Comparative Analysis

Case Study Assignment: Case 1-3: Comparative Analysis,
Credit and Equity

Comparative Analysis
This Assignment will firmly plant your feet in the world of Financial Statement Analysis, setting the
stage for much of what you will do going forward. It is challenging, but will set you up with tools to
make better business decisions going forward, in this class and in the real world.
Locate the Case 1-3: Comparative Analysis, Credit and Equity on page 61 of your text. Be sure to
submit thoughtful and substantial answers to the questions following the case regarding the two
companies analyzed.

Comparative Analysis
Provide the following information in a PowerPoint presentation to the management team deciding
on which bank stock to select:
1. Compute the current ratio, acid test ratio, accounts receivable turnover, inventory
turnover, days’ sales in inventory, and days’ sales in receivables ratios for both
companies.
2. Identify by this analysis the company that you consider the better short-term credit risk
and explain why.
3. Compute the net profit margin, total asset turnover, return on total assets, and return on
common stockholders’ equity for both companies.
4. Assume each company paid a cash dividend of $1.50 per share and that each
company’s stock can be purchased at $25 a share. Compute each company’s priceearnings
ratio and dividend yield.

Comparative Analysis
5. Identify which company’s stock you would recommend as the better investment and
explain why.
This is a challenging activity. You should prepare to spend a substantial time working on your
response.

Comparative Analysis
Assignment Instructions
This project is to be submitted using Microsoft PowerPoint slideshow. It should include a title page
with your name, course number, your instructor’s name, date, and the subject of the presentation.
Follow this with a brief statement that you (and you alone) produced the project. The project
should include the following elements:
• Introduction bullet point slide summarizing the project and the companies.
• A slide summarizing the ratio analysis of the two companies
• A slide summarizing the credit risk analysis and decision
• A slide summarizing the asset and equity performance of both companies
• A slide summarizing stock performance and your investment advice
• A slide if needed for In-text citations and reference
• Each slide should include your speakers note or audio note.
Unit 2 [MT482]

Comparative Analysis
Page 2 of 2
Directions for Submitting your Assignment:
Compose your Assignment in a Microsoft PowerPoint presentation and save it as Username- MT482
Assignment-Unit 2.pptx (Example: TAllen- MT482 Assignment Unit 2.pptx). Submit your file by
selecting the Unit 2: Assignment Dropbox by the end of the unit.
MT482 Unit 2 Assignment: Comparative Analysis Case 1-3 Possible
Points
Points
Earned
Content, Analysis, and Effective Writing Skills
• Response successfully answers Assignment questions for
this case.

• Correctly calculates: Current Ratio, Acid Test, A/R.

• Turnover, Inventory Turnover, and DSO.

10
• Correctly computes: Net Profit Margin, Asset Turnover, ROS, and
ROE.
10
• Response to questions exhibit strong critical thinking and
appropriate analysis.

• Better credit risk and why.
6
• Better investment and why.
6
• Sentences are clear, concise, and direct.

• Tone is appropriate.

• Grammatical skills are strong with almost no errors per
page.
8
TOTAL 40

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