Financial statement analysis for two firms using ratio analysis

This is a paper that is focusing on the financial statement analysis for two firms using ratio analysis. The paper also provides additional questions to focus on while writing the assignment paper.

Financial statement analysis for two firms using ratio analysis

Assignment Overview: Financial Statement Analysis
You have been assigned to the CEO of a major investment company.  The CEO keeps an eye on potential investment opportunities in several industries.  She asks you to do a financial analysis for two firms in an industry the company is considering for investment expansion.

Firstly, you are to research current year data for two selected firms, and use ratio analysis to compare these two major competitors in the same industry. Compare each of them to the most current data for industry ratios.  Also, you are to determine whether one or both is a promising investment opportunity.
Secondly, you will create an Excel file with your financial comparison data.  See the attached sample that compares Southwest Airlines Company with Jet Blue Airline Company.
Based on the data developed in your Excel file, you will write a report to the CEO that details your analysis. Also, makes investment recommendations based on what your analysis concludes about the financial health of the firms.

Financial statement analysis for two firms using ratio analysis

Thirdly, you may obtain financial information and the companies’ latest annual reports on the web directly from the Securities and Exchange Commission for the company website.  MSN Money or Yahoo Finance also have information but in some situations it may be incomplete.  Current stock price information is not available from the SEC web site.
Industry financial ratios for your select industry are on Morningstar.com, Yahoo Finance and MSN Money and http://www.bizstats.com/corporations.asp?profType=ratios .

The 2016 R DMBA Week 3 sample answer file contains a comprehensive analysis of  the financial statements of two large airline companies. It illustrates and explains how different companies succeed by focusing on different key ratios like Net Income/Sales, or Sales/Total Assets (asset turnover) or Total Assets/Common Equity (leverage).  Also, it further explains how these different strategies are revealed through DuPont Analysis. (a powerful technique that many companies use to devise, implement, and monitor their business strategies. It shows the source for every number on every Excel worksheet. Just click on any number in any Excel worksheet and you will see where it comes from. Showing the source for every number on every Excel worksheet is very important and helpful to readers. Also, you should do this on all of your Excel spreadsheets.

Lastly, all of the data in the example comes from SEC interactive data.  Under the company name in interactive data is a small red link that says view excel document.  All numbers in this document are easy to use in calculations.  Data copied from some other sources may not calculate correctly in Excel.