Financial Statement Analysis Project -- A Comparative Analysis of Oracle Corporation and Microsoft Corporation

Here is the link for the financial statements for Oracle Corporation for the fiscal year ending 2007. First, select 2007 using the drop-down arrow labeled for Year on the right-hand side of the page, and then select Annual Reports using the drop-down arrow labeled Filing Type on the left-hand side of the page.

You should select the 10k dated 6/29/2007 and choose to download in PDF, Word, or Excel format.

http://www.oracle.com/us/corporate/investor-relations/sec/index.html

Here is the link for the financial statements for Microsoft Corporation for the fiscal year ending 2007. You should select the Annual report dated 8/3/2007 and choose to download in Word or Excel format.

http://www.microsoft.com/investor/SEC/default.aspx?year=2007

A sample Project template is available for download in Doc Sharing. The sample project compares the ratio performance of Tootsie Roll and Hershey using the 2007 financial statements of Tootsie Roll and Hershey provided in Appendix A and Appendix B of your textbook.

Description | Overall Requirements | Grade Information

Description

This course contains a course project where you will be required to submit one draft of the project at the end of Week 5 and the final completed project at the end of Week 7. 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 2007 and prepare your comments about the liquidity, solvency and profitability of the two companies based on your ratio calculations. The entire project will be graded by the instructor at the end of the final submission in week 7 and one grade will be assigned for the entire project.

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 title page tab which is really a cover sheet with your name, my name, the class name, and the date.

2. 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.

3. 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.

4. 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).

5. The Bibliography worksheet tab must contain at least your textbook as a reference. Any other information you use to profile the companies should also be cited as a 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 [For the purpose of this ratio, use the market price per share on June 1, 2007 for each company]

The Excel files uploaded to the Dropbox should not include any unnecessary numbers or information (such as previous years' ratios, ratios that were not specifically asked for in the project, etc.).

Please upload your final submission to the Dropbox by the end of Week 7. See Syllabus/"Due Dates for Assignments & Exams" for due date information.

For the Draft:

Create an Excel spreadsheet or use the Project template to show your computations for the first 12 ratios listed above. The more you can complete regarding the other requirements the closer you will be to completion when Week 7 arrives. Supporting calculations must be shown either as a formula or as text typed into a different cell. If you plan on creating your own spreadsheet, please follow the format provided in the Tootsie Roll and Hershey template file.

Please upload your draft submission to the Dropbox by the end of Week 5. See Syllabus/"Due Dates for Assignments & Exams" for due date information.