As promised, here are some notes/ hints to help you with the


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need assistance with an Accounting Financial Course Project. The assignment has instructions for a draft. please ignore those instructions. It needs to be in an excel worksheet. Enclosed instructions from class and the Professor hints instructions. A message was sent on PE ratio for Oracle is 05/30/2011 not 05/31/2011. Thanks Additional Requirements Min Pages: 5 Other Requirements: This is an excel worksheet Accounting_Financial_Course_Project_.docx As promised, here are some notes/ hints to help you with the final project. This is not due until week 8, but please do not wait until the last minute to start it. Please let me know if you have any questions. Hello everyone. Here are some "hints" I put together for everyone to take a look at: EPS is given for each in the income statement. Use basic, not diluted. The current ratio should be straight forward. Current assets/ current liabilities The gross profit rate you have to take sales – COGS to calculate GP and then divide by net sales. (GROSS PROFIT IS NOT GIVEN, SO YOU HAVE TO CALCULATE IT AS FOLLOWS – for Microsoft is it called cost of revenue (so revenue -cost of revenue) and for oracle it is revenues – software license updates, hardware systems products, hardware systems support, and services. So Oracle includes 4 items in COGS(you do not have to do the BI + Purchases – EI calculation) Profit margin ratio should be straight forward. NI/ Net sales Inventory TO – use the COGS you used in GP rate and divide by average inventory (both years added and /2) Days in inventory is straight forward- take 365/ Inventory TO Receivables turnover – assume all sales are on credit (so use net sales or total revenues) and divide by average AR (both years added and /2) The average collection period should be straight forward. Take 365/ receivables TO Asset turn over is straight forward – use net sales or revenues / average TOTAL assets (add both years and / 2) Return on assets- straight forward – it is net income / average total assets you used above Debt to total assets – straight forward it uses total liabilities/ total assets (not an average) Times interest earned – it is net income + interest expense + tax expense/ interest expense Tax expense is provision for taxes on Oracle and Microsofts’ income statements Oracle gives interest expense on the income statement Microsoft gives other income and expenses, however per the footnote only 295 is related to interest The payout ratio takes dividends from the cash flow statement (payments of dividends to borrowers on oracle and CS cash dividends paid on Microsoft) and divides by NET INCOME Return on common stockholders equity — straightforward – take net income (there are no preferred dividends to subtract) and divide by average common stock equity (total equity added together for both years / 2) Free cash flow – cash from operations from the cash flow statement – capital expenditures from the cash flow statement for oracle and additions to PPE on Microsoft – dividends from the payout ratio section for each respectively Current cash debt coverage – straightforward cash from operations / average current liabilities (both years added together/ 2) Cash debt coverage – straightforward – cash from operations / average total liabilities (both years added together/ 2) PE ratio You have to get the stock price from the internet go to yahoo.finance.com enter the company name in the left hand box (Microsoft or Oracle), enter then click on get historical quotes enter the date of the stock in both date columns Oracle is 5/31/2011 …. and Microsoft is 6/30/2011. If the day falls on a Sunday you have to enter the day before. Get the data and look for close price, not adjusted close Then do the same for the other company Divide this stock price by the EPS from #1 (use the EPS from requirement 1 above, not at a different point in time or the same time as these stock prices) This is an email the Professor sent af

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