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Analyze the Financial Statements for 2 US Companies

Choose 2 US companies. Go to the Web sites for both companies and find their financial statements for the last 2 years. Explain the differences in the financial statements for the two companies.

1) What accounts are found on one set of financial statements that are not found on the other set?
2) Compare and contrast the capital structure of the two companies.
3) When evaluating the financial statements of the same company, identify and analyze what happened to that company for the 2-year period being compared.
a) If there was an increase or decrease in an account,
b) what happened in the company to cause the change? For example, if the company's profit increased during the period,
c) what happened in the company to cause this increase?

Evaluate the two company's financial statements. Do not use ratio analysis when you evaluate these company's financial statements

Solution Preview

Analyze financial statements for 2 US companies and answer the following questions.
Choose 2 US companies, one in the manufacturing industry and one in the service industry. Go to the Web sites for both companies and find their financial statements for the last 2 years. Explain the differences in the financial statements for the two companies.
I have taken two companies of same industry:
Polo Ralph Lauren and True Religion.

1) What accounts are found on one set of financial statements that are not found on the other set?
All the final accounts are there in each of the company. This includes Balance sheet, Income statement, Cash flow statement and stockholder's equity.

2) Compare and contrast the capital structure of the two companies.
Capital structure of Polo Ralph
In $000' 2010 2009 2008
Liabilities
Current Liabilities
Accounts Payable 747,300 674,100 652,100
Short/Current Long Term Debt - - 206,400
Other Current Liabilities - 45,900 50,100

Total Current Liabilities 747,300 674,100 908,600
Long Term Debt 282,100 406,400 546,000
Other Liabilities 502,900 540,900 234,600
Deferred Long Term ...

Solution Summary

This solution helps in analyzing financial statements for Polo Ralph Lauren and True Religion.

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