Introduction:

Assume that you are a new partner at a large audit firm, which is looking to expand its client base. The firm is evaluating your performance based in part on your ability to find new audit clients, particularly those that appear to be in growth sector. The firm is looking to expand into high-tech industries, but is wary of adding very risky clients to its audit portfolio. You heard news that NVIDIA, one of the major graphics processor manufacturers in the world, has a good potential to grow in the high-tech sector. You also read a business article that the GPU industry has a solid prospect, with an increased demand for gaming devices and various alternative currency mining operations. You decide to check into the companys operations. NVIDIAs annual report paints a very positive picture of the companys prospects, and you think that this company may be a good opportunity for your firm. You mention the idea to the managing partner (a.k.a. CEO), and he/she asks you to perform a feasibility study of NVIDIA account. Based on your recommendations, the firm will decide if it wants to commit the resources to going after NVIDIA.

Required:

1. Perform a financial performance & risk assessment. Obtain the last three years audited financials for NVIDIA. This would cover financial statements for fiscal years ended in January 31, 2021 through January 27, 2019. Also if you have an access to 10-K, the MD&A (managements discussion & analysis) section of annual report will provide you with some good information, as well as the auditors report and the report of management. Using the financial statements, perform a preliminary analytical review (common-size, trend, & ratio analyses, as explained in chapter 5) of NVIDIA. At a minimum, you should compare the three years numbers to determine if there are any significant fluctuations in accounts, and calculate various financial ratios. (Keep this analysis fairly brief. For example, maximum two pages of presentation of key numbers and discussion of financial performance and risk. Remember, the point is to determine if you want NVIDIA as a client, not to audit)