Portfolio Project (350 Points)This Portfolio Project has two parts: calculations and a 4- to 6-page essay. While the calculation requirements ofthis assignment are important, equally important are your discussion and analysis of the quantitative results. Youwill submit two files: 1) a spreadsheet containing your horizontal and vertical analysis (and perhaps your ratios)and 2) a word document containing your essay.Choose a publicly traded company and perform an expanded analysis on the financial statements. Please use themost current 10K statements available on www.sec.gov http://www.sec.gov or annual statements infinance.yahoo.com http://finance.yahoo.com.

Part 1: Please complete the following for your chosen firm in an Excel spreadsheet:1. Horizontal and vertical analysis of the Income Statements for the past three years (all yearly balances setas a percentage of total revenues for that year).2. Horizontal and vertical analysis of the Balance Sheets for the past three years (all yearly balances set as apercentage of total assets for that year).3. Ratio analysis (eight ratios of your choosing) for the past three years PLUS a measurement for thecreditworthiness of your firm as measured by Altmans Z-score. Note that if you used your chosen firmfor our ratio-related discussion posts, then you MUST also present industry-average ratios or currentyear competitor ratios for your ratio analysis. Comparing your firms ratios to a close competitor or anindustry-average ratio makes your analysis much more meaningful.

Part 2: The Paper: 4-6 pages in length. Include a proper introduction and conclusion. Include a reference page. Your paper should provide your reader with an overall understanding of the financial health of yourchosen firm including the following:o Discussion of the ratio analysis results, including rationale for the ratios chosen.o Discussion of all horizontal and vertical analysis.o Discussion of four items from the management discussion of the firm that support the conclusionformed in your discussion of the financial results.Much of this course has concentrated on learning the financial statements, primarily because there was not anaccounting prerequisite. Because of this concentration, you may find this assignment challenging. However, if youunderstand the financial statements, then the horizontal and vertical analysis should (hopefully) be ratherintuitive. For example, if you see sales rise by 20%, then shouldnt you also see net income rise by 20% or more ifthe managers are effective at controlling costs? If you see sales rise by 20% and assets rise by 40%, we have to askwhy this is happening. It would appear that assets have risen too far given the sales that are generated from thoseassetswhy did this occur? You may have to research that type of question and discuss it in your analysis.Youve had some experience with financial ratios through Discussion Board. Id suggest that you start your ratioanalysis with the four ratios found in the DuPont equation. If you discover a weakness in one component of theDuPont ratios, then it would make sense to look at ratios that are closely related to the troublesome ratio. Forexample, if you discover that the asset turnover is declining over time, then take a look at some related ratios suchas the inventory turnover rate or the average collection period. If you discover that the equity multiplier isincreasing (indicating greater reliance on debt), then look at some related ratios such as the debt ratio or TimesInterest Earned. These ratios are discussed in our textbook, even though you may not have been assigned tothoroughly read the chapters.