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Finance assignment General Motors Vs. Ford
For each company and comparing the two, you are to write an eight to ten (8-10) page report that includes the following discussion topics:
1. A short background on each company, the industry and the market conditions in which they operate. This should be no more than one to two pages for both companies in total and can be a part of your introduction.
2. Compute the following financial ratios for each company. If you need help understanding the meaning of the ratios or how to they are computed, go to: http://www.investopedia.com/university/ratios/
- Liquidity measurement ratio: Current ratio
- Profitability indicator ratios: Return on assets · Return on equity
- Debt ratio: Debt ratio
- Operating performance ratio: Fixed asset turnover ratio
- Cash flow indicator ratio: Dividend payout ratio
- Investment valuation ratio: Price / Earnings ratio
Using the ratios you computed, discuss what these ratios tell us about each company's performance, and how the companies compare to the industry average. Feel free to use graphs/charts as comparisons for any or all ratios and then discuss the ratios of most relevance to these companies and their competitive performance.
Write an eight to ten page research paper on two group-selected competing companies. The eight to tenpages does not include the title page, graphs or references. I will assign groups in the next week or so. If you would prefer to do an individual paper, please let me know as this is an option, but you will still be required to complete all of the requirements.
Parameters:
Choose two corporate competitors and compare them from a financial perspective, not based on personal preferences.
Some examples of competitors to choose would be:
· Coca-Cola vs. Pepsi-Cola
· Ford Motor Company vs. General Motors
· Mars vs. Hershey
· Proctor and Gamble vs. S.E. Johnson
· Miller Brewing vs. Anheuser-Busch
· Polaris vs. Arctic Cat
I will have you inform me of your selection of competitors and why you selected them as a discussion topic in Week 4, so your group will have to decide by then.
Requirements:
For each company and comparing the two, you are to write an eight to ten (8-10) page report that includes the following discussion topics:
1. A short background on each company, the industry and the market conditions in which they operate. This should be no more than one to two pages for both companies in total and can be a part of your introduction.
2. Compute the following financial ratios for each company. If you need help understanding the meaning of the ratios or how to they are computed, go to: http://www.investopedia.com/university/ratios/
· Liquidity measurement ratio: Current ratio
· Profitability indicator ratios: Return on assets · Return on equity
· Debt ratio: Debt ratio
· Operating performance ratio: Fixed asset turnover ratio
· Cash flow indicator ratio: Dividend payout ratio
· Investment valuation ratio: Price / Earnings ratio
Using the ratios you computed, discuss what these ratios tell us about each company’s performance, and how the companies compare to the industry average. Feel free to use graphs/charts as comparisons for any or all ratios and then discuss the ratios of most relevance to these companies and their competitive performance.
3. As an investor, discuss which company you would choose to invest in and provide a rationale for your decision. Support your conclusions, why or why not?
4. After concluding your research about each company and reviewing their annual report, discuss what non-financial criteria you would consider when choosing between these two investment options? Support your conclusions, why or why not?
In short, your paper should contain: a title page (names, course number, title of paper and date), an introduction to the companies, a listing of all of the calculated ratios and discussion about their significance, investment information and analysis for both companies, a summary, and references.