Select a company from a nonregulated industry for which you can obtain complete financial statements for at least the most recent six years.

Required:

Based on these financial statements, the company’s background, industry statistics, and other market and company information, prepare a financial statement analysis report covering the following points:

a. Executive summary of the company and its industry.

b. Detailed evaluation of:

(1) Short-term liquidity (current debt-paying ability). (6) Profitability and equity analysis.

(2) Cash forecasting and pro forma analysis. Note: You are expected to use a variety of

(3) Capital structure and solvency. financial analysis tools in answering (b).

(4) Return on invested capital. Your analysis should yield inferences for each

(5) Asset turnover (utilization). of these six areas?

Required: Answer the following questions, and provide supporting calculations. Explain the accounts and amounts used in each analysis.

a. What transactions and events explain the $7,000 increase in stockholders’ equity for Year 6?

b. Note 6 discloses “capitalized lease obligations” of $1,000. What accounts are increased in Year 6, and by what amounts, to reflect these leases? Explain. How are these leases reflected in the statement of cash flows?

c. Use T-account analysis to determine how much long-term debt is paid in Year 6. Does your answer agree with the amount reported by ZETA?