Financial Statement Analysis Objective Put the Numbers in Perspective REQUIRED WRITTEN PROJECT You are required to complete 3 sections for 40 points You must complete section 1 plus two sections (you may choose from section 2 6) You may earn bonus points for completing additional sections Obtain the most recent annual report for two companies in the same industry The reports should contain at least three years of income statement data and two years of balance sheet data One company would be the base company where you will use to complete part 2 5 The second company is used for comparative purpose in part 6 Provide a summary of the base companys industry and operation Base company Analyze items on the income statement that would be important and relevant to an investor, and discuss whether your companys performance related to these items appeared to be improving, deteriorating, or remaining stable Justify your answer using financial ratios, vertical horizontal analysis, graphs, etc Base company Analyze items on the balance sheet that would be important and relevant to an investor, and discuss whether your companys performance related to these items appeared to be improving, deteriorating, or remaining stable Justify your answer using financial ratios, vertical horizontal analysis, graphs, etc Base company Analyze the companys investing and financing activities for the most recent year as identified in the statement of cash flows, specifically identifying the two largest investing activities and the two largest financing activities Discuss whether you agree or disagree with the investing and financing strategies that your company appears to be employing and whether the companys cashflow is well managed Identify 2 (two) items not included in (or derived from) the financial statements that you think would be important to someone considering whether to invest in your company Discuss your reasons for believing that these two items about the company would be important in making an investment decision (Hint you might want to consider items discussed in other business classes ) Compare your base companys financial statements with those of the second company in the same industry If you were making a decision to invest in one of the two companies, which company would you choose Why (Note your answer in this section must include some financial issues, but your answer need not be limited to a discussion of financial issues )

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Financial Statement Analysis Objective: Put the Numbers in Perspective REQUIRED: WRITTEN PROJECT **You are required to complete 3 sections for 40 points. You must complete

Financial Statement Analysis

Objective: Put the Numbers in Perspective

REQUIRED: WRITTEN PROJECT **You are required to complete 3 sections for 40 points. You must complete section 1 plus two sections (you may choose from section 2-6). You may earn bonus points for completing additional sections.

Obtain the most recent annual report for two companies in the same industry. The reports should contain at least three years of income statement data and two years of balance sheet data. One company would be the base company where you will use to complete part 2 -5. The second company is used for comparative purpose in part 6. Provide a summary of the base companys industry and operation.

Base company - Analyze items on the income statement that would be important and relevant to an investor, and discuss whether your companys performance related to these items appeared to be improving, deteriorating, or remaining stable. Justify your answer using financial ratios, vertical/horizontal analysis, graphs, etc.

Base company - Analyze items on the balance sheet that would be important and relevant to an investor, and discuss whether your companys performance related to these items appeared to be improving, deteriorating, or remaining stable. Justify your answer using financial ratios, vertical/horizontal analysis, graphs, etc.

Base company - Analyze the companys investing and financing activities for the most recent year as identified in the statement of cash flows, specifically identifying the two largest investing activities and the two largest financing activities. Discuss whether you agree or disagree with the investing and financing strategies that your company appears to be employing and whether the companys cashflow is well-managed.

Identify 2 (two) items not included in (or derived from) the financial statements that you think would be important to someone considering whether to invest in your company. Discuss your reasons for believing that these two items about the company would be important in making an investment decision. (Hint: you might want to consider items discussed in other business classes.)

Compare your base companys financial statements with those of the second company in the same industry. If you were making a decision to invest in one of the two companies, which company would you choose? Why? (Note: your answer in this section must include some financial issues, but your answer need not be limited to a discussion of financial issues.)