{"id":31016,"date":"2024-08-13T00:57:33","date_gmt":"2024-08-13T00:57:33","guid":{"rendered":"https:\/\/www.writemyessays.app\/blog\/questions\/accounting-analysis-of-the-performance-of-two-competitors-within-the-same-industry\/"},"modified":"2024-08-13T00:57:33","modified_gmt":"2024-08-13T00:57:33","slug":"accounting-analysis-of-the-performance-of-two-competitors-within-the-same-industry","status":"publish","type":"questions","link":"https:\/\/www.writemyessays.app\/blog\/questions\/accounting-analysis-of-the-performance-of-two-competitors-within-the-same-industry\/","title":{"rendered":"accounting analysis of the performance of two competitors within the same industry"},"content":{"rendered":"

In
\nthis project, you will use your understanding of financial, as well as
\nmanagerial, accounting to prepare an analysis of the performance of two
\ncompetitors within the same industry. To prepare your analysis, you will use
\nMicrosoft Excel and data from the internet.  Then, you will communicate
\nthe results of your analysis in a written report.  <\/span>Thus, this project will help you build your
\ncritical thinking, technology, and communication skills. <\/span><\/span><\/span><\/p>\n

 <\/span><\/p>\n

 <\/p>\n

 <\/span><\/p>\n

Find
\ninformation on your company, and its competitor, at www.msn.com\/money<\/a><\/span>, following these
\nsteps: <\/p>\n

1.    
\n<\/span><\/span><\/span>In the search bar that reads Search stocks,
\nETFs, & more<\/b> type the name of your company.  <\/span>The \u201cticker,\u201d a one to four letter identifier
\n(such as AAPL for Apple Inc.), along with your company\u2019s name will begin to
\nappear.<\/p>\n

2.    
\n<\/span><\/span><\/span>Select your company\u2019s name.  <\/span>The latest stock quote along with the graph presenting
\nthe stock price movement for your company will appear on your screen.  <\/span>In between the quote and graph is a menu bar
\nwith the SUMMARY<\/b> item
\nhighlighted.  <\/span>Select the menu item ANALYSIS<\/b>.<\/p>\n

3.    
\n<\/span><\/span><\/span>Right below this menu bar is another menu bar,
\nclick on Key Ratios <\/b>if not already highlighted. After clicking on Key
\nRatios, <\/b>just below it <\/b>there are several more options to click on
\nincluding Per Share Values, Growth Rates, Profitability, Valuation<\/b>, Leverage
\n& Liquidity and Efficiency. <\/b>Under each of these options there are
\nseveral ratios you will be looking at. For example, under the Efficiency <\/b>option
\nyou will find the asset turnover and inventory turnover ratios for your
\nspecific company. <\/p>\n

4.    
\n<\/span><\/span><\/span>By clicking on a specific ratio, for example Asset
\nTurnover<\/b> which is located under the Efficiency <\/b>tab, a graph will
\nappear and you will be able to compare your company\u2019s ratio to the industry
\nratio. For example, Amazon is in the diversified retailer industry, and they have
\na lower asset turnover ratio compared to the industry average. <\/p>\n

5.    
\n<\/span><\/span><\/span>To select a competitor for your company in the
\nsame industry, under each ratio graph there is Compare <\/b>button along with
\nsome competitors listed to the right of the button. See screenshot below if
\nneeded. <\/b>By clicking on one of the competitors, another graph will appear
\nwhere you could compare your company\u2019s ratio to the competitors. For example,
\nusing Amazon as your company, click on the Efficiency tab, <\/b>you can then click
\non Asset Turnover ratio, <\/b>under the asset turnover chart click on one of
\nthe competitors (TGT or BBY for Amazon) than you will be able to compare
\nratios. All competitors should be in the same industry as your company. <\/p>\n

\n

 <\/p>\n

Please
\nenter on your spreadsheet, the following information for your company, and the
\ncompetitor selected, for the most recent 2 years.<\/p>\n

 <\/p>\n

A.    
\n<\/span><\/span><\/span> <\/span>Using the
\nFinancials<\/b> option on the menu, and
\nthen the Income Statement<\/b> and Balance Sheet<\/b> options which then appear
\nbelow the top menu:<\/p>\n

a.    
\n<\/span><\/span><\/span>Total Current Assets<\/p>\n

b.    
\n<\/span><\/span><\/span>Total Fixed Assets<\/p>\n

c.     
\n<\/span><\/span><\/span>Intangibles<\/p>\n

d.    
\n<\/span><\/span><\/span>Total Current Liabilities<\/p>\n

e.    
\n<\/span><\/span><\/span>Long Term Debt<\/p>\n

f.     
\n<\/span><\/span><\/span>Total Shareholder\u2019s Equity<\/p>\n

g.    
\n<\/span><\/span><\/span>Revenues<\/p>\n

h.    
\n<\/span><\/span><\/span>Cost of Goods Sold <\/p>\n

i.      
\n<\/span><\/span><\/span>Gross Profit (also referred to as Gross Margin)<\/p>\n

j.      
\n<\/span><\/span><\/span>Operating Expenses<\/p>\n

k.    
\n<\/span><\/span><\/span>Net Income (also referred to as Net Profit)<\/p>\n

 <\/p>\n

B.<\/span><\/span> As mentioned above (or by
\ncalculating from the financial statements for your companies), enter the
\nfollowing financial ratios, for your company and its competitor for the past 2
\nyears.<\/p>\n

a.    
\n<\/span><\/span><\/span> <\/span>Current
\nRatio<\/p>\n

b.    
\n<\/span><\/span><\/span>Leverage Ratio (financial leverage)<\/p>\n

c.     
\n<\/span><\/span><\/span>Gross Profit (Gross Margin on the site)<\/p>\n

d.    
\n<\/span><\/span><\/span>Return on Equity<\/p>\n

e.    
\n<\/span><\/span><\/span>Return on Assets<\/p>\n

f.     
\n<\/span><\/span><\/span>Return on Sales (Operating Margin)<\/p>\n

g.    
\n<\/span><\/span><\/span>Asset Turnover<\/p>\n

h.    
\n<\/span><\/span><\/span>Inventory Turnover<\/p>\n

 <\/p>\n

C. Analyze the
\nprofitability of your two companies:<\/p>\n

a.  <\/span>Which company showed the greatest improvement
\n(or least decrease) in profitability as measured by ROA?<\/p>\n

b.  <\/span>Which company showed the greatest improvement
\n(or least decrease) in profitability as measured by ROE?<\/p>\n

c.  <\/span>Are your answers for (a) and (b) different?<\/p>\n

d.  <\/span>If yes, why?<\/p>\n

 <\/p>\n

D. Analyze the
\nproductivity of your two companies:<\/p>\n

a.  <\/span>Which company showed the greatest improvement
\n(or least decrease) in productivity as measured by Asset Turnover?<\/p>\n

b.  <\/span>Based on the available information what would
\nyou say was the biggest cause of this increase (or lesser amount of decrease)
\nin productivity?<\/p>\n

 <\/p>\n

E.
\n <\/span>Estimate Cost Structure of the 2
\ncompanies.  <\/span>Use the ratio of current
\nassets to total assets as an estimate of the cost structure. <\/p>\n

i.      
\n<\/span><\/span><\/span> <\/span>Which
\ncompany has a higher fixed cost structure?<\/p>\n

j.      
\n<\/span><\/span><\/span>In this exercise, do you think that the current
\nratio is a reasonable representation of the relative cost structure of your two
\ncompanies?  <\/span>Hint:  <\/span>This would depend on the nature of the
\nnon-current assets of your companies.<\/p>\n

k.    
\n<\/span><\/span><\/span>Is the year-to-year change over the past 2 years,
\nin the same direction for the 2 companies?<\/p>\n

l.  <\/span><\/span><\/span>Given
\nthe relative cost structures of the two companies, and the change in sales for
\nthe 2 companies, what would you have expected for the change in Gross
\nProfit?  <\/span>An increase?  <\/span>Decrease? 
\n<\/span>Why?<\/p>\n

 <\/p>\n

Please submit your completed Spreadsheet
\nusing the Assignment function in Blackboard. <\/p>\n

 <\/span><\/p>\n

Spreadsheets will
\nbe graded based on the accuracy of your computations, proper use of formulas,
\nand professional appearance. Late or incompletely submitted assignments will be
\npenalized by 10% per business day.<\/p>\n","protected":false},"excerpt":{"rendered":"

In this project, you will use your understanding of financial, as well as managerial, accounting to prepare an analysis of the performance of two competitors within the same industry. To prepare your analysis, you will use Microsoft Excel and data from the internet.  Then, you will communicate the results of your analysis in a written […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","meta":[],"disciplines":[44],"paper_types":[],"tagged":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/questions\/31016"}],"collection":[{"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/questions"}],"about":[{"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/types\/questions"}],"author":[{"embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/comments?post=31016"}],"version-history":[{"count":0,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/questions\/31016\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/media?parent=31016"}],"wp:term":[{"taxonomy":"disciplines","embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/disciplines?post=31016"},{"taxonomy":"paper_types","embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/paper_types?post=31016"},{"taxonomy":"tagged","embeddable":true,"href":"https:\/\/www.writemyessays.app\/blog\/wp-json\/wp\/v2\/tagged?post=31016"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}