finance hw you must put all the parts together and they are all on the attachments

This week you will compile all the information for your course project. You will submit a document prepared as a business report. This report will include information from your two companies in the same industry that you have been following throughout this course.

Required:

Prepare a 3-5 page business report that summarizes the information you have researched on your two companies. The report should include the following:

• Name and background information on your two companies.
• Financial statement and ratio analysis on both companies.
• Chart that includes the trend on the companies’ stock prices.
• Indicate which company you feel is the most financially stable. Support your answer with your research.

Stock

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Watch

04/15/13

04/15/13

Nasdaq

04/15/13

NYSE

04/15/13

Nasdaq

Date	Stock	Stock Symbol	Current Price	Board T raded On	Financial Facts
				04/15/13	Microsoft Corporation	MSFT	28.69			Nasdaq	MSFT pays a 0.92 Dividend; current assets have risen each year over past three years; income statements show positive growth over past three years
AT&T	T	37.95		NYSE	T pays a 1.80 Dividend; Balance sheet reflects current assets dropped from 2011 to 2012; Income statements reflect fluctuating amount of profit over past three years, no losses
Apple, Inc	AAPL	419.85	AAPL pays a 10.62 Dividend; Balance sheet reflects current assets have risen over the past three years; Income statement shows positive growth over past three years.
American Eagle Outfitters	AEO	19.16	AEO pays a 0.44 Dividend; Balance sheet reflects current assets have dropped in the past year; profits have increased on the income statement over the last three years.
Starbucks Corporation	SBUX	57.71	SBUX pays a 0.84 Dividend; Balance sheet reflects current assets have risen over the past three years; Income statement reflects that the company has had increased profits over the last three years and has not operated at a loss.

The three stocks that I would like to choose are:

Microsoft Corporation (MSFT)

Apple, Inc (AAPL)

Starbucks Corporation (SBUX)

 

The other two investments that I choose are:

Wells Fargo Special CD 58 month term at .60% APY

Wells Fargo Money Market Savings at .03 APY

 

The Money Market Savings will be the most affected by the interest rates as they change. This is because the rate is adjustable as the interest rates within the economy change. 

 

Most Risky to Least Risky

5. Starbucks

4. Apple

3. Microsoft

2. Money Market Savings

1. Special CD

 

Starbucks is the most risky because their product is the most likely to be affected by recession economic issues. This can cause their stock price to vary greatly.  Apple is number four because they have all of their eggs in one basket per say, if the iPhone or iPad does not continue to do well, the company would be in serious trouble. Microsoft is less risky because they are better diversified than Apple. The Money Market is more secure than any of the stocks but the rate can change which makes it more risky than the guaranteed percentage on the special CD which is the most secure, and best deal. 

The three stocks that I would like to choose are:

Microsoft Corporation (MSFT)

Apple, Inc (AAPL)

Starbucks Corporation (SBUX)

 

The other two investments that I choose are:

Wells Fargo Special CD 58 month term at .60% APY

Wells Fargo Money Market Savings at .03 APY

 

The Money Market Savings will be the most affected by the interest rates as they change. This is because the rate is adjustable as the interest rates within the economy change. 

 

Most Risky to Least Risky

5. Starbucks

4. Apple

3. Microsoft

2. Money Market Savings

1. Special CD

 

Starbucks is the most risky because their product is the most likely to be affected by recession economic issues. This can cause their stock price to vary greatly.  Apple is number four because they have all of their eggs in one basket per say, if the iPhone or iPad does not continue to do well, the company would be in serious trouble. Microsoft is less risky because they are better diversified than Apple. The Money Market is more secure than any of the stocks but the rate can change which makes it more risky than the guaranteed percentage on the special CD which is the most secure, and best deal. 

1. Liquidity Ratios:

Current ratio=current assets/current liabilities

Apple= 57,653,000/ 38,542,000 =1.5

Microsoft= 85,084,000/32,688,000=2.6

-The ratio of current assets to current liabilities is better in Microsoft than in apple.

Quick Ratio=current assets-inventory/current liabilities

Apple= 57,653,000- 791,000 /38,542,000=1.48

Microsoft=85,084,000- 1,137,000 /32,688,000=2.57

-Microsoft has a better quick ratio than apple, i.e its current assets excluding inventory are more in ration than apple.

2. Activity or Asset Utilization Ratios

Receivables turnover=annual credit sales/accounts receivables

Apple= 156,508,000/32,589,000 =4.8

Microsoft=73,723,000/9,653,000=7.6

· Microsoft has a more credit sales than apple

Average collection period=accounts receivables/annual credit sales/365

Apple= 21,275,000/156,508,000/365=0.00037

Microsoft=17,815,000/73,723,000/375=0.00064

-Microsoft collects its receivables for a shorter period than apple.

3. Profitability Ratios

Gross profit margin=sales-cost of sales/sales

Apple= 156,508,000-87,846,000/156,508.000=43.87%

Microsoft=73,723,000-17,530,000 /73,723,000=76.22%

-Apple has a lower cost of sales ratio to sales than Microsoft.

Return on assets=Net income/total assets

Apple= 41,733,000/176,064,000 =0.237

Microsoft=16,978,000 /121,271,000=0.14

Apple’s returns on assets is higher than Microsoft.

Return on equity=Net income/shareholders equity

Apple= 41,733,000/118,210,000 =0.353

Microsoft=16,978,000 /66,363,000=0.02558

The equity return represent the ratio of available funds to the shareholders, Apple shareholders get more funds to assets than Microsoft.

4. Leverage Ratios also called Debt Utilization Ratios

debt-to-equity ratio=total Dedt/Total Equity

Apple= 0

Microsoft= 10,713,000+ 1,231,000 / 66,363,000=18%

Debt Ratio=Total Dedt/total Assets

Apple= 0

Microsoft=10,713,000+ 1,231,000/121,271,000=9.8%

-Apple does not have any debt, hence cannot be compared with Microsoft.

5. Coverage Ratios

Debt coverage ratio=Net operating income/total debt

Apple= 0

Microsoft=16,978,000 /10,713,000+ 1,231,000=1.42

-Apple does not have any debt, hence cannot be compared with Microsoft.

1. Starbucks

2. Apple

3. Microsoft

 

The 3 companies I picked are up above. Starbucks stocked has gone up, Apple stock has gone down, Mircosoft stock has gone up, Money Market saving stock the reason why some have gone up and some have went down Is because of different product being put out and what people like more of.

 

No

05/29/13

No

No

05/29/13

No

No

05/29/13

No

No

05/29/13

No

No

Date

Stock

Stock Symbol

Stocks Current

Preferred Stock

convertible investments

05/29/13

Microsoft Corporation

MSF T

34.88 0.14(0.40%)

No

AT&T

T

35.91 0.27(0.75%)

Apple, Inc

AAPL

444.95 3.51(0.80%)

American Eagle Outfitters

AEO

19.35 0.60(3.01%)

Starbucks Corporation

SBUX

63.63 0.63(0.98%

 
 
 

In order to have a Convertible Investment you have to have preferred stock and none of the company I am watching have preferred stock.