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FI504 Course Project Part 1

The document compares financial ratios for Oracle and Microsoft. It analyzes key metrics like earnings per share, current ratios, gross profit rates, profit margins, inventory turnover rates, and days in inventory. Microsoft has a higher EPS, better profit margins, and was able to turn its inventory into sales more frequently than Oracle. Both companies have current ratios above 1, indicating they can repay short-term debts. The document interprets these ratios to compare the two companies' profitability and working capital management.

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Andrea Stricker
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4K views1 page

FI504 Course Project Part 1

The document compares financial ratios for Oracle and Microsoft. It analyzes key metrics like earnings per share, current ratios, gross profit rates, profit margins, inventory turnover rates, and days in inventory. Microsoft has a higher EPS, better profit margins, and was able to turn its inventory into sales more frequently than Oracle. Both companies have current ratios above 1, indicating they can repay short-term debts. The document interprets these ratios to compare the two companies' profitability and working capital management.

Uploaded by

Andrea Stricker
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Oracle Corporation Ratios Given Earnings Per Share Given Current Assets Current Ratio Current Liabilities Gross

Profit Amount Gross Profit Rate Net Sales Net Income Profit Margin Ratio Net Sales Inventory Turnover Ratio CoGS Average Inventory 365 Days Days in Inventory Inventory Turnover $ $ 365 = #DIV/0! $17,996 $3,349 = #DIV/0! $17,996 $4,274 = 23.75% $9,387 $14,647 = 81.39% $12,883 = 1.37 = 0.83

Microsoft Corporation Ratios = $40,168 = $23,754 $40,429 = $51,122 $14,065 = $51,122 $10,693 = $1,920 365 = 5.57 65.53 5.57 27.51% 79.08% 1.69 1.44

Interpretation and Comparison Between The Two Companies' Ratios EPS indicates the company's profit allocated to each outstanding share of common stock. This means Microsoft gives more per share to its stock holders than Oracles does. The ability to repay back short term debt; because both ratios are above 1 it means that each company is we suited to paying back its short term obligations. We can interpret these figures to mean that for every $1 Oracle has 81cents left over and Microsfot has 79cents that can be used for future investments. Oracle has a 23% of its sales contribute to its income while we can see that Microsoft has a healthier amount of 27% of its sales contribute to its own income. While no exact data exists for Oracle we can see that Microsofts inventory was pushed out and sold 5.5 times per sales figures.

Again we lack proper Oracle data to comment, but we can see that Microsofts products take about 66 days for them to be a sale to the company.

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