Description
Using the financial statements for Oracle Corporation and Microsoft Corporation, respectively, you will calculate and compare the financial ratios listed further down this document for the fiscal year ending 2011 and prepare your comments about the liquidity, solvency and profitability of the two companies based on your ratio calculations.
Overall Requirements
For the Final Submission:
Your final Excel workbook submission should contain the following. You cannot use any other software but Excel to complete this Project.
1) A completed worksheet profiles tab which contains a one paragraph description regarding each company with information about their history, what products they sell, where they are located, etc.
2) All 18 ratios for each company with the supporting calculations and commentary on your worksheet ratio tab. Supporting calculations must be shown either as a formula or as text typed into a different cell.The ratios are listed further down this document. Your comments for each ratio should include more than just a definition of the ratio. You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios.
3) The Summary and Conclusions worksheet tab which is an overall comparison of how each company compares in terms of the major category of ratios (Liquidity, Profitability, and Solvency). A nice way to conclude is to state which company you think is the better investment and why.
4) The Bibliography worksheet tab must contain at least your textbook as a reference. Any otherinformation you use to profile the companies should also be cited as a reference (I will add text book reference).
Required Ratios for Final Project Submission
1) Earnings per Share
2) Current Ratio
3) Gross Profit Rate
4) Profit Margin Ratio
5) Inventory Turnover Ratio
6) Days in Inventory
7) Receivables Turnover Ratio
8) Average Collection Period
9) Asset Turnover Ratio
10) Return on Assets Ratio
11) Debt to Total Assets Ratio
12) Times Interest Earned Ratio
13) Payout ratio
14) Return on Common Stockholders' Equity Ratio
15) Free Cash Flow
16) Current Cash Debt Coverage Ratio
17) Cash Debt Coverage Ratio
18) Price/Earnings Ratio