Rowan University Sherwin Williams and Nippon Paint Financial Analysis Paper

International ratio comparisons are subject to a number of pitfalls.  Inter-country comparisons are complicated by differences in national accounting principles, foreign exchange rate fluctuations, differences in prices, etc. To understand how a company is doing it is also necessary to know the economic, social, business and legal environment in which it operates.

Select a large non-U.S. manufacturer company headquartered in a foreign country and a company in a similar industry in the U.S. You are to make an assessment as to which you feel is the “better” company and why. It will be necessary for you to adjust for significant differences in accounting principles, currency differences and fluctuations, and price differences.

You should also identify environmental variables, such as differences in social/cultural, financial and legal considerations that might further account for observed profitability and risk differences. Knowledge gained with regard to such environmental differences will sharpen your ability to properly evaluate the risk and return features of foreign security investments.

We choose Sherwin-Williams and Nippon Paint (in Japan).