Ratio Analysis and Comparison for Exxon Mobil Corporation and Royal Dutch Shell plc

Ratio Analysis and Comparison for Exxon Mobil Corporation and Royal Dutch Shell plc in $15 Only
1) Need to choose two firms within the same industryRatio Analysis and Comparison

 

2) Go to each firm’s Web site, and then access and download their annual reports (financial statements).

3) Using the accounting data from the firms’ financial statements, calculate all ratios for each firm (liquidity ratios, activity ratios, profitability ratios, leverage ratios, and coverage ratio)

Liquidity Ratios

Current Ratio = Current Assets/Current Liabilities

Quick Ratio = Current Assets – Inventory/Current Liabilities

Activity Ratios

Inventory Turnover = Sales/Average Inventory

Receivable Turnover = Annual Credit Sales(or Annual Sales)/Accounts Receivable

Average Collection period = Receivables/Sales per Day

Fixed Asset Turnover = Sales/Fixed Assets

Total Asset Turnover = Sales/Total Assets

Profitability Ratios

Operating Profit Margin = Earnings before interest and taxes/Sales

Net Profit Margin = Earnings after interest and taxes/Sales

Gross Profit Margin = Revenues – Cost of goods sold/ Sales

Return on total assets = Earnings after interest and taxes/Total assets

Return on equity = Earning after interest and taxes/Equity

Basic earning power = EBIT (Earnings before interest and taxes)/Total assets

Leverage Ratios

Debt/net worth ratio = Debt/Equity

Debt Ratio = Debt/Total Assets

Debt Ratio = Long-term debt/Total assets

Coverage Ratios

Times-interest-earned = Earnings before interest and taxes/Annual interest charges

4) Analyze and compare your calculations for the two firms.

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