Review the financial statements for the companies

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Review the financial statements for the companies and answer the following questions for the last reporting year.

What components of stockholders' equity do each of the companies disclose?

Do the companies have preferred stock shares outstanding? If so, what special features do these shares contain? Do either of the companies report treasury shares? If so, do the companies disclose the reason for reacquiring the shares? Income Statement

What are the basic and diluted earnings per share for each company? Have the companies reported any discontinued operations?

Do the companies disclose any stock compensation plans? If so, are they reporting such plans under the fair value or intrinsic value methods? What was the value of compensation expense measured for any outstanding stock option plans? Financial Ratios Compute the following ratios. Also, interpret and assess each group of ratios for the company.

What type of story are the ratios telling the analyst?

Profitability ratios: Gross profit margin ?Net profit margin ?Return on stockholders' equity

Liquidity ratios:

Current ratio

Quick ratio

Inventory turnover

Leverage ratios:

Debt-to-assets

Debt-to-equity

Times-covered ratio

What type of information do you find in footnotes to the financial statements? Do you find the balance sheet, income statement or other measures such as ratios the most informative? Comment on the advantages and disadvantages of using ratios for analysis.

Reference no: EM13537382

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