Question
Comprehensive Financial Statement Analysis Problem (Individual) You will select a publicly traded, global corporation to analyze. Referring to the annual report and supplemented by your
Comprehensive Financial Statement Analysis Problem (Individual)
You will select a publicly traded, global corporation to analyze. Referring to the annual report and supplemented by your research, respond to the instructions and questions below. Fully explain your answers by detailed explanation or calculations where necessary and appropriate. All questions and instructions refer to the most recent year reported, unless otherwise stated.
- Provide an overview of the company, the type of business it engages in, and any significant recent events affecting the company's operations or financial position.
- Does the company produce a Corporate Social Responsibility (CSR) Report? Contrast this report to the 10K.
- Discuss the auditor's report, the role of the auditors, and the significance of the report to the corporation and to the external users of the financial statements.
- How many shares of common stock did the company have outstanding?
- Does the company have any preferred stock outstanding?
- What is the company's total paid-in capital?
- What was the average price per share received by the Company for all common stock issued since inception of the Corporation?
- What was the total dollar amount of dividends declared in the most recent year reported?
- Evaluate and comment on the following:
a. Liquidity - ability to meet short-term obligations as they come due; b. Solvency -asset management, debt management and interest coverage; c. Profitability - this should include return on assets and equity, and earnings per share; d. Cash position - this should include a discussion of the Statement of Cash Flows, whether it is in the direct or indirect format, and the primary sources and uses of cash for the period.
- How does the company's performance compare to similar companies and/or industry standards?
- Does this company observe socially responsible operating policies? Give examples.
- Describe unique opportunities available to this company or industry. Has the company capitalized on these opportunities?
- What current or potential threats exist for this company or industry?
- Based on all your analysis, what strengths and weaknesses, if any, do you see in the financial status, operating performance, or cash position of the company, and what steps would you recommend for improvement?
You will be graded on the professional presentation as well as the completeness of your paper. This includes proper internal source citation and bibliography format using the APA referencing. Respond to the directions as fully and completely as you can. Some questions or instructions will require more explanation than others will. Comparison to industry ratios and averages requires that you actually state the specific industry data to which you are referring.
Support your discussion, opinions, and conclusions fully. Remember that evaluation requires some comment and analysis, not just a computation of the ratios. At a minimum, you are expected to use the ratios presented in your text. Be sure to show all computations. You should also use the same formulas for the ratios used by the author of the text, unless you explain why you are using a different version of the ratio.
Valid analysis requires comparison to industry averages. This research of the industry as a basis for evaluating the ratios that you calculate is a major component of this assignment. You are expected to include that industry data as a major part of your paper. Also, comparison to industry average ratios requires that you actually present (and properly cite) the specific industry data you are referring to. Several sources are listed below and in your text for that industry research. You must use one or more of these sources for your industry ratio data.
There are many financial market websites where one can find financial data for various companies (e.g., www.marketwatch.com). Many of those include some industry ratios. For this data, you must refer to the references on industry information located in the library. Some of these are Value Line Investment Surveys, Standard and Poor's Industry Survey, Morningstar Investment Research Center (Stock Analysis Report is a great starting place), Robert Morris Associates, Moody's or the Wall Street Journal. You are expected to do library research to find the industry ratios.
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