The project requires an analysis of the financial statements of two publicly traded companies. You should select two companies that operate within the same industry. I recommend avoiding financial institutions, utilities or other companies from industries with unusual financial reporting. It’s better to go with two retailers or two manufacturers, for example. As you select your companies, you should try to obtain financial statements and other reports from the Securities and Exchange Commission’s (SEC) website at sec.gov. If there is no information available for a company on the SEC website, you should select a different company. You will need to obtain information for your companies from their Form 10K as filed with the SEC.
Components of the project: • Brief introduction of your companies (About 1/2 page.)
• Profitability analysis (About 1 page.)
• Liquidity analysis (Abou 1page.)
• Solvency analysis (About 1/2 page.)
• Conclusion and parting comments (About 1/2 page.)
Formatting:
• Your report should include various ratios that you have calculated for your companies. It would also be a good addition to include charts that you have prepared for the various ratios you will be using in your analysis. Any charts, graphs, or tables should not be considered part of the page count presented above. • Charts, graphs, and analysis that can be found online are not acceptable for your analysis and including them will result in a lower score. • Your report should be prepared using 12-point font, 1.5 line spacing, 0-point spacing before each paragraph, 0-point spacing after each paragraph, with 1-inch margins.
Regarding evaluation and grading, your report should be prepared and edited to assure its completeness and a professional appeal. You should be sure to include informative comments regarding your analysis and findings. Reports that simply repeat what charts and calculations depict will receive low scores. Reports that explain what charts and calculations depict and what caused the situations will receive moderate scores. Reports that explain what charts and calculations depict, what caused the situations, and the implications of those situations will receive higher scores.
Charts and other detailed will be provided via an excel sheet with the companies and their info on them. Simply finish assigning the codes in the correct spaces to get the sheet to spit out the info. Reference the powerpoint for more info on the excel sheet.
Course parameters are as follows: Upon completion of this course, you should be able to:
• Comprehend financial accounting’s role in business and understand the differences between financial and management accounting.
• Read and understand company financial statements including the income statement, the balance sheet, the statement of shareholders equity and the statement of cash flows.
• Use common size analysis and ratio analysis to evaluate a company on the following dimensions:
o Efficiency
o Liquidity
o Solvency
o Profitability
o Cash flow
• Understand how creditors and investors evaluate a company, including an assessment of credit and investment worthiness.
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