Explore BrainMass
Share

Hi,
I need some help with solving a probability ratio for 2 different companies
www.wachovia.com - http://www.wachovia.com/file/WB1Q08_QER.pdf
and www.newcenturybanknc.com

I don't understand how to read and decipher the financial statements.

Can someone help me?

Review the following scenario:
The CEO of your firm has asked that you to compare the firm you are thinking of acquiring with one of its competitors. Obtain the financial statements for both the firm under investigation and one of its competitors and perform the following tasks.
comparing the companies two most recent fiscal years based upon the following:
a. Profitability Ratios
b. Management Efficiency Ratios
c. Leverage Ratios

#### Solution Preview

To address the problem, I needed to find the 2007 annual report of each company.
Wachovia - http://thomson.mobular.net/thomson/7/2550/2995/
New Century Bank - http://www.newcenturybanknc.com/pdf/NCB_06_Annual_Report_FINAL.pdf

I looked at the required ratios and chose two of each.

Profitability ratios: Two very popular profitability ratios are Profit Margin and Return on Assets (ROA).
Profit Margin measures the profit earned from each dollar of sales. The formula is Net income divided by Sales ROA measures the profit generated by each dollar of asset. The formula is ...

#### Solution Summary

a. Profitability Ratios
b. Management Efficiency Ratios
c. Leverage Ratios

\$2.19