Question

This course contains a Course Project, where you will be required to submit one draft of the project at the end of Week 5, and the final completed project at the end of Week 7. Using the financial statements for Celgene Corporation and Gilead Sciences, Inc., respectively, you will calculate and compare the financial ratios listed further down this document for the fiscal year ending 2015, and prepare your comments about the two companies' performances based on your ratio calculations. The entire project will be graded by the instructor at the end of the final submission in Week 7, and one grade will be assigned for the entire project. Financial Statements Below is the link for the financial statements for Celgene Corporation for the fiscal year ending 2016. http://ir.celgene.com/sec.cfm?view=all (Links to an external site.)Links to an external site. When you arrive at this website, please do the following. First, under View, select Annual Filings using the drop-down arrow labeled All Filings and then select 2017, using the drop-down arrow labeled Year, You should select the 10k dated 2/10/2017 and choose to download in PDF, HTML, or Excel format. The PDF format is the best format for searching. Below is the link for the financial statements for Gilead Sciences, Inc. for the fiscal year ending 2015. http://investors.gilead.com/phoenix.zhtml?c=69964&p=irol-sec (Links to an external site.)Links to an external site. First, select 2017 under the Year filter using the drop-down arrow labeled All Years and then select Annual filings under the Groupings filter using the drop-down arrow labeled All Forms. Press the large Search button to access the requested annual filing for 2016. You should select the 10k dated 2/27/2017, and choose to download it in PDF, Word, or Excel format. The PDF format is the best format for searching. ANSWER the following 16 ratios and include formulas Earnings per Share of Common Stock Current Ratio Gross (Profit) Margin Percentage Rate of Return (Net Profit Margin) on Sales Inventory Turnover Days' Inventory Outstanding (DIO) Accounts Receivable Turnover Days' Sales Outstanding (DSO) Asset Turnover Rate of Return on Total Assets (ROA) Debt Ratio Times-Interest-Earned Ratio Dividend Yield [For the purposes of this ratio, use Yahoo Finance to look up current dividend per share and stock price; just note the date that you looked up this information.] Rate of Return on Common Stockholders' Equity (ROE) Free cash flow Price-Earnings Ratio (Multiple) [For the purpose of this ratio, look up the market price per share as of December 30, 2016 for Celgene Corporation and for Gilead Sciences, Inc..] Thank You!!

Answer 1

- Current Ratio = Current Assets / Current Liabilities

- Gross Profit Margin = Gross Profit / Sales = ( Total Revenues - Cost of Goods Sold) / Total Revenues

- Net Profit Margin = Net Income / Total Revenue

- Inventory Days = 365 / Inventory Turnover, Inventory Turnover = Cost of Goods Sold / Average Inventory

Average Inventory =( Ending Inventory 2015 + Ending Inventory 2016) / 2

Inventory Days = 365 * Average Inventory / Cost of Goods Sold

- Accounts Receivable Turnover Days = 365 / Average Accounts Receivable

Average Accounts Receivable =( Accounts Receivable 2015 + Accounts Receivable 2016) / 2

- Return on Assets = Net Income / Total Assets

- Debt Ratio = Total Liabilities / Total assets, (Total Assets - Total Equity ) / Total Assets

- Times-Interest-Earned Ratio = EBIT / Interest Expense or Income from Operations / Interest Expense

- Dividend Yield = Dividend per Share / Stock Price

Dividend 13-Dec-2016 = 0.47, Stock Price 30-Dec-2016 = 68.54

Dividend Yield = .47 / 68.54 = 0.686%

- Return on Shareholders Equity = Net Income / Total Shareholders Equity

- PE Ratio = Stock Price / EPS = 68.54 / 9.94 = 6.8954