Comparative Analysis, Credit and Equity

In this Assignment, you will be assessed based on the following outcome: 

Examine the financial performance of a company using its financial statements.

This Assignment will firmly plant your feet in the world of Financial Statement Analysis, setting the stage for much of what you will do going forward. It is challenging, but will set you up with tools to make better business decisions going forward, in this class and in the real world. Locate the Case 1-3: Comparative Analysis, Credit and Equity on page 61 of your text. (Attached jpg)

Be sure to submit thoughtful and substantial answers to the questions following the case regarding the two companies analyzed. Provide the following information in a Microsoft® PowerPoint® presentation to the management team deciding on which bank stock to select: 

1. Compute the current ratio, acid test ratio, accounts receivable turnover, inventory turnover, days’ sales in inventory, and days’ sales in receivables ratios for both companies. 

2. Identify by this analysis the company that you consider the better short-term credit risk and explain why. 

3. Compute the net profit margin, total asset turnover, return on total assets, and return on common stockholders’ equity for both companies. 

4. Assume each company paid a cash dividend of $1.50 per share and that each company’s stock can be purchased at $25 a share. Compute each company’s price- earnings ratio and dividend yield.

 5. Identify which company’s stock you would recommend as the better investment and explain why. 

This is a challenging activity. You should prepare to spend a substantial time working on your response. Assignment Instructions This Assignment is to be submitted using PowerPoint. It should include a title slide with your name, course number, your instructor’s name, date, and the subject of the presentation.

The Assignment should include the following elements:  Introduction bullet point slide summarizing the project and the companies • A slide summarizing the ratio analysis of the two companies • A slide summarizing the credit risk analysis and decision  • A slide summarizing the asset and equity performance of both companies • A slide summarizing stock performance and your investment advice • A slide if needed for In-text citations and reference.