Assessing a company's financial position can be done by examining its profitability or its ability to meet its long-term commitments. These metrics can be viewed through an analysis of a company's financial statements, including the balance sheet and income statement. This article will examine the status of Scholastic Company's (Scholastic) ability to meet its long-term commitments and the profitability of Daktronics, Inc. (Daktronics). This document will include various financial ratio calculations and analysis of notable trends. It will also discuss the profitability and long-term borrowing positions of the companies discussed. Scholastic Company is a multibillion-dollar children's book publisher and distributor with more than 9,000 employees worldwide (Scholastic Inc., n.d.). Scholastic leases some of its physical offices, storage locations, and equipment (as cited in Gibson, 2011). Cornaggia, Franzen, and Simin (2013) noted that the reasons why businesses lease may be the result of the company's financial difficulties making it difficult to raise enough capital to purchase instead of lease. They also suggested that if the profitability of the business is not in question, leasing can be used to reduce taxes, thereby reducing borrowing costs. Although the reason for maintaining significant lease obligations is not disclosed in its financial statements (as cited in Gibson, 2011), Scholastic's ability to meet its long-term commitments is important to investors, creditors and the direction. Scholastic's long-term borrowing capacity can be determined through an analysis of its interest earned ratios, fixed charge coverage and debt ratios. The interest earned ratio uses a company's income statement to assess its ability to meet long-term obligations.... .. middle of article...... Cited Cornaggia, KJ, Franzen, LA and Simin, T. T. (2013). Registration of leased assets on the balance sheet. Journal of Corporate Finance, 22345-360. http://dx.doi.org/10.1016 /j.jcorpfin.2013.06.007 Damodaran, A. (nd). Simple rental or lease-purchase. Retrieved from http://pages.stern.nyu.edu /~adamodar/New_Home_Page/AccPrimer/lease.htmDaktronics, Inc. (nd). Our business. Retrieved from http://www.daktronics.com/en-us/about-usGibson, CH (2011). Financial reporting and analysis: use of financial accounting information. (12th ed.). Mason, OH: South-Western Cengage Learning. Monea, M. (2009). Financial ratios – Reveal the performance of a company? Annals of Economics of Petrosani University, 9(2), 137-144. Retrieved from http://www.upet.ro/engScholastic Inc. (nd). About Scholastic. Retrieved from http://www.scholastic.com/aboutscholastic/index.htm