Financial Analysis

Use an internet search engine of your choice and do a general search on the name of a publicly traded corporation of interest to you. Explore the website of the corporation you chose and locate that companys most recent Annual Report. You may need to look under a category that provides general information about the company and/or investor information. Then:

In the Annual Report, find and read the description of the corporation, including the type of business it is in. Briefly summarize the information that you learned in the first paragraph of your initial post ,and explain why gaining an understanding of the industry and type of business are important starting points for financial statement analysis.

Then, locate the companys primary financial statements in the Annual Report. Does your chosen corporation report its Statement of Cash Flows under the Direct or the Indirect method? Explain your thoughts as to why your chosen corporation might use one method over the other in the presentation of its Cash Flows.

From your companys financial statements, calculate at least two ratios under each of the following categories: liquidity, solvency, and profitability. Show your work in calculating these ratios. Write a brief statement describing what you have learned about your companys liquidity, solvency, and profitability.

For your responses, focus on the following questions: Do you agree with your classmates responses concerning the importance of understanding the business as a first step in financial statement analysis? Explain. Compare and contrast the ratios that you calculated for your chosen corporation with those of your peers. Are the ratios similar or dissimilar? Expand on your assessment, explaining the reasons why they may or may not be similar taking into account the industry and market each corporation operates under. Support your responses to classmates with additional research and/or examples of your understanding of ratio analysis, comparison, and interpretation.

Be sure to post at least one reference in support of your explanations and conclusions. At a minimum, your initial post should include a link to your chosen corporations Annual Report.