How profitable is your company? Referring back to the Variance – Horizontal Analysis on the “Income Statement” tab (Column H & I), identify three to four significant variances and provide explanations for why they are changing. You will find the discussions within the Management, Discussion & Analysis section (Item #7) of your company’s Annual Report / 10-K to be helpful. In addition, the Common-Size Vertical Analysis for the income statement may assist in adding additional content.
What is your overall assessment of your company’s financial performance? Review the Common-Size – Vertical Analysis and the Variance – Horizontal Analysis on the “Balance Sheet” tab as well as the various ratios found on the “Financial Ratios” tab, assess the company’s performance with regards to asset management, liquidity, and solvency. You do not need to address all of these. Only that which is most relevant to the next topic.
Would you buy or sell an investment in your company’s stock? Referring to all the information you have gather and the most recent stock price and price-to-earnings ratio, provide a conclusion as to why you would or would not invest in you company. Your answer should be from the view of a long-term investor; not that of a “day-trader.”
