Objective:
The objective of this assignment is to enhance your understanding of financial statements by analyzing a real company’s financial data. Working in groups, you will select a publicly traded company, obtain its financial statements, and present an analysis of its financial health and performance to the class. This assignment will help you apply the concepts learned in class to a real-world scenario, fostering teamwork, critical thinking, and financial analysis skills.
Assignment Instructions:
Group Formation:
Form groups of 3-4 students.
Once your group is formed, select a publicly traded company. Each group must choose a different company, so ensure that your selection is unique by confirming it with the instructor.
Company Research:
Obtain the most recent financial statements (balance sheet, income statement, cash flow statement, and statement of changes in equity) for your chosen company. These can typically be found in the company’s annual report (Form 10-K) or on their investor relations website.
Research the company’s background, including its industry, market position, and any recent developments that might affect its financial performance.
Financial Statement Analysis:
Analyze the company’s financial statements, focusing on key financial ratios and metrics. Your analysis should include:
Liquidity Ratios (e.g., Current Ratio, Quick Ratio)
Profitability Ratios (e.g., Gross Profit Margin, Net Profit Margin, Return on Equity)
Leverage Ratios (e.g., Debt-to-Equity Ratio)
Efficiency Ratios (e.g., Inventory Turnover, Receivables Turnover)
Cash Flow Analysis (e.g., Operating Cash Flow, Free Cash Flow)
Identify trends in the company’s financial performance over the past few years and discuss any significant changes.
Ethical Considerations:
Discuss any ethical issues the company has faced in its financial reporting. How has the company addressed these issues? What impact have they had on the company’s reputation and financial standing?
Presentation:
Create a 10-15 minute presentation summarizing your findings. Your presentation should include:
An introduction to the company and its industry.
A detailed analysis of the financial statements.
Key financial ratios and what they reveal about the company’s financial health.
A discussion of any ethical issues and their impact on the company.
Your group’s conclusion on the company’s overall financial performance and future outlook.
Use visual aids, such as charts, graphs, and tables, to support your analysis and make your presentation engaging.
Submission Requirements:
Presentation Slides: Submit your PowerPoint slides (or other presentation format) through the course’s online platform by the day of your scheduled presentation date.
Written Summary: In addition to the presentation, submit a 2-3 page written summary of your analysis, including the financial ratios calculated, your key findings, and any ethical considerations discussed. Ensure your summary is formatted in APA style, with at least three credible sources cited.
