Financial ratios are the principal tool of financial analysis. Ratios standardize the financial information of firms so comparisons can be made among firms of varying sizes. Choose two firms in the same sector/industry; locate their current financial information both in terms of current financial statements and stock market prices. You will need the most recent form 10-Ks of the companies for financial statements. The 10-k reports are accessible at http://www.sec.gov/edgar.shtml. An alternative means to obtain the report is by clicking on the SEC filings link on an organization’s website to obtain the latest Form 10-K filings. You can also find current stock valuation and other relevant stock information from financial portals such as Yahoo finance, Google finance, and Reuters.
With the information and calculations, write a 5-7 page paper under the following headings. How liquid are the firms? Are the firm’s managers generating adequate operating profits on the company’s assets?
How are the firms financing their assets? Are the firm’s managers providing a good return on the capital provided by the shareholders?Are the firms’ managers creating shareholder value?
You must show calculations and interpret the ratios. Ensure you follow APA- format throughout. In other words, your paper must include a title page, introduction, body (addressing the headings above), conclusion, and reference list. It must also have in-text citations and reference list. In addition to your textbook, you must cite only scholarly sources.