Name:___________________________________________________________ 30 pts
Financial Statement Analysis of two Public Retailers
Company Choices: Crocs vs Timberland, Target vs. Walmart, Apple vs.
Microsoft, or Barnes and Noble vs Amazon
Acceptable Industry Standards
Cost of Merchandise Sold
not more than 50% of sales
Gross Profit on Sales
not less than 50% of sales
Total Expenses
not more than 35%
Net Income
not less than 15%
Access this data from the Income Statement on finance.yahoo.com
Part 1:
Company:__________________________________
Calculate the Cost of Revenue Sold %
Cost of Revenue / Total Revenue
2009: ___________% = ________________ / __________________
2010: ___________% = ________________ / __________________
Does this % Pass Industry
standards’ test (Y or N)
________
________
Calculate the Gross Profit %
Gross Profit / Total Revenue
2009: ___________% = ________________ / __________________
20010: ___________%= ________________ / __________________
Does this % Pass Industry
standards’ test (Y or N)
________
_________
Calculate the Net Income %
Net Income / Total Revenue
2009: ___________% = ________________ / __________________
20010: ___________%= ________________ / __________________
Does this % Pass Industry
standards’ test (Y or N)
________
_________
Calculate the Selling General and Administrative Expense %
Selling General & Admin Expense / Total Revenue
2009: ___________% = ________________ / __________________
2010: ___________%= ________________ / __________________
Does this % Pass Industry
standards’ test (Y or N)
________
_________
Acceptable Industry Standards
Cost of Merchandise Sold
Gross Profit on Sales
Total Expenses
Net Income
not more than 50% of
sales
not less than 50% of
sales
not more than 35%
not less than 15%
Part 2:
Company:________________________________________
Calculate the Cost of Revenue Sold %
Cost of Revenue / Total Revenue
2009: ___________% = ________________ / __________________
2010: ___________% = ________________ / __________________
Does this % Pass Industry
standards’ test (Y or N)
________
________
Calculate the Gross Profit %
Gross Profit / Total Revenue
2009: ___________% = ________________ / __________________
20010: ___________%= ________________ / __________________
Does this % Pass Industry
standards’ test (Y or N)
________
_________
Calculate the Net Income %
Net Income / Total Revenue
2009: ___________% = ________________ / __________________
20010: ___________%= ________________ / __________________
Does this % Pass Industry
standards’ test (Y or N)
________
_________
Calculate the Selling General and Administrative Expense %
Selling General & Admin Expense / Total Revenue
2009: ___________% = ________________ / __________________
2010: ___________%= ________________ / __________________
Does this % Pass Industry
standards’ test (Y or N)
________
_________
Part 3: There are 8 major Indicators on Financial Statements, BS and IS, that Stakeholders can look to in
order to determine the company’s overall Financial Health
Company:________________________________________(Choose one company from above)
1. How has the TOTAL ASSET account values changed over the past 2 fiscal years…increase, decrease,
consistent?______________________________________
2. How do the profitability %s compare to its competitor….better, worse, the same?
_____________________________________
3. Liquidity: Has cash increased or decreased throughout the past 3 fiscal years? ____________
a. By how much? $____________________
4. Has the AR (net receivables) amount increased or decreased throughout the past 3 fiscal years?
_________________________
5. Has the AP amount increased or decreased throughout the past 3 fiscal years? ____________
6. How has the value of Inventory changed throughout the past 3 fiscal years? _______________
7. Analysis of Solvency – long-term survival:
a. What is the Net Income/Loss for the past 3 fiscal periods?
i. ________________ ____________________ __________________
b. What is the Demand for products they sell, in your opinion, is it going up or down and
WHY?
8. Debt-Equity Ratio for 2010: ______________________________
Total liabilities / Total Stockholder Equity
Part 4: Accountant Recommendations:
1. What are 3 FINANCIAL ways that both retailing companies you analyzed can increase their Profit
Margin?
a.
b.
c.
2. Do you feel comfortable investing your money in the company you analyzed? ______________
3. Which 2 indicators helped you the most in making your decision to invest or not invest?
a. _________________________________________________
b. _________________________________________________