Purpose: To analyze performance and interpret financial statements of a company

Methodology: Select the financial statements (Balance Sheet and Income Statement) of any company. You will need the statements for three consecutive years for that company. The company you choose must not be the same as any other of your fellow students. You can use the following sources to identify your company.

• Google Search
• Other textbooks,
• Annual Reports of companies
• Library search
• SEDAR

Identify the following characteristics about your company

• What industry does it operate in?
• Financial trends in the industry
• Who are some competitors?
• Other important information? (if applicable)

Ratios to calculate and interpret for the three years.

• Current Ratio
• Quick (Acid Test) Ratio
• Debt to Equity Ratio
• Return on Investment
• Return on Sales
• Inventory Turnover
• Return on assets
• Asset utilization ratio

Final Report: You are taking the position of a Financial Analyst at a bank and you are preparing this report to make a recommendation on an application for a major loan. The loans officer at the bank would like you to summarize the performance of your company and make a recommendation to the bank.

Your report should include...

• Characteristics about your company as described above.
• Copies of Financial statements of your Company (all three years)
• Calculations for all ratios of company (all three years) as described above.
• Interpretations of company ratios: o What is the ratio measuring? o Is the three-year trend positive/negative/neutral?
• Recommendation to the loan officer. Grant the loan, why or why not? If yes could changes be made to strengthen the financial position further for a larger loan? If not, what are areas of improvement?

additional information: i have chosen Air Canada as my company on which i will be working on this assignment