Part One: Company Analysis
The following is a summary of performance data of FedEx over a three-year period:
| (in millions) |
Year 1
|
Year 2
|
Year 3
|
| Sales |
34,734
|
39,304
|
42,680
|
| Cost of Goods Sold |
33,550
|
37,852
|
40,648
|
| Net Income |
1,184
|
1,452
|
2,032
|
| Assets |
25,654
|
27,385
|
29,903
|
| Total Debt |
11,695
|
10,498
|
13,926
|
| Equity |
15,654
|
15,220
|
14,727
|
| Operating Cash Flow |
1,998
|
2,378
|
3,186
|
| Investment Cash Flow |
-2,781
|
-3,419
|
-4,049
|
| Financing Cash Flow |
-692
|
-287
|
-244
|
Required:
Given the information in the table above, calculate the following:
- Profit margin on sales
- Return on assets
- Return on equity
- Total debt to total assets
- Total asset turnover
Explain and evaluate your results as they pertain to profitability, debt, and asset turnover for the company over a three-year period.
Part Two: Issues and Interests of Investors and Other Stakeholders; Analysis of Company Performance
Required:
- Identify two items or issues that cannot be derived from the financial statements of the two companies that you selected for your research. Explain why these items or issues would be of concern to investors and other stakeholders. In your rationale, address the specific interests of the different users of financial statements.
- Compare and contrast the two companies in terms of how well or how poorly they are performing in the areas of profit, debt, and asset turnover. Use appropriate ratios in your analysis. Indicate strategies for possible improvement in each area.
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