Financial statement analysis project | Business & Finance homework help

Assumption

You have been hired as a financial consultant for your company.

Assignment

Based on your analysis of the firm’s financial statements and any relevant supplementary information you can obtain about the firm and its operating environment, identify areas in which the company is performing well (strengths) and advise management of any problem areas (weaknesses).

Include in your analysis an assessment of how the firm’s strengths and weaknesses affect its credit worthiness and investment potential.

Data

The time period for the analysis should include five full years if possible.  In addition to the financial statements and other material in the annual and 10-K reports, you should review relevant materials from outside sources such as newspapers, business periodicals and investment resources.

Outline

The outline on the back side of this page is provided for guidance, but the analysis should be adjusted, as appropriate, to conform to the individual characteristics of the firm.  Based on the unique qualities of your firm, certain items on the outline may not be necessary and other items may need to be included.  Feel free to contact me if you have any questions or want additional input on where certain things need to go.

Suggested Outline for the Financial Statement Analysis

I.       Introduction

          A.  Objective of paper

          B.  Summary of findings

II.      Firm, Industry, and Environment

          A.  Description of firm and its management

          B.  Discussion of competitive environment – comparative ratio’s of at least 2 other companies in the same industry

          C.  Economic climate and outlook

          D.  Other factors, e.g. governmental regulations, labor relations, litigation

III.     Evaluation of Financial Statements

          A.  Overview

          B.  Short-term liquidity

          C.  Operating efficiency

          D.  Capital structure and long-term solvency

          E.  Profitability, Liquidity, & Solvency

          F.  Market measures

          G.  Quality of financial reporting (analyze company’s last 5 years financial statements)

IV.     Outlook, Summary, and Conclusions

          A.  Outlook for performance, earnings projection

          B.  Investment potential

          C.  Credit assessment

          D.  Summary and conclusions

V.      PowerPoint Slides (summary, no more than 5 slides total)

VI.     Appendix

VII.   Footnotes

VIII.  Bibliography