Use data from the Standard & Poor's Market Insight Database at www.mhhe.com/edumarketinsight to answer the following questions.

1. Use Market Insight to find information about Vulcan Materials Company (VMC), Southwest Airlines (LUV), Honda Motor Company (HMC), Nordstrom, Inc. (JWN), and Abbott Laboratories (ABT). Use the Excel Analytics section to find the most recent Income Statement and Balance Sheet.
1. Calculate the Operating Profit Margin (Operating Profit/Sales) and the Asset Turnover (Sales/Assets) for each firm.
2. Calculate the Return on Assets directly (ROA = Operating Profit/Total Assets) and then confirm it by calculating ROA = Operating Margin × Asset Turnover.
3. In what industries do these firms operate? Do the ratios make sense when you consider the industry types?
4. For the firms that have relatively low ROAs, does the source of the problem seem to be the Operating Profit Margin, the Asset Turnover, or both?
5. Calculate the return on equity (ROE = Net Income/Equity) for each firm. For the two firms with the lowest ROEs, perform a DuPont analysis to isolate the source(s) of the problem.
2. Select the Industry tab and choose the Home Furnishing industry. In the Compustat Reports section, click on the link to get a list of the subindustry constituents. Pick two companies from the list and do the following for each firm.
1. Retrieve the latest annual Balance Sheet from the Excel Analytics section. Save it to your disk so you will be able to manipulate it and do calculations. Insert a column to the right of the last fiscal year's numbers. Calculate the common-size percentages for the Balance Sheet in the new column.
2. Compare the firms' investments in accounts receivable, inventory, and net plant, property, and equipment. Which firm has more invested in these items on a percentage basis?
3. Compare the firms' investments in current liabilities and long-term liabilities. Does one firm have a significantly higher burden in either of these areas?
4. Analyze the firms' capital structures by examining the debt ratios and the percentages of preferred and common equity. How much do the firms' capital structures differ from each other?
3. Enter the Market Insight database and link to Company, then Population. Select a company of interest to you and link to its Annual Cash Flow Statement in the Excel Analytics section. Answer the following questions about the firm's cash flow activities.
1. Did the firm have positive or negative cash flow from operations?
2. Did the firm invest in or sell off long-term investments?
3. What were the major sources of financing for the firm?
4. What was the net change in cash?
5. Did exchange rates have any effect on the firm's cash flows?

Now follow the link to the Annual Ratio Report and answer these questions:

6. How liquid is the firm?
7. How well is the firm using its assets?
8. How effectively is the firm using leverage?
9. Is the firm profitable?