Morningstar website http://www.morningstar.com/analyst-research/stock-…SEC resource https://www.sec.gov/edgar/searchedgar/companysearc…Hoonuit site https://www.atomiclearning.com/login/snhu
RATIO ANALYSIS
Note: Please change the column names based on your industry and your selected companies.
RATIOS
Profitability Ratios (%)
Gross Margin
EBITD Margin
Operating Margin
Pretax Margin
Effective Tax Rate
Financial Strength
Quick Ratio
Current Ratio
LT Debt to Equity
Total Debt to Equity
Interest Coverage
Valuation Ratios
P/E Ratio
Price to Sales (P/S)
Price to Book (P/B)
Price to Tangible Book
Price to Cash Flow
Price to Free Cash Flow
Management Effectiveness (%)
Return On Assets
Return On Investment
Return On Equity
Dividends
Dividend Yield
Payout Ratio
Efficiency
Revenue/Employee
Net Income/Employee
Receivable Turnover
Inventory Turnover
Asset Turnover
Summary
What is ratio analysis? Briefly explain in this space, and reference your resources:
Referring to your ratio analysis above, in which company would you be willing to invest, and why?
ed companies.
es:
to invest, and why?
ANALYSIS
Overview: For this task, you will analyze the financial health of two competitors in the same industry based on their ratios, using the provided Excel spreadsheet
template. Then, you will complete your analysis by writing a short synopsis of your findings in the space below the analysis.
Prompt: Follow the steps below to analyze the financial health of two competitors. Use the Module Two Activity Template to complete this task.
Select two companies operating in the same industry (for example, Macy’s and Dillards). The companies have to be in the same business for the ratios to be
valuable to your analysis. Then, complete the template, providing the following:
Ratio Research: Use the template to analyze the selected ratios (profitability, financial strength, valuation, management effectiveness, dividends, and
efficiency) for both of the competitors. To complete this part, you can reference the Morningstar website in the Module Two resources to obtain the
ratios. You can also use the SEC EDGAR Company Filings resource from Module One to obtain the ratio from annual reports. Please note: The ratios have
to be from the same time period (the same year for both competitors). For training on how to use Excel, visit the Hoonuit training site or search YouTube
to find appropriate Excel training videos.
Industry Ratios: To analyze ratios for the companies, you also need to obtain the ratios for the industry that the competitors operate in. Industry values
for the ratios can be found in the index column. If no index value is available, put the five-year averages for both companies in the industry column and
use these figures for the industry comparison of your ratio analysis.
Ratio Analysis: Compare the two companies based on their ratios. Use the last column in the template to write in detail how each company is doing
based on the ratios. Compare the company ratios to the industry and each other.
Summary: This short write-up should be done directly in your Excel spreadsheet.
What is a ratio analysis? Briefly explain in about one paragraph. Please quote your resource.
o Referring to the ratio analysis, in which con would you be willing to invest and why?
o
Note: This is a theoretical exercise. You should not be investing according to this analysis.

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