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Annual Report Analysis Dow & Basf

In: Business and Management

Submitted By OMARFAHMY
Words 6002
Pages 25
The American University in Cairo
School of Business
Department of Accounting

ACCT 5201
Financial Reporting & Analysis

Annual Report Analysis
The DOW Chemical Company
BASF Chemical Company

Contents A. Market Analysis and Company Overview 3
i. The Chemical Industry Overview 3 ii. Companies Overview 7 iii. Competitive Landscape 8 iv. Porter’s Five Forces Analysis 8
v. Corporate Governance 9 vi. Business Strategy 10 vii. SWOT Analysis 10 B. Financial Analysis 11
1. Horizontal Analysis 11 2. Vertical Analysis 11
3. Financial Ratios 16 A. Liquidity 16 i. Current Ratio 16 ii. Acid-Test Ratio 16 B. Activity Measures 17 i. Accounts Receivable Turnover 17 ii. Inventory Turnover 17 iii.Fixed Asset Turnover 17 C. Profitability Measures 18 i. Gross Profit Margin 18 ii. Operating Profit Margin 18 iii. Net Profit Margin 18 iv. Return on Equity (ROE) 19 D. Debt, Financial Leverage, Capital Structure 19 i. Debt Ratio 19 ii. Debt/Equity Ratio 20 iii. Dividend Payout Ratio 20 iv. Price / Earnings Ratio 21
4. Further Findings 21 i. Notes on BASF Income Statement 21 ii. Notes on Balance Sheet 22 C. Conclusion 22 A. Market Analysis and Company Overview i. The Chemical Industry Overview

The chemical industry creates an immense variety of products which impinge on virtually every aspect of our lives. While many of the products from the industry, such as detergents, soaps and perfumes, are purchased directly by the consumer, 70% of chemicals manufactured are used as raw materials to make products by other industries including other branches of the chemical industry itself.
The industry uses a wide range of raw materials, from air and minerals to oil. With increasing competition worldwide, innovation remains crucial in finding new ways for the industry to satisfy its increasingly sophisticated, demanding and

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