Appendix for Assignment 5

# Appendix for Assignment 5 - Appendix A Calculate or...

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Appendix A Calculate or identify from each company’s most recent annual report the six (6) specific financial ratios listed and provide as an appendix to the paper. Ratio Microsoft Corporation Google Inc. Liquidity measurement ratio: Current ratio: Equals the current assets divided by current liabilities. 2.60 4.16 Indicator ratios: Return on assets: Equals net income divided by total assets. 23.77 17.30 Return on equity: Net profit/income divided by average owners’ equity. 44.84 20.68 Debt ratio: Debt ratio: Total liabilities divided by total assets. 47.49% 20.07% Operating performance ratio: Fixed asset turnover ratio: Equals net sales divided by net property, plan, and equipment. 39.31 35.40 Cash flow indicator ratio: Dividend payout ratio: Equals yearly dividend per share divided by earnings per share or equivalently dividends divided by net income. Investment valuation ratio: Price / Earnings ratio: Equals market value per share divided by earnings per share. 9.29 (with extraordinary items) 22.32 (with extraordinary items) Based on information provided by: http://www.google.com/finance? and

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http://www.marketwatch.com/investing/stock/msft/profile for Microsoft Corporation and http://www.google.com/finance?fstype=bi&cid=694653# for Google Inc. What Does Price-Earnings Ratio - P/E Ratio Mean? A valuation ratio of a company's current share price compared to its per-share earnings. Calculated as: Market Value per Share Earnings per Share (EPS) For example, if a company is currently trading at \$43 a share and earnings over the last 12 months were \$1.95 per share, the P/E ratio for the stock would be 22.05 (\$43/\$1.95). EPS is usually from the last four quarters (trailing P/E), but sometimes it can be taken from the estimates
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Appendix for Assignment 5 - Appendix A Calculate or...

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