For this project your team will prepare financial ratios in MS Excel using the accounting statements provided. Teams must provide the calculations for the following ratios for each company using the 2018 annual data. Calculations must be performed and submitted in an MS Excel spreadsheet.
1. Profitability Ratios
o Gross Margin
o Operating Margin
o Net Profit Margin
2. Liquidity Ratios
o Current Ratio
o Cash Ratio
3. Leverage Ratios
o Debt to Equity
4. Operating Returns
o ROE
o ROA
1. Your team will prepare an Excel document which provides the calculations for the ratios required for the project. The Excel document should clearly identify each company and their specific ratio calculations.
2. Your team will submit a written analysis of your findings. This final analysis should be written as a professional stock analysis of these two competitors and utilize supporting evidence in your analysis (citations and references). The final written analysis must follow APA formatting (including charts and references). Times New Roman 12
The analysis should include:
· Analysis of the two businesses and a discussion of the payments industry, including but not limited to, strengths of these businesses, opportunities moving forward, potential threats to their business models.
· Critical analysis of each of the main ratio calculations related to each company. This critical analysis should include the calculations, results, an explanation of the importance of the ratio, and an analysis of which company has an advantage based upon the calculations. This analysis should include graphs and figures to supplement your written analysis.
· Clear conclusion which summarizes the advantages and disadvantages for each company, with an ultimate answer related to which company you would choose to invest using clear and convincing reasoning.
Critically analyze how the Dupont identity is used as an evaluative tool for ROE and explain what this means for the year you have selected.
Provide a calculation for the current stock price for Visa.
