Financial Statement Analysis Project — A
Comparative Analysis of Oracle Corporation and Microsoft Corporation

Here is the link for the financial statements for Oracle
Corporation for the fiscal year ending 2007. First, select 2007 using the
drop-down arrow labeled for Year on the right-hand side of the page, and then
select Annual Reports using the drop-down arrow labeled Filing Type on the
left-hand side of the page.

You should select the 10k dated 6/29/2007 and choose to download in
PDF, Word, or Excel format.

http://www.oracle.com/us/corporate/investor-relations/sec/index.html

Here is the link for the financial statements for Microsoft
Corporation for the fiscal year ending 2007. You should select the Annual
report dated 8/3/2007 and choose to download in Word or Excel format.

http://www.microsoft.com/investor/SEC/default.aspx?year=2007

A sample Project template is available for download in Doc
Sharing. The sample project compares the ratio performance of Tootsie Roll and
Hershey using the 2007 financial statements of Tootsie Roll and Hershey
provided in Appendix A and Appendix B of your textbook.


Description

This course contains a course project where you will be required
to submit one draft of the project at the end of Week 5 and the final completed
project at the end of Week 7. Using the financial statements for Oracle
Corporation and Microsoft Corporation, respectively, you will calculate and
compare the financial ratios listed further down this document for the fiscal year ending 2007 and
prepare your comments about the liquidity, solvency and profitability of the
two companies based on your ratio calculations.The entire project will be graded by the instructor at the end of
the final submission in week 7 and one grade will be assigned for the entire
project.

Overall Requirements

For the Final Submission:

Your final Excel workbook submission should contain the following.
You cannot use any other software but Excel to complete this Project.

  1. A completed worksheet title
    page tab which is really a cover sheet with your name, my name, the class
    name, and the date.
  2. A completed worksheet profiles
    tab which contains a one paragraph description regarding each company with
    information about their history, what products they sell, where they are
    located etc.
  3. All 18 ratios for each company
    with the supporting calculations and commentary on your worksheet ratio
    tab. Supporting calculations must be shown either as a formula or as text
    typed into a different cell. The ratios are listed further down this
    document. Your comments for each ratio should include more than just a
    definition of the ratio. You should focus on interpreting each ratio
    number for each company and support your comments with the numbers found
    in the ratios.
  4. The Summary and Conclusions
    worksheet tab which is an overall comparison of how each company compares
    in terms of the major category of ratios (Liquidity, Profitability, and
    Solvency).
  5. The Bibliography worksheet tab
    must contain at least your textbook as a reference. Any other information
    you use to profile the companies should also be cited as a reference.

Required Ratios for Final
Project Submission:

  1. Earnings per Share
  2. Current Ratio
  3. Gross Profit Rate
  4. Profit Margin Ratio
  5. Inventory Turnover Ratio
  6. Days in Inventory
  7. Receivables Turnover Ratio
  8. Average Collection Period
  9. Asset Turnover Ratio
  10. Return on Assets Ratio
  11. Debt to Total Assets Ratio
  12. Times Interest Earned Ratio
  13. Payout ratio
  14. Return on Common Stockholders’
    Equity Ratio
  15. Free Cash Flow
  16. Current Cash Debt Coverage
    Ratio
  17. Cash Debt Coverage Ratio
  18. Price/Earnings Ratio [For the
    purpose of this ratio, use the market price per share on June 1, 2007 for
    each company]

The Excel files uploaded to the Dropbox should not include any
unnecessary numbers or information (such as previous years’ ratios, ratios that
were not specifically asked for in the project, etc.).

Please upload your final submission to the Dropbox by the end of Week 7. See Syllabus/”Due
Dates for Assignments & Exams” for due date information.

For the Draft:

Create an Excel spreadsheet or use the Project template to show
your computations for the first 12 ratios listed above. The more you can
complete regarding the other requirements the closer you will be to completion
when Week 7 arrives. Supporting calculations must be shown either as a formula
or as text typed into a different cell. If you plan on creating your own
spreadsheet, please follow the format provided in the Tootsie Roll and Hershey
template file.

Please upload your draft submission to the Dropbox by theend of Week 5. See Syllabus/”Due
Dates for Assignments & Exams” for due date information.

Other Helpful Information:

If you feel uncomfortable with Excel, you can find many helpful
references on Excel by performing a Google search.

The Appendix to Chapter 13 contains ratio calculations and
comparison comments related to Kellogg and General Mills so you will likely
find this information helpful.

Either APA or MLA style can be used to complete the references on
your Bibliography tab. There are tutorials for APA and MLA style within the
syllabus.

Grade Information

The entire project will be
graded by the instructor at the end of the final submission in week 7 and one
grade will be assigned for the entire project.
The
project will count for 18% of your overall course grade.

Category

Points

%

Description

Documentation
& Formatting

9

5%

The report will be submitted in the form of an Excel Workbook,
with each page (worksheet) of the workbook named appropriately.Please do not use any other software (such
as MS Works or Lotus) to complete the project.
A
quality report will include a title worksheet tab, a worksheet tab for the
profile of the two companies, a worksheet tab for the ratio calculations and
comments, a worksheet tab for the Summary and Conclusion, proper citations if
applicable, and a bibliography worksheet tab for the references.

Organization
& Cohesiveness

9

5%

A quality report will include the content
described above in the documentation and formatting section. The ratios
should be listed in the same order in which they appear in the project
information above.

Editing

18

10%

A quality report will be free of any spelling,
punctuation, or grammatical errors. Sentences and paragraphs will be clear,
concise, and factually correct.Ratios will be expressed as numbers or percentages, depending on
what is appropriate, as is shown in the textbook.
Note that not all ratios are shown as percentages. Two decimal
places is sufficient for each of the ratios.

Content

144

80%

A quality report will have correct ratio
calculations and accurate supporting commentary. Any assumptions, if made, should
be spelled out clearly. Supporting calculations must be shown either as a
formula or as text typed into a different cell.

Total

180

100%

A quality report will meet or exceed all of
the above requirements.