Question

Below is the assignment that I need to do and having a hard time finding the correct ratios like Gross Margin, EBITD, Price to cash flow etc.. from SEC EDGAR. I am comparing CVS Health and Walgreens 2018. Below is the question similar to mine that I found on the website. I am trying to figure out where can I find those ratios?

MBA 520 Module Two Activity Guidelines and Rubric
Overview: For this task, you will analyze the financial health of two competitors in the same industry based on their ratios, using the provided Excel spreadsheet template. Then, you will complete your analysis by writing a short synopsis of your findings in the space below the analysis.
Prompt: Follow the steps below to analyze the financial health of two competitors. Use the Module Two Activity Template to complete this task.
Select two companies operating in the same industry (for example, Macy’s and Dillard’s). The companies have to be in the same business for the ratios to be valuable to your analysis. Then, complete the template, providing the following:
? Ratio Research: Use the template to analyze the selected ratios (profitability, financial strength, valuation, management effectiveness, dividends, and efficiency) for both of the competitors. To complete this part, you can reference the Morningstar website in the Module Two resources to obtain the ratios. You can also use the SEC EDGAR Company Filings resource from Module One to obtain the ratio from annual reports. Please note: The ratios have to be from the same time period (the same year for both competitors). For training on how to use Excel, visit the Hoonuit training site or search YouTube to find appropriate Excel training videos.
? Industry Ratios: To analyze ratios for the companies, you also need to obtain the ratios for the industry that the competitors operate in. Industry values for the ratios can be found in the index column. If no index value is available, put the five-year averages for both companies in the industry column and use these figures for the industry comparison of your ratio analysis.
? Ratio Analysis: Compare the two companies based on their ratios. Use the last column in the template to write in detail how each company is doing based on the ratios. Compare the company ratios to the industry and each other.
? Summary: This short write-up should be done directly in your Excel spreadsheet.
o What is a ratio analysis? Briefly explain in about one paragraph. Please quote your resource.
o Referring to the ratio analysis, in which company would you be willing to invest and why?
Note: This is a theoretical exercise. You should not be investing according to this analysis.

RATIOS	RETAIL	WALMART	TARGET	ANALYSIS
Profitability Ratios (%)
Gross Margin		25.37	25.82
EBITD Margin		9.31	8.19
Operating Margin		3.28	5.16
Pretax Margin		2.18	5.07
Effective Tax Rate		20.28	22.65
Financial Strength
Quick Ratio		0.2	0.3
Current Ratio		0.76	0.95
LT Debt to Equity		0.46	96.65
Total Debt to Equity		0.58	98.96
Interest Coverage		12.35
Valuation Ratios
P/E Ratio		26.94	14.71
Price to Sales (P/S)		0.52	0.6
Price to Book (P/B)		3.25	3.89
Price to Tangible Book		4.19	3.89
Price to Cash Flow		11.32
Price to Free Cash Flow		9.26	7.07
Management Effectiveness (%)		4.82	7.62
Return On Assets		8.41	11.81
Return On Investment		12.66	26.35
Return On Equity
Dividends
Dividend Yield		2.5	3.09
Payout Ratio			46.62
Efficiency
Revenue/Employee		227,429	208,345
Net Income/Employee		4,783	8,487
Receivable Turnover		90.45	85.67
Inventory Turnover		8.26	5.71

Asset Turnover

2.46

1.88

Summary

Referring to your ratio analysis above, in which company would you be willing to invest, and why?

Answer 1

Ratio analysis is a analysis that helps in gaining the insights into Company Financial performances in several important areas. Ratio analysis evaluate the information related to Liquidity, Operations efficiency and Profitability of the company. It is a quick source of information about an organisation as it is based upon financial statements.Ratio analysis is less useful to Corporate Insiders because they have more detailed information about the organisation data. The data retrieved from financial statements helps in accessing the company performance that whether it is Improving, deteriorating or to compare within an industry. Ratios are essentially whistle blowers as they draw attention towards the issue that needs attention from the management.

The key financial ratios needs to be taken into consideration while Investing are -

1. Earning per share - Basically the profit over last year divided by no of Common shares in market ( Higher the better)

2. P/E Ratio - showing how much stock investors are paying for each rupee of earning ( Higher the better)

3. P/S Ratio - price of company's stock against its annual sales, instead of earnings

4. Debt to equity - Total liabilities versus Shareholder's equity ( Lower the better)

5. Dividend yield - Annual dividend paid per share divided by current stock price

6. P/B Ratio - Comparing company stock's per share price to its Book value

7. Payout Ratio - showing how much profit goes out of dividend.

8. Current Ratio - Testing company liquidity ( Higher the better)

On the basis of above formulas and ratios, it will be wise to invest in Walmart since it has higher P/E ratio.