Problem 1: Let's search out some financial information for the class. Look at three companies in three industries: Best Buy (retail), Pfizer (drug), Ameren (Utility). Find the sales, cost of goods sold and research and developement expense for each business. Calculate return on equity, return on assets, inventory turnover, accounts receivable turnover, and long term debt to equity ratios.

Compare and contrast these ratios. Why are there differences or similarities?

Information for company: http://www.sec.gov/

Problem 2: Why is an accrual accounting income statement more useful for analyzing business performance than a cash flow based income statement? What are the drawbacks of accrual accounting?