Comparative Analysis of Financial Statements Between Two Companies

By using the consolidated income statements, balance sheet and cash flow statement, we can assess the company’s financial position. On the income statement, the company’s operation revenue increased by 4.5% ($393.4 million) from year 2006 while its operating income decreased by $65.1 million in the same period. Without considering the net-cash settlement feature expense recorded in 2007, operating income increased $103.6 million. Even though including the net-cash settlement feature

The annual report and 10-K filings were obtained from Yahoo! Finance. The financial statements for both companies used in this report are Consolidated Statement of Income, Consolidated Balance Sheets, and Consolidated Statement of Cash Flow from 2010 to 2012. All tables are

Two traditional approaches to fund programs are grants and donations. Grant funding is typically the largest revenue source for a human service organization. Vast arrays of different grants are available for funding purposes. The XYZ Corporation can utilize these funds from government private foundations. The second traditional fundraising method to fund programs is donations. Building a relationship with the community and having a confident CEO that will reach out for donations can impact the amount of donations your organization receives annually. The XYZ Corporation has a large clientele and therefore should be able to gain recognition within the community and gain donations.

This research paper is prepared for purposes of assessing financial condition as well as overall operating performance of two same sector entities.

The profitability ratio shows the ability for a company to generate profits. Ratios that are used calculating profitability of a company are return on assets and return on equity. The return on assets calculates the ability of a company to effectively use assets to generate income, the percentages per quarter in year one are; 76%, 22%, 34%, 37%. This shows profit during each quarter. In years two, three, and four the percentages are; 68%, 54%, 49%, 38%. These ratios show a slight decline but still a solid profit. The return on equity shows the amount of money earned per dollar investing into the company by shareholders. By quarter, year one return on equity is .81 .61 .28 .29, years two, three and four are all .32. These numbers show an above average return, the average return in the United States is between .10-.15, and over .20 is considered above average (Kennon, 2011.)

In terms of industry profitability, it appears that profit margins have a tendency to fall. This is because competition is high and customers tend to buy low-priced high-value items. The average gross margin and net profit margin is 37.1% and 14.3%, respectively (MSN Money, 2010).

Return on equity tells you how effectively a company is using the dollars invested in it by stockholders. ROE is the most often quoted single statistic when describing a firm 's performance. It is also one of the statistics considered to be most useful by stockholders.

The setting of a business compels most when there is a viable opportunity for the firm, organization or venture to succeed. It is in this pursuit for success that most firms are seeking the service off establishing and determining the performance of the firms. Measuring firm performance has several means of doing, however, the most commonly used one is the Return on Assets (Rumelt, 2011). Return on assets is a measurement methodology that assesses various factors and matrices in the line of action. However, most firms focus on the financial side of the venture, diverting their attention from the most compelling basis of the metric method. Return on assets is a tool that requires a critical and careful selection of the base criteria for measuring the success of the firm or company. However, focusing on the financial side only leaves the investors happy but the firm stagnating.

The ratios returns on investment (ROI) and return on equity (ROE) are two of the most popular measure of profitability of a company and, along

Every company for example Wal-Mart worries about its profitability. One of the most regularly utilized implements of financial ratio analysis is profitability ratios which are utilized to figure out the bottom line of the company. Profitability measures are vital to corporation managers and owners alike. If a small industry has outside stockholders who have put their own money into the corporation, the primary owner surely has to show profitability to those equity stockholders. (Blanchard, 2008)

Profitability (performance) ratios are used to assess a company’s ability to create equity as compared to its debt and other appropriate expenses created during a particular time frame. A favorable analysis of profitability ratios will reveal that a company’s value is higher than a competitor’s value.

Through indicating the profit margin, return on assets and return on equity to measure sales, assets and other factors, shareholders also can know the global profit performance of the firm and indicate that how the condition of company is.

This report is to compare the financial situations of two companies in the restaurant industry, Darden Restaurants Inc. of Florida and Brinker International Inc. of Texas. The report will provide a detailed analysis and summary of several things including financial analysis, industry history and analysis, both companies history and analysis, vertical and horizontal analysis, and the creditworthiness of each company.

The big problem with H&M's annual report is that it does not contain financial statements. In order to acquire balance sheet figures, the latest quarterly financial report has been acquired. The H&M balance sheet does not disclose anything about the types of equity the company has. The Abercrombie and Fitch balance sheet does. The book value of its Class A common stock is $1.033 million. The paid-in capital is $369 million, retained earnings are $2.32 billion and the accumulated other comprehensive income is $6.4 million.

Company B (88.9%) has a higher gross profit margin most likely because the firm not only manufactures and mass markets a broad line of prescription pharmaceuticals, over-the-counter remedies, consumer health and beauty products but also manufactures medical diagnostics and devices. Company A is lower (76.1%) due to its limited product range (only manufactures drugs).