Write a 8-10 page research paper on the selected companies below. The 8-10 pages do not include the title page, graphs or references. The paper must include an introduction or abstract and a summary conclusion. (I will assign the group members to the groups.)
OPTION: Your group may select any two companies, who are competitors in the same industry. Please let me know in advance if you wish to select different companies than what is offered below.
Company Selected is:
· CVS and Walgreens
Instructors have the option to make this either an individual or group project assignment.
Project Assignment Using Coke and Pepsi as an Example:
Long time competitors in the soft drink industry, PepsiCo and Coca-Cola continue efforts to gain additional market share. Which do you prefer, Coke or Pepsi? Let’s take a look at these two companies from a financial perspective rather than our drink preference.
To learn more about PepsiCo and Coca-Cola Enterprises, download the latest PepsiCo 2014 Annual Report at: https://www.pepsico.com/docs/album/default-document-library/pepsico-2014-annual-report_final.pdf and the Coca-Cola 2014 Annual Report at http://ir.cokecce.com/phoenix.zhtml?c=117435&p=irol-reportsannual:. Review the annual reports for general information.
Required:
1. Read -Understanding the Income Statement at: http://www.investopedia.com/articles/04/022504.asp
2. Read -Reading the Balance Sheet at: http://www.investopedia.com/articles/04/031004.asp
3. Compute- the following financial ratios for both companies and provide as an appendix to the required paper. If you need help understanding the meaning of the ratios or how to they are computed, go to: http://www.investopedia.com/university/ratios/
Liquidity measurement ratio: · Current ratio
Profitability indicator ratios:· Return on assets · Return on equity
Debt ratio: · Debt ratio
Operating performance ratio: · Fixed asset turnover ratio
Cash flow indicator ratio: · Dividend payout ratio
Investment valuation ratio: · Price / Earnings ratio
For each company and comparing the two, you are to write a eight to ten (8-10) page report that answers the following:
Question 1. Provide a short background on each company, the industry and the market (growing, declining, etc?) in which they operate. (This should be no more than 1- 1.5 pages for both companies in total and can be a part of your introduction.)