Introduction

Explain clearly the purpose of the report and your recommendation.

Analysis

Your analysis must be organized into three subsections: financial position, financial performance, and cash flows. These three subsections should be given roughly equal emphasis

Each of these subsections requires you to interpret one of the main financial statements (balance sheet, income statement and cash flow statement) in light of all the relevant financial and contextual information available to you. Focus your interpretation on the specific scenario you are addressing which is Your company has run into a scandal similar in financial impact to the one faced by Volkswagen in 2015. Your company will have to create a provision equal in size to 10% of its most recent revenues. Assume that the impact will make it too expensive to raise cash from financing. That is, assume the company will be seen as riskier, making it unfeasible to raise the funds by issuing shares or borrowing. That means that the costs to deal with the scandal will have to be paid out of operating cash flows. Assume that this will take two fiscal years.

Your job is to prepare a report for the Board of Directors advising them on how well the company will be able to survive this financial event. Just interpret the event in terms of the impacts the scandal will have on the companys (a) financial position, (b) financial performance, and (c) cash flows, as disclosed by the company in its most recent annual financial statements.

Back up your analysis with your spreadsheet calculations if any.

Conclusion

Draw all the insights from your analysis together into a coherent argument.

State your overall conclusion again, even though you stated it in the introduction.

Statement of Cash Flows Statement of Income Statement of Financial Position Statement of Cash Flows