Choose one of the following companies and collect the data for Balance Sheet, In
ID: 2730717 • Letter: C
Question
Choose one of the following companies and collect the data for Balance Sheet, Income Statement, and Statement of Cash Flows from the SEC company filings. Then, do the financial ratio analyses using the ratio formula presented in the modules 3 and 4 (ROE, RNOA, NOPM, NOAT, AT, ROA, Times Interest Earned, Cash Flow from Operations to Tatal Debt, Free Cash Flow to Total Debt, Current Ratio, Quick Ratio, Liabilities to Equity Ratio, Total Debt to Equity Ratio, Z-Score). The presentation should include the comparison with competing companies in the same industry and trend analyses over time for the years of 2009~2014. The data source can be found at http://www.sec.gov/edgar/searchedgar/webusers.htm
Choice of Firms (Tickers in the parentheses): Pfizer (PFE), Merck (MRK), Horizon Pharmaceutical (HZNP), Abbot Laboratories (ABT), Monsanto (MON), The Scotts Miracle-Gro Company (SMG)
Explanation / Answer
Ratio Formula Calculation Value ROE Net Income/Shareholder's Equity $6,392/$1,788 3.574944 RNOA Net Operating Profit After Taxes/ Average Net Operating Assets $ 6,272/[($105,128 -$13,531)+($105,781-$10,900) / 2] 0.04511 NOPM Net Operating Profit After Taxes/ Sales $6,272/$48,047 0.130539 NOAT Revenues/Average Net Operating Assets $48,047/[($105,128 -$13,531)+($105,781-$10,900) / 2] 0.345569 AT Sales/Average Total Assets $48,047/[($105,128+$105,781)/ 2] 0.455618 ROA Net Income/ Average Assets $6,392/[($105,128+$105,781/ 2] 0.060614 Time Interest Earned Earnings before interest and taxes/interest expense Cash Flow from Operations to Total Debt [Net income + Noncash Expenses + Changes in Working Capital] / Total Debt ($6,392 + $7,427 - $1,664) / $48,185 0.252257 Free Cash Flow to Debt (Operating Cash Flow - Capital Expenditure)/Total Debt ($6,392 + $7,427 - $1,664 + $1,723)/$48,185 0.288015 Current Ratio Current Assets/current liabilities $33,181/$16,245 2.042536 Quick Ratio (Current Assets - Inventory)/Current Liabilities ($33,181-$6,254)/$16,245 1.657556 Liabilites to Equity Liabilities / equity $48,185/$56,943 0.846197 Total Debt to Equity Total Debt / Equity $48,185/$56,943 0.846197