Accounting

Financial statement analysis and Sustainability Analysis

PART 1

1. Download data: Input data into Excel from the balance sheet, income statement and statement of cash flows for the most recent 4 years. The statements should each be on a separate tab. 2. Analysis: Create a common size income statement (i.e., the vertical analysis, the income statement as a percentage of sales) and a common size balance sheet (i.e., the vertical analysis, the balance sheet as a percentage of total assets). Perform horizontal analysis of the income statement and balance sheet (annual percentage changes).

PART 2

1. Background: Describe the industry your company operates in and your companys main business. 2. Financial analysis: (1) From the vertical analysis of the balance sheet, what is the main feature of the companys capital structure (i.e. Does the financing of assets come mainly from liabilities or equities? Is there any change in the company asset composition over the past 4 years? (2) From horizontal analysis of the income statement, what you can say about companys performance in the past 3 years. (3) Discuss your firms sources and uses of cash from the operating activities, investing activities, and financing activities. 3. Sustainability Analysis: (1) Where do you obtain the sustainability disclosure of the company? You can provide a link. (2) Summarize the business model and describe how the business advances the goal of sustainability. (3) To improve the sustainability, what measures the company has taken or will take?

PART 3

1. Introduction of the firm and its industry 2. Analysis of financial statements (mainly ratio analysis). You may consider the following tools/techniques: A. Figures of trend in profitability, liquidity and efficiency. B. Companys performance in the past 3 years from the horizontal analysis C. Significant features of the firms assets/liabilities/shareholders equity. 3. Analysis of the companys sustainability disclosure. You can consider the following aspects: A. How the business advances the companys goal of sustainability. B. What measures the company has taken or will take to improve the sustainability? C. How the sustainability measures influence the companys income statement and balance sheet?