Comparative Analysis of Oracle Corporation and Microsoft Corporation
Using the financial statements for Oracle Corporation and Microsoft Corporation, respectively, you will calculate and compare the financial ratios listed further down this document for the fiscal year ending 2011 and prepare your comments about the liquidity, solvency and profitability of the two companies based on your ratio calculations.Supporting calculations must be shown either as a formula or as text typed into a different cell. If you plan on creating your own spreadsheet, please follow the format provided in the Tootsie Roll and Hershey template file. ( but i prefer not to create different spreadsheet. i prefer to follow the format provided in the Tootsie Roll and Hersgey template file)
there are some requirements. First requirement is that a completed worksheet profiles tab which contains a one paragraph description regarding each company with information about their history, what products they sell, where they are located, etc.
second requirement is that All 18 ratios for each company with the supporting calculations and commentary on your worksheet ratio tab. Supporting calculations must be shown either as a formula or as text typed into a different cell. The ratios are listed further down this document. Your comments for each ratio should include more than just a definition of the ratio. You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios.
the last requirement is that The Summary and Conclusions worksheet tab which is an overall comparison of how each company compares in terms of the major category of ratios (Liquidity, Profitability, and Solvency). A nice way to conclude is to state which company you think is the better investment and why.
Required Ratios for Final Project Submission
1) Earnings per Share
2) Current Ratio
3) Gross Profit Rate
4) Profit Margin Ratio
5) Inventory Turnover Ratio
6) Days in Inventory
7) Receivables Turnover Ratio
8) Average Collection Period
9) Asset Turnover Ratio
10) Return on Assets Ratio
11) Debt to Total Assets Ratio
12) Times Interest Earned Ratio
13) Payout ratio
14) Return on Common Stockholdersa Equity Ratio
15) Free Cash Flow
16) Current Cash Debt Coverage Ratio
17) Cash Debt Coverage Ratio
18) Price/Earnings Ratio [For the purpose of this ratio, for Oracle, use the market price per share on May 30, 2011 and for Microsoft, use the market price per share on June 30, 2011]
The Appendix to Chapter 13 ( i will upload for the writer) contains ratio calculations and comparison comments related to Kellogg and General Mills so you will likely find this information helpful.