Module 02 introduced the four main financial statements, financial ratios, and analysis. For this activity, consider a public for-profit corporation that is listed on the Standard and Poor’s (S&P) 500 stock index. The S&P 500 index contains the largest publicly listed companies in the United States and is typically considered a measure of the overall market. This will likely ensure that the company you consider has reported numerous financial statements. You may need to do an Internet search of the companies within the S&P 500. Sources like Yahoo! Finance are listed below as tools to find the ticker symbol and relevant information. There are three components to this activity: (10 points on the basis of completeness and quality of work submitted)
- Introduce the company and determine its industry. Have you used or heard of its products or services? Is there a lot of competition in this industry? Is the industry growing or declining? What are your thoughts on the short-term and long-term growth for this company and industry? (30 points)
- For the company you selected, calculate one ratio from each of the following sections in Module 02:
• Liquidity coverage ratios
• Activity and efficiency ratios
• Solvency and leverage component ratios
• Solvency coverage ratios
• Profit margins
• Stockholder ratios
Provide the numerator and denominator for these ratios. (30 points)
- Given the financial ratios you calculated and the company outlook, consider a recommendation for the stock. List all of the sources you use to get your data. For this assignment, use the following choices:
• Buy (typically positive opinions on outlook and ratios from the company)
• Sell (typically negative opinions on outlook and/or ratios)
• Neutral (mixed results across ratios and outlook)
Consider industry and competitor ratios for this analysis. This comparison should help with your recommendation analysis.(30 points)
This activity should be 1−2 pages addressing the three components. Feel free to utilize any of the sources listed below:
• Yahoo! Finance: http://finance.yahoo.com/
• CNBC: http://www.cnbc.com/
• The Wall Street Journal: https://www.wsj.com/
• CNNMoney: http://money.cnn.com/
• MarketWatch: http://www.marketwatch.com