Calculate and interpret liquidity ratios

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Assets and Working Capital - Examine each of the major assets and working capital accounts. How does each firm account for these items and does the accounting method differ from the firm's competitors. Examine each firm's receivables. Is there any evidence of aggressive revenue recognition or earnings management through manipulation of the allowance for doubtful accounts? Examine the firms' inventory methods and policies and compare to their competition. If a firm uses a different inventory accounting method (e.g., FIFO versus LIFO) than its competitors, calculate the impact on net earnings. Is there any evidence of excess or obsolete inventory? Examine the firms' accounts payable. Is each firm paying within a reasonable time? How do they compare? Calculate asset management / efficiency ratios for the past five years for each company and its selected competitors including A/R turnover in days, Inventory turnover in days, A/P turnover in days, and the cash collection cycle in days. Calculate and interpret liquidity ratios including the current ratio, quick ratio and cash ratio. Examine the firms' fixed assets and related accounting policies including depreciation period and method. Examine the firms' intangible assets. Look at the footnotes for evidence of impairments.

Reference no: EM131298951

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