The analysis is on two companies and the spreadsheet has both financial statements and there are individual 10K statements for each. Financial Statement Analysis Overview

A financial analysis is a written document that combines analytical narrative with the supporting financial metrics in order to communicate the results of the analyst’s examination of the financial information. In the Resources for this assignment, you will find links to the 10-K forms for The Dow Chemical Company and E.I. Du Pont De Nemours and Company, available in both HTML and PDF formats. (Note that the HTML and PDF versions of the documents are identical; you can choose which format you prefer.) You can glean a great deal of information about each company from its respective 10-K report. You will also find the Dow and DuPont Financial Statements Excel file, which contains the Balance Sheets, Income Statements, and Statements of Cash Flows for both companies. Each statement contains three years of financial information including the dollar figures and, in the balance sheet and income statement, common-sized percentages. Use these documents to complete your assignment.

http://d18rn0p25nwr6d.cloudfront.net/CIK-0000030554/fbedca7b-a3df-4a97-9d2a-900ee184d17f.pd

Instructions

Prepare a financial analysis (a narrative that includes the supporting calculations) to compare and contrast the two companies with respect to the following:

1.Liquidity – Working Capital, Current Ratio, Quick Ratio, Operating Cash Flow to Current Liabilities, Days Receivables Outstanding, Days Inventory Held, Accounts Payable Turnover, Days Accounts Payable Outstanding, Revenues to Cash, Days Revenues in Cash, and other metrics that may be helpful.

2.Solvency – Liabilities to Assets Ratio, Liabilities to Shareholders’ Equity Ratio, Long-Term Debt to Shareholders’ Equity Ratio, Interest Coverage Ratio, Operating Cash Flow to Total Liabilities Ratio, and other metrics that may be helpful.

3.Profitability – Return on Assets, Profit Margin Percentage, Total Asset Turnover, Return on Common Equity, Capital Structure Leverage, Gross Margin Percentage, Operating Margin Percentage, Accounts Receivable Turnover, Inventory Turnover, Fixed Asset Turnover, and other metrics that may be helpful.

4.Horizontal and Vertical Common-Sized Percentages – Use common-sized percentages from the income statements to perform both vertical and horizontal analysis of the companies’ performance.

5.DuPont Analysis – Prepare a DuPont analysis for each company. As you complete your assignment, be sure it meets the following guidelines. Read the Financial Statement Analysis Scoring Guide for specific information about how your assignment will be evaluated.

Written communication: Written communication is free of errors that detract from the overall message.

Answer rating: 100% (QA)

Analysis Analysis includes appropriate financial metrics and comparisons and provides a clear understanding of the financial health of each company Calculations Calculations are correct appropriate an... View the full answer