Financial Statement Analysis

Question 1.

Financial Statement Analysis Instructions

Think of an international company that assume had a better or worse fiscal year 2020 or 2021 compared to other recent fiscal years?

Will need to locate comparative financial statements for the company and analyze at least three fiscal years?

Question 2.

Each part must be included but does not have to be in the same order as the suggested outline?

Will analyze the international company by examining the trends, comparing to competitors, evaluating the recent economic impact, and deciding why the company would or would not be a good investment and if assumption was correct (conclusion)?

Analyze the Balance Sheet, Income Statement, and the Statement of Cash Flows?

The report also includes an analysis of the international operations of the company?

Also, as part of the conclusion, feel free to analyze what the company should do to correct any financial or operational problems?

Question 3.

The objective is to write Financial Statement Analysis paper written in paragraph form?

If are having difficulty with beginning analysis, start by calculating trends on each of the financial statements and then analyze what those trends mean and how they affect other accounts and/or statements?

Remember, the book is a 'how to manual' of how to analyze financial statements?

There is also guidance at the end of each chapter within the Ongoing Analysis Project (Ch 1-6)?

Analyze sufficiently, first read the textbook. Refer to the Descriptive vs Analytical reference?

Use resources, including the company webpage, EDGAR database (great for competitor analysis), annual report, MD&A, analyst reports, journal articles, news releases, etc. As part of the completed paper, complete ratio analysis?

Question 4.

Are the ratios strong, weak, more or less liquid, contain more or less risk?

The introduction should provide information summarizing and supporting the evidence and data obtained from the analysis?

The goal is not a paper that just summarizes or simply states the data, but a thorough analysis of the international company?

The focus of this exercise is to analyze financial data and to make a formal written recommendation, something would give to employer or a client, not merely describe the numbers and trends?

Question 5.

Recommended Outline

1. Introduction
   1. Brief description of the company
   2. Objective of paper
   3. Assumption of 2020 results
   4. Summary of findings
2. Firm, Industry, and Environment
   1. Description of company and its management
   2. Discussion of competitive environment (use Porter's 5 Forces located in data included in the 10K)
   3. Economic climate and outlook
   4. Other factors (governmental regulations, labor relations, litigation...)
3. Balance Sheet Analysis- must include common-size statement
4. Income Statement Analysis- must include common-size statement
5. Cash Flow Analysis- (Summary Analysis statement but still analyze the Cash Flow)
6. Ratio Calculation of Financial Statements
7. Summary and Conclusion
   1. Summary- Basic understanding of the firm, its past performance, its expected future performance, and the justification for overall conclusion of the firm. This part should be able to stand alone as a summary of analysis.
   2. What conclusions do derive about the company and its potential?

Question 6.

Analyzethe Balance Sheet, Income Statement, and Statement of Cash Flows and prepare a Common Size Balance Sheet and Common Size Income Statement.The Statement of Cash Flows Summary Analysis (just the statement). Still analyze the Statement of Cash Flows