obtain financial statement data, calculate ratios, and perform a ratio analysis for The Clorox Company (CLX) and Ecolab Inc. (ECL).

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For the assignment, students are required to obtain financial statement data, calculate ratios, and perform a ratio analysis for The Clorox Company (CLX) and Ecolab Inc. (ECL). It should be uploaded as a word document on along with the EXCEL data and ratio calculations file.

The report should be typed (Times New Roman 12, double space), the tables should be filled using Times New Roman 10. The report should have the following parts

  • A title page with the title, Term Project and the student name below it. The title page should also include The Clorox Company vs. Ecolab Inc: A Comparative Ratio Analysis
  • A short history for each one of the companies (about one page) in your own words. They should also include a description of their industry and the economic outlook for the aforementioned. Student sources shouldbe the companies’ filings, reputable news sources. They should not include blogs. Plagiarizing will result in a zero grade.
  • The project should include an in-depth comparative ratio analysis through time and against the other company. The analysis should be based on the tables and graphs (at least 2-3 additional pages. When students analyze the ratios, they must explain to the reader the meaning of each ratio. They should analyze the trend of each ratio through time for each company and compare it to the trend of the other company’s corresponding ratio. Include events in the history of a company or the the economy in general that might explain why a ratio dropped or increased substantially and perform this justification for all ratios: best sources, 10-K forms, or Annual reports to shareholders or other filings by the companies.
  • A summary of the two companies’ performance.
  • The two tables and the ratio graphs. Students have the option to include the tables and graphs or portions of the tables within the analysis section of the text.
  • References (at least 10)- APA style of citation

The projects will be graded according to the following weighting scheme

  • 40 percent ratio accuracy
  • 40 percent in-depth ratio analysis
  • 20 percent language and professional appearance of the document

Both the word file and the excel file should be saved with the same name, and that name should be your last name followed by the first letter of your name.

Steps for part C

  • Using the data from WRDS, students must fill-in the two tables below. If there is no available data for the calculation of a ratio or the denominator of a ratio is zero, they should enter NA in the table for that company’s ratio. If the EPSPI is negative in a year for either one of the companies again, students should enter NA for the corresponding PE ratio. There is no meaning to a negative PE ratio. Accuracy should be four decimals for percentages or 2 decimals for numbers (i.e., in percentage format 14.32%, 5.11%, 3.00%, in number format, for days, for example,15.10). Where appropriately, they should express the ratio as, times (2.30). The format of each ratio appears in the tables. They should create graphs in excel for all ratios for the two companies, i. e. for each ratio, there should be a single graph showing the ratios of the two companies for years 2013-2018. They should use consistently the same colors for the ratios of each company in each of the graphs.
  • Based on the tables and graphs they should write an in-depth analysis (at least two to three pages – excluding tables, graphs, and references) that will compare the ratios for each company through time and against each other. Students must refer to significant events that affected each one of these ratios and in what way.
    • Quick ratio= (cash and short-term investments + receivables-total)/current liabilities-total
    • Cash Ratio= cash/current liabilities-total
    • Debt-to-equity ratio=liabilities-total/stockholder’s equity-parent
    • Days’ in receivables=365/ (revenue-total/receivables-total)
    • ROA=net income (loss)/assets-total
    • PM=net income (loss)/revenue-total
    • ROE=net income(loss)/stockholder’s equity-parent
    • PE ratio=price close-annual-fiscal/earnings per share (basic)-including extraordinary items= Very important: Exclude negative PE ratios, enter NA in such cases
    • Price-to-sales=price close-annual-fiscal / (revenue-total/(common shares outstanding*adjusECLent factor (company)-cumulative by ex-date)). Students must use the parentheses exactly as they are shown above.
    • For ratios with missing data enter NA

Formulas to be used for the ratio calculation


Table 1

Liquidity, financial leverage and asset utilization ratios for The Clorox Company (CLX) and Ecolab Inc. (ECL)

Fiscal

Year

CLXQuick

Ratio

(%)

ECL

Quick

Ratio

(%)

CLX

Cash

Ratio

(%)

ECL Cash

Ratio

(%)

CLX Debt to Equity Ratio

(x)

ECLDebt to Equity Ratio

(x)

CLXDays’ in Receivables

(days)

ECLDays’ in Receivables

(days)

CLXROA

(%)

ECLROA

(%)

2013

2014

2015

2016

2017

2018


Table 2

Profitability, and market value ratios for The Clorox Company (CLX) and Ecolab Inc. (ECL)

Fiscal

Year

CLX

Profit Margin Ratio

(%)

ECLProfit Margin Ratio

(%)

CLXROE

(%)

ECL

ROE

(%)

CLXP/E

Ratio

(x)

ECLP/E

Ratio

(x)

CLXPrice-to-Sales ratio

(x)

ECLPrice-to-Sales ratio

(x)

2013

2014

2015

2016

2017

2018

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