Where would you invest $1 million? This activity is designed to help you use the financial statement analysis principles in Chapter 12 to evaluate both the profitability and risk of several companies to help you develop the skills to determine where you would invest a hypothetical $1 million.
For this activity you will select four Publicly Traded Companies (select 4 of the companies whose financials are included in this weeks module in Canvas) to analyze side by side and tell me which one of the four companies you’d invest your $1 million and why. You are required to calculate and analyze the following items for all four companies to compare to make your decision:
Liquidity ratios: Current ratio, Quick ratio, # days in inventory, and # of days in A/R (average collection period)
Solvency Ratios: Debt to Equity ratio
Profitability Ratios & Vertical Analysis: Gross Profit %, Profit Margin %, Return on Assets, Return on Equity
Horizontal Analysis: % change and $ change in Total Sales; % change and $ change in Net Income
Cash Flows: $ amount of increase or decrease in cash flows from operating activities