Question by uc86


									                                Eastern Michigan University Accounting
                                240 - Computer Project Three Fall 2011
For this project, you will access financial ratio information on the Internet and prepare a comparative analysis of
the companies that you research. Your completed work will include both a spreadsheet and a short paper. The
financial ratios that you will research and the corresponding pages from your textbook are:

    Price/earnings ratio (pages 522, 523-524)

    Earnings per share (pages 509, 521-523)

    Net profit margin (pages 227-227)

    Return on equity (pages 522-523)

 Current ratio (page 65)

Be sure to read the section about each ratio on the pages indicated. Pay close attention to how the ratio is computed
and what it measures (liquidity, profitability, etc.).

    1. Prepare a spreadsheet as illustrated below. Adjust column widths appropriately.

    2. Go to In the “Get Quotes” area, type “HD”. Then click on “Get Quotes” - see

    On The Home Depot, Inc.. page Click on “Key Statistics” – see below:

3. On the Key Statistics webpage, you will see the following tables with ratio data. The circled numbers
   indicate the five ratios that you will use for this project. Some ratios may be N/A (not available). If that is
   the case, go ahead and use “N/A” in your spreadsheet. NOTE - the data shown below is not for Home
   Depot. Do not use it. Also Note: “P/E” = Price/Earnings and “EPS” = Earnings per Share.

4. Enter the ratios into your spreadsheet.

5. Repeat steps 2 through 4 using “LOW” the “Get Quotes” field.

6. Write a short paper (one to two pages in length) comparing the two companies’ ratios by addressing the
   three questions below:

7. Which company has better return to investors as measured by return on equity and price/earnings ratio?

8. Which company is more profitable as measured by the net profit margin and earnings per share?

9. Which company is more liquid as measured by the current ratio?

10. Note: Since part of your grade on this assignment will be based on your written communication
    skills, your answers should be written in complete, fully-developed sentences that are free of
    grammatical and spelling errors. Also, as with every assignment in this course, your submission to
    your instructor is required to be your own, unique work.

11. Complete any other requirements given by your instructor and turn in your spreadsheet and short paper by
    the due date.


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