ANNUAL REPORT RATIO ANALYSIS ASSIGNMENT Due: Wednesday, October !, "### 1.

Please choose a publicly traded company that you are interested in learning more about. Find that companys most recent Annual Report on the Internet, at the library, etc.,. You can find most annual reports at the website of your company. IF Y !R " #PA$Y % &' $ ( PR&'&$( " #PARA(I)& FI$A$"IA* '(A(&#&$(', +i.e. two or more years shown in columns,, P*&A'& "- '& A$ (-&R " #PA$Y (-A( % &'. /. "alculate the ratios listed at the end of this document from the financial statements of your company for both the most recent year and the year before. (o do this, you will need to ma0e a spreadsheet, +on &1cel or other,, that essentially copies certain lines of your 2arious financial statements onto the spreadsheet. (hen, ma0e spreadsheet formulas to calculate each financial ratio that is re3uired. 4. nce you ha2e made these calculations, read the #%5A located in the annual report, as well as the footnotes to the 2arious financial statements. (hese are the pieces of information that management wants you to 0now, +or is re3uired to tell you.,, in addition to 6the numbers.7 8. 9rite a /:4 page summary, +double spaced,, of the most interesting and rele2ant changes from one year to the ne1t from the calculations you made in step two. After reading the #%5A and footnotes, you should ha2e a good idea of why certain ratios and figures changed from one year to the ne1t. If certain changes are not e1plained, try to thin0 of reasons why the figures might ha2e changed. For e1ample, did one part of an e3uation change in greater proportion than another part; +i.e. did a numerator grow much faster than a denominator;, 9hy might that ha2e occurred; (he goal with this pro<ect is to not only gi2e you a chance to calculate the ratios that accountants and analysts fre3uently use when e2aluating a company, but to also ma0e you look for reasons, +i.e. 6dri2ers7,, for those changes and to thin0 of your own reasons if none are gi2en. If you only do the calculations but do not discuss why certain changes too0 place, then you ha2ent achie2ed the goal of the assignment. (herefore, do your best to go past the numbers. In the end, you will hand in= +1, your page with cogs, assets, sales etc.,. that you copied from your financial statements, +/, a sheet of your calculations, labeled so that I 0now which calculation is which, +4, a print out of your formulas, and +8, your /:4 page report on those calculations. +You can print out your &1cel formulas by choosing 6(ools7 then 6 ptions7 then the 6)iew7 tab, then under 69indows options7 chec0 the 6formulas7 bo1. (his might mess up the layout of your page, so dont try to ma0e it loo0 pretty. >ust print out the formulas, then unchec0 the bo1 to ma0e your spreadsheet go bac0 to normal,.

Re3uired ratio calculations, +in their simplest form,, are listed below= A. Profitability Ratios= 1. Return on Assets +net income?total assets, /. Asset Turno$er +sales?total assets, 4. Return on Sa%es, &a'a (ro)*t +ar,*n (ercent- +net income?sales, 8. Assets.to.E/u*ty +total assets?stoc0holders e3uity, @. Return on E/u*ty +net income?stoc0holders e3uity,

A. &fficiency Ratios= 1. A0R Turno$er Rate +sales?accounts recei2able, /. In$entory Turno$er Rate +" B'?a2erage in2entory, 4. 1*2ed Asset Turno$er +sales?a2erage fi1ed assets, ". *e2erage Ratios= 1. Debt Rat*o +total liabilities?total assets, /. Debt.to.E/u*ty Rat*o +total liabilities?stoc0holders e3uity, 4. T*+es Interest Earned +earnings before interest and ta1es?interest e1pense, %. *i3uidity Ratios= 1. 3urrent Rat*o +current assets?current liabilities, /. Wor'*n, 3a(*ta% +current assets C current liabilities, (hese ratios are e1plained in your te1tboo0, so if you dont understand why a particular calculation is important or rele2ant, you can loo0 up more information there.