The Financial Health of P&G is Higher than That of Unilever Excel Task

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Business Finance

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Morningstar website http://www.morningstar.com/analyst-research/stock-...SEC resource https://www.sec.gov/edgar/searchedgar/companysearc...Hoonuit site https://www.atomiclearning.com/login/snhu

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RATIO ANALYSIS Note: Please change the column names based on your industry and your selected companies. RATIOS Profitability Ratios (%) Gross Margin EBITD Margin Operating Margin Pretax Margin Effective Tax Rate Financial Strength Quick Ratio Current Ratio LT Debt to Equity Total Debt to Equity Interest Coverage Valuation Ratios P/E Ratio Price to Sales (P/S) Price to Book (P/B) Price to Tangible Book Price to Cash Flow Price to Free Cash Flow Management Effectiveness (%) Return On Assets Return On Investment Return On Equity Dividends Dividend Yield Payout Ratio Efficiency Revenue/Employee Net Income/Employee Receivable Turnover Inventory Turnover Asset Turnover Summary What is ratio analysis? Briefly explain in this space, and reference your resources: Referring to your ratio analysis above, in which company would you be willing to invest, and why? ed companies. es: to invest, and why? ANALYSIS Overview: For this task, you will analyze the financial health of two competitors in the same industry based on their ratios, using the provided Excel spreadsheet template. Then, you will complete your analysis by writing a short synopsis of your findings in the space below the analysis. Prompt: Follow the steps below to analyze the financial health of two competitors. Use the Module Two Activity Template to complete this task. Select two companies operating in the same industry (for example, Macy's and Dillards). The companies have to be in the same business for the ratios to be valuable to your analysis. Then, complete the template, providing the following: Ratio Research: Use the template to analyze the selected ratios (profitability, financial strength, valuation, management effectiveness, dividends, and efficiency) for both of the competitors. To complete this part, you can reference the Morningstar website in the Module Two resources to obtain the ratios. You can also use the SEC EDGAR Company Filings resource from Module One to obtain the ratio from annual reports. Please note: The ratios have to be from the same time period (the same year for both competitors). For training on how to use Excel, visit the Hoonuit training site or search YouTube to find appropriate Excel training videos. Industry Ratios: To analyze ratios for the companies, you also need to obtain the ratios for the industry that the competitors operate in. Industry values for the ratios can be found in the index column. If no index value is available, put the five-year averages for both companies in the industry column and use these figures for the industry comparison of your ratio analysis. Ratio Analysis: Compare the two companies based on their ratios. Use the last column in the template to write in detail how each company is doing based on the ratios. Compare the company ratios to the industry and each other. Summary: This short write-up should be done directly in your Excel spreadsheet. What is a ratio analysis? Briefly explain in about one paragraph. Please quote your resource. o Referring to the ratio analysis, in which con would you be willing to invest and why? o Note: This is a theoretical exercise. You should not be investing according to this analysis.
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Explanation & Answer

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RATIO ANALYSIS
Note: Please change the column names based on your industry and your selected companies.
RATIOS

Personal and Household Products

Proctor and Gamble

Profitability Ratios (%)

Gross Margin
EBITD Margin

55%
20.10%

48.48%
24.24

Operating Margin
Pretax Margin
Effective Tax Rate

16.50%
15.05%
22%

20.52%
19.94%
19%

0.36
1.19
0.64
0.19
19.53

0.59
0.83
0.28
0.41
27.33

22.51
3.2
6.58
6.46
16.36
17.64

24.0
3.6
4.5
4.2
16.4
18.59

7.61%
16.6
22.66%

7.95%
11.49%
17.98%

2.26
18%

3.57
73.30%

$410,029
$44,938
8.4
5.9
0.73

$726,434
$105,978
14.4
7.32
0.56

Financial Strength

Quick Ratio
Current Ratio
LT Debt to Equity
Total Debt to Equity
Interest Coverage
Valuation Ratios

P/E Ratio
Price to Sales (P/S)
Price to Book (P/B)
Price to Tangible Book
Price to Cash Flow
Price to Free Cash Flow
Management Effectiveness (%)

Return On Assets
Return On Investment
Return On Equity
Dividends

Dividend Yield
Payout Ratio
Efficiency

Revenue/Employee
Net Income/Employee
Receivable Turnover
Inventory Turnover
Asset Turnover
Summary

What is ratio analysis? Briefly explain in this space, and reference your resources:
Ratio analysis is the process of examining and comparing the financial information presented in the financial statement of a c
By performing a ratio analysis, the bulky financial information presented in the financial statements can be presented in an ea
operations can be determined. A trend analysis to show how financial performance changed from one period to another can
compared to its rivals and also relatively to the overall industry in which it operates in.

The reasons for performing ratio analyis in an organization may include the following:
1. Comparing performance of different organizations: Given the fact that organizations are different in sizes, it would be misle
is doing compared to other firms in the industry and also enables performance comparison in different yea...


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