Discuss the Usefulness of the Statement of Financial Position (Balance Sheet) and The Statement of Cash Flows to Investors and Third Parties. (Please make mention of the Elements of the Statements and the relevant Standards)

ASSIGNMENT QUESTION TWO :

Each group will select two companies operating in similar industries and will email me the names of the two companies .Your task is to gather the financial statements and reports of your selected companies’ and other relevant financial information. The companies must have at least 2 years of financial statement information available starting 2020. You may supplement these with additional data from any public sources if they help you generate further insights.

Your group is required to analyse the two companies’ financial statements and reports over two- year period (2020 and 2021 ).

To assist you complete this task, you are Required to:

1. Provide brief background information about the company including what it does (products/services), markets it operates in, its people/management,

2. Describe and analyze four significant risks facing the company. The risks can be at the national and/or international levels and can relate to operational, market, economic or any other

3. What business strategies are being pursued by each of the two companies?

4. What are the critical drivers of your companies’ industry profitability? How do changes in these critical drivers affect each of the two companies?

5. Analyze the financial performance of the company for the current year and last year across the following dimensions:

(a) Accrual ratios (calculate and analyze at least three ratios in each category)

i. Profitability

ii. Liquidity & Solvency

iii. Efficiency

iv. Return ratios

(b) Cash flow ratios (calculate and analyze at least three ratios in each category)

i. Liquidity & Solvency

ii. Financial structure

iii. Return ratios

6. What is your overall impression of the annual report for each of the two companies? Does it make you want to buy shares in either of the company?

7. For businesses, the toughest leadership test of the COVID-19 pandemic is how to sustain a business in an environment where economies are still reeling from fall down of the How can your two companies navigate this COVID-19 difficult environment and remains sustainable? What business strategies should the two companies adopt?