HA206_M3_Ratio Analysis
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HA206 Module 3: Ratio Analysis
Directions:
Complete the table below. 1.
Calculate the ratios for Johnson & Johnson and Pfizer Inc. To do this, you will need to search online to locate the latest 2 annual financial statements for these companies (don’t use the TTM one). Copy and paste the URL for the financial statements in the box under the company name. See the example worksheet for guidance.
a.
Please note that for most ratios, you will only need to use the latest annual financial statement, but for some you may need to calculate the average which will require using the latest 2. b.
Be sure to show your work.
c.
You can assume that preferred dividends are 0 for any calculations even if they are not actually 0.
2.
For each ratio, note which one of the companies has the better ratio and why it is better. 3.
Paste a screenshot of the price for each company at the end of the worksheet.
Johnson & Johnson (JNJ)
Johnson & Johnson (JNJ) Income Statement - Yahoo
Finance
Pfizer Inc. (PFE)
Pfizer Inc. (PFE) Stock Price, News, Quote & History - Yahoo Finance
Which company’s ratio is better and why?
Working Capital Ratio
(WCR)
Current assets:
187,278,000
Current Liabilities: 110,574,000
WCR=1.69
Current assets:
197,205,000
Current Liabilities: 101,289,000
WCR=1.95
Pfizer ratio is better because it is higher meaning more assets to pay off any liabilities. Earnings Per Share (EPS)
EPS: 6.86
EPS:5.59
J&J ratio is better. Making higher earnings per share
Price-Earnings Ratio (P/E)
Price: 156.10
EPS: 6.86
Price: 28.64
EPS: 5.59
Pfizer is better due to higher ratio on price/earnings per share
P/E: 4.17
P/E: 5.12
Return on Equity (ROE)
Net income:
17,941,000/ Stock holders equity76,804,000=
0.23
Net income: 31,372,000
Stockholders Equity: 95,661,000
0.32
Pfizer is better due to higher return
Operating Margin
Operating Income:
23,703,000
Revenue:
94,943,000
0.25
Operating Income:
37,272,000
Revenue:
100,330,000
0.37
J&j is better due to lower ratio of operating income/revenue
Debt-to-Assets
Total debt:
39,659,000
Total asset: 187,378,000
=0.21
Total debt:
34,870,000
Total asset: 197,205,000
=0.17
Pfizer is better due to having a lower ratio for debt
Inventory Turnover
Cost of Revenue: 38,089,000
Missing other half? Could not find info needed.
Cost of revenue: 34,344,000
Missing other half? Could not find info needed.
Operating Cash Flow Ratio
Operating Cash Flow:
21,194,000
Current Liabilities:
55,802,000
0.38
Operating Cash Flow:
29,267,000
Current Liabilities:
42,138,000
0.69
Pfizer Ratio is better due to it being higher meaning it is in better position for liquidity and lower risk of default
Asset Turnover
Sales:
Net assets:
Sales:
Net assets:
Days Sales in Inventory
Info not found on site?
Info not found on site?
Return on Assets
Info not found on site?
Info not found on site?
Price Screenshot:
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Complete this question by entering your answers in the tabs below.
Analysis Bal Analysis Inc
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Round your answers to 2 decimal places. (i.e., .2345 should be entered as 23.45).)
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Year 3
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Percentage of
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Current assets
Cash
$ 17,400
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Marketable securities
21,000
7,600
Accounts receivable (net)
54,700
46,900
Inventories
136,200
144,400
Prepaid items
25,700
11,800
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223,300
Investments
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270,500
255,100
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29,700
24,900
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$ 583,300
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Complete this question by entering your answers in the tabs below.
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6,000
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54,000
46,000
Inventories
135,000
143,000
Prepaid items
25,000
10,000
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274,000
241,000
27,000
20,000
270,000
255,000
29,000
24,000
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326,000
299,000
Total assets
$ 600,000
$540,000
Liabilities and stockholders' equity
Liabilities
Current liabilities
Notes payable
$ 17,000
$
6,000
Accounts payable
113,800
100,000
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Complete this question by entering your answers in the tabs below.
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100.00
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