Financial Statement Analysis Project ACCT 615 The purpose of this project is to allow you to thoroughly investigate the financial performance of a US public company. You are required to write down brief answers to items listed in exph part except Part 1. Purt 1: Choose your company and locate its 2022 annual report (or 2021 if 2022 not ayailable). Pleuse avoid financial services companies, i.e. banks, insurance companies, and real estate companies (SIC codes 6000 ). (You should bave this reaclily available from the Kickstart project.) Part.2; 1. What product does your company sell? Which industry is that? Who are the competitors of the compiny? 2. Compare the company's daily stock returns with one of its competitors and those of Dow Jones Industrial Average in the past five years and explain the trends you observe. You are required to use a graph to support your comments. 3. Obtain one recent analyst report and summarize it. You should address the analyst's. current assessment of your company, and you should summarize the analyst's prognosis for your company. crempany and potentially affecied iss sock performance. fianh sotite abould be ar hant 4 o Trint out the athles and prowide a summay af more than 100 wonds for each of (leve Hist 4. 1. Who is the compaty's auditer? What is the responsibitity of the auditor? What is the audisor's cpinien? 2. Who is resposible for the preparation of the cumpany's financal stasemente? 3. Find out ans state the scsponsibility of the audit corrmitice. R: 1. Whe is the company's CEO? Who is the company's CFO? How Kong hane dey becn in the compeny? What do they have to do rcgarting finiscial feporting after the Sarbanes Oxley att of 20027 . 2. How much did the CEO of the company make in total compensation? How was he/she paid: salary, bonus, stock, stock options? Repeat the two questions for the CFO. 3. What is the management's view on the financial performance of the company? (Summarize three key items in the management discussion and analysis section.) Part 6: 1. Prepare a 5-year trend analysis, using the earliest year as the base year of (1) net sales, (2) net income, (3) total assets, (4) total liabilities, (5) total stockhoiders' equity, and (6) operating cash flows. Comment on the significance of the results. 2. Prepare a vertical analysis for 2022 (or 2021) of net sales based on the income statement data: cost of goods sold, operating expenses, interest expenses, income tax expense, other income/expenses, and net income. Comment on the significance of the results. 3. Prepare a vertical analysis for 2022 (or 2021) of total assets based on the balance sheet data: current assets, plant assets (net), intangible assets, other assets, current liabilities, long-term liabilities, other liabilities, preferred stock, common stock, additional paid in capital, retained earnings, treasury stock, and other equity. Comment on the significance of the results. 4. Identify a competitor of your company and calculate the following ratios for your company and its competitor for 2022 (or 2021), and comment on significant differences of the two companies in terms of the ratios: a. Liquidity ratios: current ratio, quick ratio, receivables turnover, and inventory turnover. b. Profitability ratios: asset tumover, profit margin, retum on assets, and return on common stockholders' equity, earnings per share, price-earnings ratio, and payout ratio. c. Solvency ratios: debt to total assets and times interest earned 5. Did the company report any discontinued operations on the income statement? 6. Did the company report any extraordinary items on the income statement? 7. Did the company report any comprehensive income? Where? 8. Calculate the company's free cash flow for 2022 (or 2021 ). Part 7: Evaluate the company's short-term (1-year) and long term (5-year) financial performance. Comment on the company's profitability, liquidity, and solvency. Do you recommend the company to potential investors? Part 8: Present your evaluation in Part 7. Base your argument on information you have gathered in Parts 6 and 7. Financial Statement Analysis Project ACCT 615 The purpose of this project is to allow you to thoroughly investigate the financial performance of a US public company. You are required to write down brief answers to items listed in exph part except Part 1. Purt 1: Choose your company and locate its 2022 annual report (or 2021 if 2022 not ayailable). Pleuse avoid financial services companies, i.e. banks, insurance companies, and real estate companies (SIC codes 6000 ). (You should bave this reaclily available from the Kickstart project.) Part.2; 1. What product does your company sell? Which industry is that? Who are the competitors of the compiny? 2. Compare the company's daily stock returns with one of its competitors and those of Dow Jones Industrial Average in the past five years and explain the trends you observe. You are required to use a graph to support your comments. 3. Obtain one recent analyst report and summarize it. You should address the analyst's. current assessment of your company, and you should summarize the analyst's prognosis for your company. crempany and potentially affecied iss sock performance. fianh sotite abould be ar hant 4 o Trint out the athles and prowide a summay af more than 100 wonds for each of (leve Hist 4. 1. Who is the compaty's auditer? What is the responsibitity of the auditor? What is the audisor's cpinien? 2. Who is resposible for the preparation of the cumpany's financal stasemente? 3. Find out ans state the scsponsibility of the audit corrmitice. R: 1. Whe is the company's CEO? Who is the company's CFO? How Kong hane dey becn in the compeny? What do they have to do rcgarting finiscial feporting after the Sarbanes Oxley att of 20027 . 2. How much did the CEO of the company make in total compensation? How was he/she paid: salary, bonus, stock, stock options? Repeat the two questions for the CFO. 3. What is the management's view on the financial performance of the company? (Summarize three key items in the management discussion and analysis section.) Part 6: 1. Prepare a 5-year trend analysis, using the earliest year as the base year of (1) net sales, (2) net income, (3) total assets, (4) total liabilities, (5) total stockhoiders' equity, and (6) operating cash flows. Comment on the significance of the results. 2. Prepare a vertical analysis for 2022 (or 2021) of net sales based on the income statement data: cost of goods sold, operating expenses, interest expenses, income tax expense, other income/expenses, and net income. Comment on the significance of the results. 3. Prepare a vertical analysis for 2022 (or 2021) of total assets based on the balance sheet data: current assets, plant assets (net), intangible assets, other assets, current liabilities, long-term liabilities, other liabilities, preferred stock, common stock, additional paid in capital, retained earnings, treasury stock, and other equity. Comment on the significance of the results. 4. Identify a competitor of your company and calculate the following ratios for your company and its competitor for 2022 (or 2021), and comment on significant differences of the two companies in terms of the ratios: a. Liquidity ratios: current ratio, quick ratio, receivables turnover, and inventory turnover. b. Profitability ratios: asset tumover, profit margin, retum on assets, and return on common stockholders' equity, earnings per share, price-earnings ratio, and payout ratio. c. Solvency ratios: debt to total assets and times interest earned 5. Did the company report any discontinued operations on the income statement? 6. Did the company report any extraordinary items on the income statement? 7. Did the company report any comprehensive income? Where? 8. Calculate the company's free cash flow for 2022 (or 2021 ). Part 7: Evaluate the company's short-term (1-year) and long term (5-year) financial performance. Comment on the company's profitability, liquidity, and solvency. Do you recommend the company to potential investors? Part 8: Present your evaluation in Part 7. Base your argument on information you have gathered in Parts 6 and 7