To practice interpreting organizational financial statements.
Action Items
1. Obtain a current income statement, balance
sheet, and cash flow statement of a for-profit or not-for-profit organization
of interest to you.
2. Prepare a financial condition interpretation
for your selected organization, that:
a. Is five-to-six pages in length
b. Briefly describes the selected company
c. Indicates why you selected it
d. Shows your computations using relevant
financial ratios
e. Provides justified answers to:
i. How is it being financed (i.e. debt vs. equity)?
ii. Is it using its assets productively?
iii. Does it have positive equity?
iv. Are revenues growing or declining?
v. Can it support its payroll?
vi. Is the organization currently profitable?
vii. Comments on (for the next year of operations):
i. Human concerns related to its financial operations
ii. Any financial “red flags” or significant concerns
iii. Upcoming financial challenges
iv. Likely cash flow position
v. The organization’s prospects for revenue and profit growth & margin improvements
viii. If you were going to invest in or consider working for this
organization:
i. Where would you go to obtain more financial information about
this organization?
ii. What additional information related to its financial condition
would you want to gather?
iii.
What financially-related questions would you ask of management?
ix.
Discusses what you learned from completing this assignment.
