# PART 1This Portfolio Project has two parts Calculations due

PART 1This Portfolio Project has two parts: Calculations due for Part 1 and a 4- to 6-page essay. While the calculation requirements of this assignment are important, equally important are your discussion and analysis of the quantitative results. You will submit two documents: 1) a spreadsheet containing your horizontal and vertical analysis and ratios for part 1. Then also a word document containing your essay. For this assignment you will select to work on both Polaris and Arctic Cat. Access each firm’s financial statements for fiscal years ending after December 31, 2014, from the firm’s website (Polaris.com & Arcticcat.com) or the SEC database (www.sec.gov). Use the most current 10K statements available on SEC or annual statements in Yahoo Finance. Complete the following for both firms (Polaris and Artic Cat) in an Excel spreadsheet:SHOW YOUR WORK AND STATE WHICH EQAUTION IS BEING USEDHorizontal and vertical analysis of the income statements for the past two years (all yearly balances set as a percentage of total revenues for that year) for both firms.Horizontal and vertical analysis of the balance sheets for the past two years (all yearly balances set as a percentage of total assets for that year) for both firms.Ratio analysis (eight ratios of your choosing) for the past two years PLUS a measurement for the creditworthiness of both firms as measured by Altman’s Z-score. Much of this course has concentrated on learning the financial statements, primarily because there was not an accounting prerequisite. Because of this concentration, you may find this assignment challenging. However, if you understand the financial statements, then the horizontal and vertical analysis should be rather intuitive. For example, if you see sales rise by 20%, then shouldn’t you also see net income rise by 20% or more if the managers are effective at controlling costs? If you see sales rise by 20% and assets rise by 40%, you have to ask why this is happening. It would appear that assets have risen too far given the sales that are generated from those assets—why did this occur? You may have to research that type of question and discuss it in your analysis. Your instructor suggests that you start your ratio analysis with the four ratios found in the DuPont equation. If you discover a weakness in one component of the DuPont ratios, then it would make sense to look at ratios that are closely related to the troublesome ratio. For example, if you discover that the asset turnover is declining over time, then take a look at some related ratios such as the inventory turnover rate or the average collection period. If you discover that the equity multiplier is increasing (indicating greater reliance on debt), then look at some related ratios such as the debt ratio or times interest earned. PART 2In Part 1, you submitted your spreadsheet. For this module, you will take what you submitted in your spreadsheet, and use that information to write your paper.Directions:Your paper must:Be 4-6 pages in length.Include a proper introduction and conclusion.Include a reference page.Provide a comparative analysis of the financial health of both firms. Your paper should provide your reader with an overall understanding of the financial health of the companies including the following:Discussion of the ratio analysis results, including rationale for the ratios chosen.Discussion of all horizontal and vertical analysis from above.Discussion of four items from the management discussion of the firm that support the conclusion formed in your discussion of the financial results.