HA206_M3_Ratio Analysis

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Brookline College, Phoenix *

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206

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Finance

Date

Jan 9, 2024

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docx

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HA206 Module 3: Ratio Analysis Directions: Complete the table below. 1. Calculate the ratios for Johnson & Johnson and Pfizer Inc. To do this, you will need to search online to locate the latest 2 annual financial statements for these companies (don’t use the TTM one). Copy and paste the URL for the financial statements in the box under the company name. See the example worksheet for guidance. a. Please note that for most ratios, you will only need to use the latest annual financial statement, but for some you may need to calculate the average which will require using the latest 2. b. Be sure to show your work. c. You can assume that preferred dividends are 0 for any calculations even if they are not actually 0. 2. For each ratio, note which one of the companies has the better ratio and why it is better. 3. Paste a screenshot of the price for each company at the end of the worksheet. Johnson & Johnson (JNJ) Johnson & Johnson (JNJ) Income Statement - Yahoo Finance Pfizer Inc. (PFE) Pfizer Inc. (PFE) Stock Price, News, Quote & History - Yahoo Finance Which company’s ratio is better and why? Working Capital Ratio (WCR) Current assets: 187,278,000 Current Liabilities: 110,574,000 WCR=1.69 Current assets: 197,205,000 Current Liabilities: 101,289,000 WCR=1.95 Pfizer ratio is better because it is higher meaning more assets to pay off any liabilities. Earnings Per Share (EPS) EPS: 6.86 EPS:5.59 J&J ratio is better. Making higher earnings per share Price-Earnings Ratio (P/E) Price: 156.10 EPS: 6.86 Price: 28.64 EPS: 5.59 Pfizer is better due to higher ratio on price/earnings per share
P/E: 4.17 P/E: 5.12 Return on Equity (ROE) Net income: 17,941,000/ Stock holders equity76,804,000= 0.23 Net income: 31,372,000 Stockholders Equity: 95,661,000 0.32 Pfizer is better due to higher return Operating Margin Operating Income: 23,703,000 Revenue: 94,943,000 0.25 Operating Income: 37,272,000 Revenue: 100,330,000 0.37 J&j is better due to lower ratio of operating income/revenue Debt-to-Assets Total debt: 39,659,000 Total asset: 187,378,000 =0.21 Total debt: 34,870,000 Total asset: 197,205,000 =0.17 Pfizer is better due to having a lower ratio for debt Inventory Turnover Cost of Revenue: 38,089,000 Missing other half? Could not find info needed. Cost of revenue: 34,344,000 Missing other half? Could not find info needed. Operating Cash Flow Ratio Operating Cash Flow: 21,194,000 Current Liabilities: 55,802,000 0.38 Operating Cash Flow: 29,267,000 Current Liabilities: 42,138,000 0.69 Pfizer Ratio is better due to it being higher meaning it is in better position for liquidity and lower risk of default Asset Turnover Sales: Net assets: Sales: Net assets: Days Sales in Inventory Info not found on site? Info not found on site?
Return on Assets Info not found on site? Info not found on site? Price Screenshot:
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