1. Read -Understanding the Income Statement at: http://www.investopedia.com/articles/04/022504.asp
2. Read -Reading the Balance Sheet at: http://www.investopedia.com/articles/04/031004.asp
3. Compute- the following financial ratios for both companies and provide as an appendix to the required paper. If you need help understanding the meaning of the ratios or how to they are computed, go to: http://www.investopedia.com/university/ratios/
Liquidity measurement ratio: · Current ratio
Profitability indicator ratios:· Return on assets · Return on equity
Debt ratio: · Debt ratio
Operating performance ratio: · Fixed asset turnover ratio
Cash flow indicator ratio: · Dividend payout ratio
Investment valuation ratio: · Price / Earnings ratio
For each company and comparing the two, you are to write a two page report that answers the following:
3. Using the profitability ratios, discuss what conclusions you can make about each company’s profits over the past three years. Support your conclusions. Which company is doing better, why or why not?
NOTE: You will be graded on the quality of your answers, the logic/organization of the report, your language skills, and your writing skills.
Paper Grading Rubric
(Below 70) Fair (70-79) Good (80-89) Excellent (90-100)
30% No understanding of the problem. Little understanding of problem. Considerable understanding of the problem. All requirements of assignment are included. Complete understanding of the problems. All requirements are included in response.
Organization and Structure
15% Information unorganized and not effectively structured. Poor grammar. Little or no evidence of preparation. Information is somewhat organized. Minimal or superficial preparation. Information is well organized. Adequate and reflective approach in preparation. Information is logically and creatively organized. Highly developed approach in preparation.
20% Did not participated in the developing the research paper and selected topics Somewhat participated in the developing the research paper and selected topics Was an active participant in developing the paper, doing the deep research and working with peer members to drive completion of a well researched paper. Led and drove the discussion, the coordination, the research for the paper and helped motivate other members of the group meet their deadlines.
35% Information is missing or inaccurate. No insight is provided by the student.
Content is not comprehensive. Opinions are not well supported. Content is accurate and opinions are stated and somewhat supported. Content is accurate and shows acute insight.
More on the GRADING CRITERIA
In addition to the grading rubric note above, the following is important information about this assignment:
1. WRITING QUALITY: Grammar, Verb Tenses, Pronoun Use, Spelling, Punctuation, and Writing Competency.
I have a few hang-ups about the following errors and you will be marked down for them: there is not their, your is not you're, its (possessive) is not it's (it is), too is not to or two, cite is not site or sight, and who should be used after an individual, not that. For example, "the person WHO made the speech" not "the person THAT made the speech."
Also, in a professional paper, one does not use contractions (doesn't, don't, etc.) and one does not use the personal you or your. Therefore, use the impersonal as I have done in the sentence immediately above. It is more business-professional than saying, "Also in a professional paper you don't use contractions."
Part of the requirements for this research assignment is that you include a list of references used for your research. A minimum of three (3) sources must be included in this list of which a minimum of two (2) of these sources must come from the UMUC Online Library databases, other University research libraries and/or material included in this course. (EXCLUDING Wikipedia as references. The sources in your reference list must be written using APA formatting.
3. Use 1" margins top, bottom, left and right sides.
Use Times New Roman, font size 12.
Use double spacing.
Important Note: For ease of reading, your document must contain appropriate headings and subheadings. Headings and sub-headings are a requirement of this research assignment. Headings and subheadings should be placed at the left margin. The use of headings and subheadings are a terrific way to help you organize your research paper.