FINANCIAL ANALYSIS PROJECT ACCT 112 SP18 INSTRUCTIONS You will find your assigned corporation on a Canvas announcement which will be posted as indicated on the course schedule. Use the Helpful Hints For Project page for assistance. The deliverable for this project will be in hard copy and include the following (in this order): 1. Title Page - the title page must be typed and include your name, date and the name of the corporation 2. Financial analysis chart - the financial chart must be typed using either Excel or Word (find forms on CANVAS-Modules-Financial Analysis Project). Requirements are outlined below in requirements 1a, 2a, 3a, 4a and 5. 3. Written report - the written report must be typed, double spaced, font size 12. Requirements are outlined below in requirements 1b, 2b, 3b and 4b Use good format, proper spelling and grammar. 4. Attachments - the corporations most current annual report (1) Income statement, (2) comprehensive income statement (if available), (3) balance sheet, (4) cash flow statement (5) statement of stockholder equity and (6) balance sheet from previous year. Note: The annual report must be from the corporations website. The annual report will be the latest annual report available plus the previous years balance sheet. No other statements or reports are required. Additional reports attached will result in the loss of points. See rubric in CANVAS for grading. Chart heading: Enter the name of your assigned company and the balance sheet dates from the financial statements (Month, day and year). Use the left data column for the most current year and the right data column for the prior year. Requirement 1: horizontal and vertical analysis (a) Enter the results calculated from the financial statements for the most recent fiscal year and the previous year on the financial analysis chart for the items below. Round to two decimal points, every answer in this section is to be stated as a percentage. Therefore if your calculation is .1052333, record as 10.52%. (b) For the written report: Sales & Profits and common-size income statement - discuss the trends by identifying whether there was an increase or a decrease from the previous year and how this impacts net income, was the increase or decrease in net income due to revenues or expenses? How is that reflected by operating income? For the vertical analysis discuss the trend (increase or decrease) and whether that is positive or negative for the company for each category and why. Horizontal analysis - Sales and Profits: (1) Percentage change in net sales revenue, (2) Percentage change in operating income, and (3) Percentage change in Net income (Net earnings) Common-size income statement: (1) Gross profit percentage, (2) Operating income percentage, and (3) Net income percentage Vertical analysis Balance sheet: (1) Accounts (trade) receivables to total assets, (2) Inventories to total assets, and (3) Long-term debt to total liabilities and stockholders equity. Requirement 2: Ratio Analysis (a) Using the assigned companys financial statements compute the following ratios for the most recent year and the previous year (use the textbook for ratio formula, do not use the internet): 1. Current ratio 2. Acid-test ratio 3. Inventory turnover 4. Days' in sales in inventory 5. Debt ratio 6. Rate of return on total assets 7. Rate of return on common stockholders equity 8. Price/earnings ratio* 9. Free Cash Flow (use Cash Flow statement Net Cash provided by Operating Activities minus net payments for capital acquisitions minus Dividends paid. This is a dollar amount. Enter your results in the financial analysis chart. Round all computations to two decimal place (except Free Cash Flow). Refer to the text for proper presentation. Note: you will need 3 years of balance sheets to complete the above. Include the previous years balance sheet with the printed financial statements. (b) For the written report, for each ratio above, write the definition of the ratio and analyze the most recent year compared to the previous year, is the company stronger, weaker or about the same compared to the previous year? Indicate why that is, based on the ratios. Requirement 3: BIG (Business Insights Global) research Note: if you have not accessed BIG before, see instructions in box below. (a) For the ratios identified below, record the database results from your company and the database results of a competitor on the financial analysis chart. Round each result to two decimal places. (b) For the written report, for each ratio below, write the definition of the ratio and then analyze your companys results compared with the competitor. Is your company stronger, weaker or about the same compared to the competitor? Ratios/data to record from BIG database: 1. Dividend yield 2. Asset turnover ratio (FY) 3. Return on Average Assets (FY) 4. Total Debt to Total Equity (FY) 5. Book value/share (FY) 6. P/E ratio (TTM) 7. Gross Margin 5 Yr. Avg. Requirement 4: Financial Dashboard-Markets (From BIG) Click on the Financial Dashboard" tab (from the company's BIG financial page). Requirement 4: Financial dashboard Click on the Financial Dashboard" tab (from the company's BIG financial page). a) Record the stock price on the day you access the data, record the stock price 52 week high and 52 week low for your company (52wk Range). Note the date you accessed the data on the chart. b) Click on the 'one year' tab - observe the price of the stock over a one year period. For the written report include a brief discussion of the stock price: is the current price trading near the 52 high or low? What is the stock trend over a one year period (rising, falling, and staying the same)? How has it changed over the year? Requirement 5: Stock Price: Note the closing stock price on the balance sheet date from your research in Yahoo finance. (See instructions on price earnings ratio above). Note: For additional assistance read: Helpful hints for project (in Canvas). By the way my company is MC Donalds