Financial Statement Analysis Project -- A Comparative Analysis of Oracle Corporation and Microsoft Corporation

 

 

 

Here is the link for the financial statements for Oracle Corporation for the fiscal year ending 2011. First, select 2011using the drop-down arrow labeled for Year on the right-hand side of the page, and then select Annual Reports using the drop-down arrow labeled Filing Type on the left-hand side of the page.

 

 

 

You should select the 10k dated 6/28/2011and choose to download in PDF, Word, or Excel format.

 

 

 

http://www.oracle.com/us/corporate/investor-relations/sec/index.html

 

 

 

Here is the link for the financial statements for Microsoft Corporation for the fiscal year ending 2011. You should select the 10k dated 7/28/2011 and choose to download in Word or Excel format.

 

 

 

http://www.microsoft.com/investor/SEC/default.aspx?year=2011&filing=annual

 

 

 

 

 

 

 

 

 

Description

 

 

 

 

 

 

Using the financial statements for Oracle Corporation and Microsoft Corporation, respectively, you will calculate and compare the financial ratios listed further down this documentfor the fiscal year ending 2011 and prepare your comments about the liquidity, solvency and profitability of the two companies based on your ratio calculations.

 

 

 

 

 

Overall Requirements

 

 

 

 

 

 

  For the Final Submission:

 

 

 

Your final Excel workbook submission should contain the following. You cannot use any other software but  Excel to complete this Project.

 

1)      A completed worksheet profiles tab which contains a one paragraph description regarding each company with information about their history, what products they sell, where they are located, etc.

 

2)      All 18 ratios for each company with the supporting calculations and commentary on your worksheet ratio tab. Supporting calculations must be shown either as a formula or as text typed into a different cell.The ratios are listed further down this document. Your comments for each ratio should include more than just a definition of the ratio. You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios.

 

3)      The Summary and Conclusions worksheet tab which is an overall comparison of how each company compares in terms of the major category of ratios (Liquidity, Profitability, and Solvency). A nice way to conclude is to state which company you think is the better investment and why.

 

4)     The Bibliography worksheet tab must contain at least your textbook as a reference.  Any otherinformation you use to profile the companies should also be cited as a reference (I will add text book reference).

 

 

 

 

 

 

 

Required Ratios for Final Project Submission

 

1)     Earnings per Share

 

2)    Current Ratio

 

3)    Gross Profit Rate

 

4)    Profit Margin Ratio

 

5)    Inventory Turnover Ratio

 

6)    Days in Inventory

 

7)     Receivables Turnover Ratio

 

8)     Average Collection Period

 

9)    Asset Turnover Ratio

 

10) Return on Assets Ratio 

 

11) Debt to Total Assets Ratio

 

12) Times Interest Earned Ratio

 

13) Payout ratio

 

14) Return on Common Stockholders’ Equity Ratio

 

15) Free Cash Flow

 

16) Current Cash Debt Coverage Ratio

 

17) Cash Debt Coverage Ratio

 

18) Price/Earnings Ratio [For the purpose of this ratio, for  Oracle, use the market price per share onMay 30, 2011and for Microsoft, use the market price per share on June 30, 2011]

 

 

 

Other Helpful information:

 

 

 

If you feel uncomfortable with Excel, you can find many helpful references on Excel by performing a Google search.

 

 

 

The Appendix to Chapter 13 contains ratio calculations and comparison comments related to Kellogg and General Mills so you will likely find this information helpful.

 

 

 

 

 

BigCharts.com provides historical stock quotes.

 

 

 

 

Either APA or MLA style can be used to complete the references on your Bibliography tab. There is a tutorial for APA and MLA style within the syllabus.

Answers

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