Ratio Analysis Project
The project is an exercise of fundamental analysis of a firm using ratios. You are expected to calculate a number of ratios for a firm and analyze its financial condition. As the main outcomes of the project, upload 2 files on Canvas: Project Report (word/pdf) and Calculation (excel).
- Pick a prominent non-financial public firm (except Walmart) from any industry. Calculate the following ratios for your chosen firm for 2018 and 2019 (if data for 2020 is available, use 2019 and 2020 data)
Liquidity Ratios:
Current Ratio
Quick Ratio
Cash Ratio
Solvency Ratios:
Total Debt Ratio
Debt-equity Ratio
Times Interest Earned Ratio
Turnover Ratios:
Inventory Turnover
Receivables Turnover
Total Asset Turnover
Profitability Ratios:
Profit Margin
Return on Assets (ROA)
Return on Equity (ROE)
Market values Ratios:
Price-earnings Ratio
Price-sales Ratio
Market-to-book Ratio
- Investigate the firms financial condition in 2019 (by comparing with 2018) in terms of its Liquidity, Solvency, Turnover, Profitability, and Market Values by analyzing the calculated ratios. How the firms performance changed through time? Based on your analysis, comment on the future prospect of the firm from an investors viewpoint.
Instructions:
- Consistent with the university academic integrity policy, your submission MUST be your original work.
- Show all your works/calculation in an excel file (Question 1). The required financial statements (Income Statement and Balance Sheet) must be presented in excel; calculate all the ratios from those data using excel formula.
- Use a word/pdf file for the analysis part (Question 2). There is no page limit for the Project Report. The length of the report depends on the work needed in completing each of the components of the project.
- For both calculation and analysis, use extensively the content of Chapter 3: Working with Financial Statements.
- Use reliable web sources for financial statements such as Bloomberg, Yahoo Finance, Edgar etc.
- The grade for the project depends on the quality of work in terms of accuracy, analyses, completeness, organization, writing, and relevance.
