Project #29358 - Business Finance Lowes VS Home depot

The second project submission will be the detailed Financial Analysis of your two companies. This submission is worth 100 points and will be due at the end of Week 5.

 

Format:

 

     For clarity in your format, you should actually bold each requirement/question and respond to it. Please number your responses to match the order of the requirements/questions in the Project Instructions in Content.

 

 

 

     Please place the three years of financial data and your ratios in a Table or Chart for easy reference. 

 

Please do not submit the complete financial statements of your companies - just the relevant data that you have selected as critical for your analysis.

 

 

 

 

 

Begin with the Balance Sheet: Respond to each question in the order listed

 

 

 

  1. Start with the Capital Accounts.  How do they differ?  How are they the same? Are they realistically presented?  What are the Book Values, and what are the present Ratios of the stock Prices to Book Value.
  2. Now look at the Fixed Assets (the Property Account). When you read Chapter Five of the little Graham book you will realize that assets are not always what they appear to be.  Do either of your companies show as Assets items that need explanation?  What are they?  How are they explained?  You might have to go into the footnotes to the Financial Statement to find the answers.
  3. Are the Non Current Assets material and how are they explained?  Are there material Intangible Assets? (Chapter 8 in Graham)  What would be material for companies as large as the ones you are working with?
  4. Do your companies have Deferred Tax Accounts?  How are they treating taxes?
  5. Now let’s look at the Current Assets.  Are the companies maintaining adequate liquidity?  Mr. Moovon is going to want to see the relevant ratios, so you had better calculate them and have them ready. (You will find most of them in Chapter 3 of the text.)
  6. Liabilities. As Mr. Moovon always says, “You can’t be sure about the Assets but the Liabilities are always real.”  Does either company have too much debt?  If so, CB&M won’t touch them.  Can either company carry significantly more debt? How much more? CB&M always loads the companies it acquires with as much debt as they can carry.  That’s how they finance the deal. 
  7. Are there any hidden assets? This calls for very careful analysis.  

 

 

 

Now move on to the Income Statement: Respond to each question in the order listed

 

 

 

  1. Are the companies as profitable as they should be?  What ratios would tell us that?  OK!  Now calculate them.  Let’s see those Efficiency Ratios.
  2. Now that you have calculated the ratios, what can CB&M do to make them more profitable?  What do you suggest?
  3. As a double check provide a DuPont Analysis on both companies.

 

 

 

Not all of the ratios on page 58 of your textbook will apply to all of the companies. You should list the “Industry Averages” of your particular business sector to serve as a benchmark for your companies’ performance.

 

Make sure you calculate all of the appropriate ratios called for in the Project and be sure to provide at least three years of ratiosUse the research tools previously listed and your own initiative in this research effort.

 

Tell me what each ratio indicates regarding the company - not a definition of the ratio. That will help you focus on the recommendation you are going to make in two weeks.

 

Do not just provide a cut and paste of financials as your answer. You will need to show that you truly understand the various ratios and financials you submit. You need to examine in detail and contrast the financial information. It is best to take at least 10 ratios or more and compare the two firms as well as compare the two firms to the industry averages. 

 

Be sure that you clearly address each of these specific questions/requirements.

 

Please seperate all questions and leave in bold

This assignment was due 5 days ago and one of the scholars failed to do it, now my money is tied up in the account and I cannot get it back. But I need this back asap because it is past due. If it is not submitted by tomorrow at 8pm I will get a zero for my grade.

Subject Business
Due By (Pacific Time) 04/30/2014 04:00 pm
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