (2011).

  Explain the short and the long-run effects on real output

Explain the short and the long-run effects on real output, price, and unemployment

  Examine the requirements for measuring assets

Examine the needs for measuring assets at fair value in accounting standards

  Financial analysis report driven by rigorous ratio analysis

Financial analysis report driven by rigorous ratio analysis

  Calculate the value of the merged company

Calculate the value of the merged company, the gains (losses) to each group of shareholders, NPV of the deal under different payment methods. Synergy remains the same regardless of payment method.

  Stock market project

Select five companies for the purpose of tracking the stock market, preparing research on the companies, and preparing company reports.

  Write paper on financial analysis and business analysis

Write paper on financial analysis and business analysis

  Intermediate finance

Presence of the taxes increase or decrease the value of the firm

  Average price-earnings ratio

What is the value per share of the company's stock

  Determine the financial consequences

Show by calculation the net present value for the three alternatives (no education, network design certification, mba). Also, according to NPV suggest which alternative you advise your friend to choose

  Prepare a spread sheet model

Prepare a spread sheet model for the client that determines NPV/IRR with and without tax.

  Principles and tools for financial decision-making

Principles and tools for financial decision-making. Analyse the concept of corporate capital structure and compute cost of capital.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd