complete project details attached
Instructions
This project consists of two sections. In section 1, you are required to calculate ratios of General Motors Company (hereafter, GM) and Tesla Inc. (hereafter, Tesla) for year ended Dec 31, 2024. Present all your calculations and results in the templates provided below on pages 3-4. Ratios should be calculated according to the provided ratio definitions document (not the textbook).
In section 2, you are required to make investment and lending decisions between the two companies based on the calculated ratios. To complete this part, go directly go to page 5 of this file and answer the questions.
Complete your work in the provided template.
Section 1 (round your answers to two decimal places, e.g. 12.34%, 12.34)
GM Detailed Ratio Calculations 2024
Sample Calculation (Delete this highlighted sample calculation before submission)
| Gross profit margin (example) | Gross Profit = 2,585,637 – 1,891,506 = 694,131 Gross profit percentage = 694,131 / 2,585,637 | 26.85% |
| Gross profit margin | | |
| Profit margin | | |
| Return on assets (ROA) | | |
| Return on equity (ROE) | | |
| Basic earnings per share | | |
| Asset turnover | | |
| Price-earnings ratio | | |
| Dividend yield | | |
| Current ratio | | |
| Receivable turnover | | |
| Inventory turnover | | |
| Debt to total assets | | |
| Times interest earned | | |
TESLA Detailed Ratio Calculations 2024
| Gross profit margin | ||
| Profit margin | ||
| Return on assets (ROA) | ||
| Return on equity (ROE) | ||
| Basic earnings per share | ||
| Asset turnover | ||
| Price-earnings ratio | ||
| Dividend yield | ||
| Current ratio | | |
| Receivable turnover | ||
| Inventory turnover | ||
| Debt to total assets | ||
| Times interest earned |
Section 2
Assume that your group is comparing the shares of GM and Tesla as a potential equity investment. Using the profitability ratios you calculated in section 1, which company’s share would you recommend buying? Explain why. (Limit your answers to 3 sentences and 60 words).
Assume that your group is comparing the corporate bonds issued by GM and the corporate bonds issued by Tesla as a potential debt investment. For both companies, their corporate bonds will be matured in five years. Based on current ratio and debt to total assets (leverage) that you calculated in section 1, which company’s corporate bonds would you recommend purchasing? Explain why. (Limit your answers to 3 sentences and 60 words).
