Financial statements comparison

Log on finance.yahoo.com to download financial statements of two companies in the same
industry in 2019 and 2020. You should be able to analyze the financial situations of a single
firm over time (time series analysis) and multiple firms at a point of time (cross sectional
analysis). Your report should include:
1) Companies’ information, such as the incorporated date, the headquarter, the number of
employees, the main business, the rankings in the industry
2) Cross-sectional analysis
a. Calculate two companies’ short-term liquidity (current ratio, quick ratio, cash
ratio), activity (inventory turnover, day’s sales in inventory, receivable turnover,
day’s sales in receivables, NWC turnover, total asset turnover), long-term debt
(total debt, equity multiplier, long-term debt), and profitability measures (profit
margin, return on assets, return on equity) in 2020.
b. Compare the ratios of the two companies and interpret them
3) Time series analysis
a. Calculate each of the two companies’ short-term liquidity (current ratio, quick
ratio, cash ratio), activity (inventory turnover, day’s sales in inventory, receivable
turnover, day’s sales in receivables, NWC turnover, total asset turnover), longterm debt (total debt, equity multiplier, long-term debt), and profitability
measures (profit margin, return on assets, return on equity) from 2019 to 2020
respectively.
b. Compare the ratios of each company from 2019 to 2020 and interpret them.
4) Summarize your results and generate your conclusion on the two companies’ short-term
liquidity, activity, long-term debt, and profitability measures in one-year period from
2019 to 2020.
5) Demonstrate Du Pont Identity of two companies in 2020.
Each group is required to submit a report with the length of no fewer than 3 pages, no more than
6 pages, and doubled space.

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