You are the accountant assigned to a new client who is interested in a new stock investment potential
You are the accountant assigned to a new client who is interested in a new stock investment potential. The client has requested independent research on each new company. He has asked for a comparison of the Walmart and Target companies to determine which would be a stronger investment for the retail industry portion of his portfolio. You need to complete the following for him in a business case analysis report. Include the following: Cover Page, Executive Summary, Table of Contents, Body of Analysis (including the formulas and verbal analysis listed below), Summary/Conclusion, and any sources.
Given financial statements for two companies. Points should be 30% for calculations and 70% for interpretation of results. Walmart v Target in Appendix (attached) – provide pdf also.
Prepare a Case Analysis with Cover Page, Executive Summary, Table of Contents, Page Numbers, and Sources. (Word Document)
1) Prepare common sized financial statements for Income Statement and Balance Sheet
In at least 250 words, compare and contrast the common sized financial statements for the companies to each other. Explain what they tell us about each company and in comparison, to each other.
2) Compute the following ratios:
1) Return on assets
2) Return on equity
3) Net profit margin
4) Inventory turnover
5) Current ratio
6) Debt to equity ratio
Discuss what each ratio means for the individual company, as compared to their competitor, and as compared to the industry average.
In the Case Study you need to evaluate the different ratios that are listed as well as evaluating the companies’ Common Size Financial Statements.
https://www.investopedia.com/articles/active-trading/070715/target-vs-walmart-whos-winning-big-box-war.asp
You can summarize the information in this article which compares Target and Wal-Mart.
This Executive Summary should be placed before the evaluation of the different financial ratios.
Be sure toAnalyze common sized financial statements for Income Statement and Balance Sheet
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