Principles Of Finance
1. Access library.franklin.edu or https://www.franklin.edu/library · Select Databases. · Click Database by Name, and then search for Mergent Online. · At Mergent search for companies information in the main “Company Search” search box by name or stock ticker symbol for public companies. · Click on each companys name to open its main page. 2. At the very top of the each companys main page (formally termed Company Details) in the far right column find and note the following: · EPS (Earnings per share) Basic · EPS Diluted · PE (Price/Earnings) Ratio 3. Next select the Company Financials tab, followed by the sub-heading tab Ratios for reports on ratios for the last several fiscal years. Be sure you are looking at Annuals and note the most recent fiscal years numbers are on the left. Net Income / Total Assets (percentage) or Return on Assets (ROA) Net Income / Common Equity (percentage) or Return on Equity (ROE) Current Ratio (X) Total Debt / Equity (percentage) Total asset turnover (percentage) 4. Write a 1-2 page paper responding to the following questions based on your research: a. Compare the 8 financial ratios listed above for the four companies. It is recommended that you use a spreadsheet to demonstrate your comparison. Insert the table into your Word document and respond to the following questions: § How would you rank the four firms in terms of financial performance? § Why might their financial performances differ? § What economic or market factors might account for big differences in the P/E ratios? b. Select ONE of the companies and examine the trend in the ratios for the past three years. Respond to the following question: § Is the firm’s performance improving, declining, stable, or is something strange going on? (Please note that you should use these ratios and their trends to assist you in responding to the action items below.) 5. Continue your research on the company you selected in the previous action item. · At the Mergent site click on the Competitors tab at the main page for your company. · At the Competitors site click on Market Cap (market capitalization) to sort the competitors by the current dollar value of shares outstanding. · Click on each companys name and seek to choose up to five (?5) that ideally share the same sector and SIC and NAICS industry codes as your chosen firm. And/or · Alternatively, you can source competitors via Mergents Reports tab and then Equity Reports at a companys main page. (These reports will be examined in more detail in the next Financial Exercise.) · Examine the financial data on each competitor and the industry as a whole. 6. Write a 1-2 page analysis of the performance of the company you selected above. Your analysis is to include the information you gained from your research (above) and your responses to the following question: · Who are the firm’s competitors? Does the selection of competitors make sense to you? · How is your selected company performing against its competition? (Don’t just say better or worse on particular ratios – try to think of and offer reasons why).  EPS Diluted is an adjustment of the textbooks EPS Basic, defined there as Net Income available to common stockholders/Total shares of common stock outstanding. EPS Diluted expands the denominator in the calculation to include common shares that could be issued and outstanding as a result of contractual commitments in convertible securities, such as convertible bonds and preferred stock, and employee stock options.  There are many sources for public firm financial information. Here are the URLs for some of the most commonly used sites: https://finance.yahoo.com/ https://www.msn.com/en-us/money https://www.cnbc.com/stocks/ https://www.barchart.com/stocks http://www.barrons.com/data https://www.marketwatch.com/investing/stock/link/profile?countrycode=id – I can give login for library link.