Study the financial statements and other information for two public companies in the same sector (e.g. General Motors and Ford), listed on an American stock exchange (Nasdaq, NYSE, American Stock Exchange) and compare them. The analysis will cover different aspects of the two companies, and will be comparable. The companies you select must have a non-negative net worth (i.e. assets in excess of liabilities) and must have been profitable, at least for most years. You are invited to answer all the questions below and provide comments. Most information is available on websites (marketwatch.com, finance.yahoo.com, investing.com etc) and in the companies’ annual reports. All the information is accessible online and free of charge. You can select the companies you are interested in from a large list of shares at the link below.https://stockmarketmba.com/stocksintherussell1000.php?pa?t?ste to the following questions:1. Analysis of shares and index on the stock exchange. Show the market prices and percentage % annual changes in the shares of the two companies in a table or graph (separately for each company and the S&P500 index) for the last five years.
Compare between the two companies and the index in terms of significant changes and try to explain significant changes in the prices of the two shares and the general index. For this purpose, use news, reports and announcements that have been published, concerning each company and the market in general.
2. Calculate and tabulate the average annual return for the share prices of the two companies and the general index over the five-year period, and make comparisons and comments. For this purpose, use the FV=PV(1+r)N formula, where you calculate the return (r) for each variable.
3. Analyse the return on equity (net income/capital) for each company and compare them in a table for the last five years, with comments. Explain why the return is high orlow. What factors affect the equity ratio? Explain!
4. Analyse the sources of financing of the two companies over the last five years. Describe the sources of financing of the two companies for the last five years, how they were five years ago and how they are today (loans, bonds, shares, profits, etc.) Compare and comment. The data can be found in the balance sheet of each company
5. Calculate the debt ratio (total liabilities/total assets) of each company for the last five years in a table and make comparisons and comments. Explain whether the debt ratio is increasing or decreasing over the five years and whether each company is able to service its debt or is experiencing problems.
Calculate the Price/Earnings ratio (Price per Share/Earnings per Share) for the two companies for the last five years in a table. Why it is high or low. Could a company have a high Price to Earnings ratio without a particularly good outlook for the future?
7. Analysis of sales (Sales) and earnings before interest, tax, depreciation and amortisation (EBITDA) for the last five years, in a table or graph. Plot the two variables in a graph or table, where the two variables start from 100; that is, the base year will be the first year of the five-year period. Investigate whether there is any relationship between the two variables over time, i.e. whether they move together or not, and explain why.
8. Analysis of earnings from operations (income statement) and cash from operations (net operating cash flow from the cash flow statement), for each company for the last five years. Plot the two variables in a graph or table, both starting at 100