Project #70229 - Review and Analysis of Financial Statements

 

Compare the 2013 financial statements for CSX and Norfolk Southern (financial statements and annual reports are attached).  Prepare a report which shows the ratios listed below.  Ratios should be provided in the following format with one sentence about the comparison of the two companies’ ratios and several sentences to provide insight into the factors contributing to the difference in the ratios (from the 2013 annual reports). For Component percentage analysis of the income statement, include valid discussion including the comparison of the net profit margin of the two companies, and identifying the major factors contributing to the difference.

 

 

 

Table to report ratios:

 

 

2013

CSX

 

Norfolk Southern

 

 

 

 

Section 1 – Tests of Profitability

 

1. Return on equity

 

2. Return on assets

 

3. Financial leverage percentage

 

4. Component percentage analysis of the income statements

 

 

 

Section 2 – Tests of Liquidity

 

1. Current ratio

 

2. Receivable turnover ratio

 

3. Inventory turnover ratio

 

 

 

Section 3 – Tests of Solvency

 

1. Times interest earned ratio

 

2. Debt to equity ratio

 

 

 

Section 4 – Market Tests

 

1. Price/earnings (P/E) ratio

 

 

 

Section 5 – Recommendation

 

Provide your recommendation on which company’s stock should be purchased as an investment. Summarize the results of ratios from each of the previous sections to support your decision.

 

 

 

Appendix

 

Please provide your ratio calculation processes in Appendix. In the text, report the final results/numbers only.

 

Subject Business
Due By (Pacific Time) 05/09/2015 12:00 pm
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