Regarding the book of Barry Elliot “Financial Accounting, Reporting and Analysis”, ratio analysis identifies and highlights areas of good and bad performance and areas of significant change. Essentially, it is a tool for investigating and comparing relationships between different pieces of financial information. In our analysis, we examine the following five key areas: profitability, efficiency, liquidity, capital structure and investment. We examine those ratios, taking into consideration financial statement values concerning Constellation Brands Inc. and its competitor Brown-Forman Corporation. This analysis includes some indicative ratios for each area and taking into consideration the financial statements for fiscal years 2016 (2/2015-2/2016) and 2017 (2/2016-2/2017) for our company and 2016(4/2015-4/2016) and 2017 (4/2016-4/2017) for the competitor.ProfitabilityProfitability ratios show the company’s overall performance and efficiency. Profitability ratios are categorized in two types: margins and returns. Margin ratios represent the company’s ability to convert sales into profits at different measurement stages. Return ratios represent the company’s ability to measure overall business performance to generate returns for its shareholders.In the table above are presented five main profitability ratios of our company and our competitor company that could provide potential investors an adequate view of the company. Firstly, we can see that all the Constellation’s ratios indicate an increase from 2016 to 2017. Net Profit Margin ratio expressed as a percentage that shows how much of each dollar collected by our company as revenue converted into profit (after having deducted operating expenses, interest expense and taxes). This ratio indicates an increase from 16.11% to 20.11%. Additional ratios that represent a company’s profitability are: the gross margin ratio, ROCE, return on asset ratio and return on equity ratio. The growth of these four ratios is 7.14%, 25.56%, 31.16% and 33.37% respectively. On the other side, for the Brown-Forman Corporation, we notice a reduction to each one of the profitability ratio. Apart from the Gross Margin, the reduction to all the other ratios are more than 25% compared to the previous year, being close to 40% both for ROCE and Return on Assets. Thus, we come to the conclusion that Constellation’s profitability presents an upward trend in comparison with the competitors’ ratios that are higher, but they are experiencing a significant drop.Efficiency ratios measure how well a company use its assets and liabilities to generate sales. According to Barry Elliot, the first three indices in the table below are informative for understanding and interpreting financial statements. The remaining ratios below the line indicate information about the amount of time needed to sell inventory, the amount of time needed to collect receivables, and the length of time needed to pay its suppliers. Firstly, we can see that the receivable turnover ratio and inventory turnover ratio depict a slight increase for Constellation from 2016 to 2017. On the other hand, the payables turnover ratio presents a decrease from 10.16 to 7.98 for the same period. As for its competitor, receivables and payables turnover ratios are almost the same between the last two years while the inventory turnover declines at 10.64%. As we can see Constellation can turn inventories into cash twice faster than its competitor, since the days of inventory are 183, which are almost the half of Brown-Forman’s 435 days. This stems from the fact that the competing company trades products with a fairly high maturity. Additionally, as we can see Constellation collects its receivables twice faster than the Brown-Forman which is a good point for the liquidity of Constellation. The bottom line among the companies under investigation is that Constellation’s cash cycle is 173 days, while Brown-Forman’s is 454 days that could be translated as Constellation’s ability to face potential future liquidity issues.Liquidity ratios are the ratios that measure the ability of a company to meet its short-term debt obligations. These ratios measure the ability of a company to pay off its short-term liabilities when they fall. Firstly, we can notice that two out of three ratios are down to 1 which is a bad indication for our company’s financial health. Moreover an additional negative indication is the reduction of the current ratio from 1.31 to 1.20. Current ratio depict the firm’s current debt in terms of current assets. Regarding the quick ratio, we observe that Constellation Brand Inc. has a ratio lower than 1 (both for 2016 and 2017), meaning that average current liabilities are greater than current quick assets which again indicates potential liquidity problems. The reduction to both ratios comes from the fact that the increase in total current liabilities was higher than the increase in both cash and current assets .The same ratios