•Locate one publicly traded corporation that you believe is maximizing shareholder wealth. Using financial ratio analysis, justify why you believe the corporation is maximizing shareholder wealth.
•Locate one publicly traded corporation that you believe is not maximizing shareholder wealth. What is the market price of the stock of this corporation? How does it compare with the intrinsic value of the corporation? Justify why you believe the corporation is not maximizing shareholder wealth. Calculate and analyze the following thirteen financial ratios of the corporation and compare them to the appropriate industry average:
?Current ratio
?Quick ratio
?Cash ratio
?Total debt ratio
?Times interest earned ratio
?Cash coverage ratio
?Inventory turnover ratio
?Receivables turnover ratio
?Profit margin
?Return on assets
?Return on equity
?Price-earnings ratio
?Market-to-book ratio
-Create a plan of action to get the corporation back to where the corporation is maximizing shareholder wealth.
What do you anticipate will be the market price of the corporation’s stock if the corporation successfully implements your plan of action?
Analyzed and justified, using financial ratio analysis, why you believe the selected publicly traded organization is maximizing shareholder wealth.
Evaluated the market price of the stock of a publicly traded organization that is not maximizing shareholder wealth, compared it to the intrinsic value of the organization, and analyzed and justified, using financial ratio analysis, why the organization is not maximizing shareholder wealth.
Calculated and analyzed the following thirteen financial ratios of the corporation and compared them to the appropriate industry average:
•Current ratio
•Quick ratio
•Cash ratio
•Total debt ratio
•Times interest earned ratio
•Cash coverage ratio
•Inventory turnover ratio
•Receivables turnover ratio
•Profit margin
•Return on assets
•Return on equity
•Price-earnings ratio
•Market-to-book ratio
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