Complete the following financial data and analysis based on latest annual data a

Question

Complete the following financial data and analysis based on latest annual data available (probably 2016) from Form 10K or Annual Report for Netlix , Microsoft or Google:

Profitability (GM, ROA, ROE, ROIC, and ROR: Activity Ratios (Inventory turnover, Total asset turnover, Cash turnover)); Leverage Ratios (Debt to equity, LT Debt to equity, Financial leverage index); Liquidity (Operating cash flow); and Market Ratios (Book value/share, PE ratio)

Additionally calculate last four year growth in revenue and earnings (cagr).

What is Moody's Bond Rating?

Is the company in a strong financial position - why/why not? Is it investing for future (R&D etc)?

Is the company positioned fro growth - why/why not? Are their opportunities to pursue in order to grow the company? Can the company grow organically?

Which is a better indicator of the health of the company - financial information or market valuation? Why?

Explanation / Answer

ROE= net income/shareholder's equity

= 1043/4365 = 23.89%

ROA= net income/ average total assets

= 1043/((22947+23148)/2)

= 4.53%

Profit margin = net income/ revenue

= 1043/18205

= 5.73%

Asset turnover = sale revenue/ total assets

= 18205/22947

= 79.33%

Financial leverage = Debt/(Debt+equity)

= 8627/(8627+4365)

= .66

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