The project will teach you how to perform a financial analysis on a set of financials. A financial analysis report is constructed by a person who is researching a company, usually with the intent of recommending its stock to investors or to a board of directors. The report contains multiple components, such as company overview, investment essentials, valuation, risk analysis, and a summary. However, for the purpose of this class, we will focus on the investment essentials. In this component - "investment essentials", you will need to analyze the financials by using ratio analysis, trend analysis, and provide a quick summary of your findings.

You as manager need to fully understand your role in the budgetary process.It is the most basic financial planning and control tool.Every manager needs to know what costs are associated with their department, and how in relation are they doing to that budget.You might achieve your departmental goals, but if you go over budget in order to achieve those goals, you create financial problems for the company and jeopardize your own job performance review.In most cases, part of your performance appraisal will be based on whether you were within budget for the year.

Income statements show the results of a company's operations, which are usually given quarterly or by fiscal year.It shows the sales, also known as revenue, and expenses.It also shows whether the company had a profit or loss during that period.The Income Statement is also known as the "Profit & Loss" statement or "P&L."Simply put, the formula is: "Revenue - Expenses = Income."The easiest and best scenario is, "The higher the sales and the lower the expenses, the greater the income."There are all types of expenses that are generated in a company and this statement sees how the company is spending its money, and how management is most and least effective.

As previously described, the Balance Sheet shows the value in the company's accounts at a certain period, whereas the Income Statement covers operations over an entire period.

 

2. update a common size income statement
4. update the common size balance sheet

Balance Sheet - Sample Corp. FY 2019,2020
	12/31/2020	12/31/2019			12/31/2020	12/31/2019
Assets				Liabilities & Owner's Equity
Current Assets				Current Liabilities
Cash	$45,000	$40,000		Long Term Debt 1 Yr	$12,000	$11,000
Marketable Securities	$65,000	$60,000		Notes Payable	$15,000	$14,000
Accounts Recieveable	$85,000	$70,000		Accounts Payable	$13,000	$12,000
Notes Receivable	$45,000	$40,000		Taxes Payable	$11,000	$10,000
Inventories	$85,000	$80,000		Accrued Expenses	$21,000	$20,000
Total Current Assets	$325,000	$290,000		Other Current Liabilities	$10,000	$9,000
Long-Term Assets				Total Current Liabilities	$82,000	$76,000
Land	$160,000	$148,000
Buildings	$100,000	$90,000		Long-Term Liabilitites
Machinery	$30,000	$25,000		Notes Payable
Acumulated				Bonds Payable
Depreciation	-$4,000	-$3,500			$0	$0
Net Tangible Assets	$286,000	$259,500
Intangible Assets				Other Liabilities
Goodwill	$15,000	$5,000		Pension Obligations	$90,000	$82,000
Patents	$20,000	$19,000		Deferred Taxes	$85,000	$74,000
Trademarks	$15,500	$13,400		Minority Interest
Copyrights	$24,000	$22,900		Total Other Liabilities	$175,000	$156,000
Total Intangibles	$74,500	$60,300		Total Liabilities	$257,000	$232,000
				Owner's Equity
				Preferred Stock	$60,000	$50,000
				Common Equity
				Common Stock	$97,500	$89,000
				Capital Surplus	$111,000	$99,000
				Retained Earnings	$70,000	$60,800
Total Long Term Assets	$360,500	$319,800
				Total Common Equity	$278,500	$248,800
				Total Owner's Equity	$60,000	$50,000
Total Assets	$685,500	$609,800		Total Liabilitties & Owners' Equity	$595,500	$530,800

Income Statement. FY 2019, 2020
Figures USD	2020	2019	Amount Difference
Sales (Revenue)	$15,500,000	$14,625,000	$875,000
COGS	-$9,900,000	-$10,500,000	$600,000
Gross Income	$5,600,000	$4,125,000
Less: Selling, General, Administrative Costs (SG&A)	-$3,300,000	-$2,350,000
Operating Income Before Depretiation (EBITDA)	$2,300,000	$1,775,000
Less: Depreciation, Amortization, Depletion	-$11,000	-$10,000
Operating Income (EBIT)	$2,289,000	$1,765,000
Less: Interest Expense	-$93,000	-$89,000
Non-Operating Income
Less: Non-Operating Expenses	-$42,000	-$40,000
Pretax Accounting Income	-$42,000	-$40,000
Less: Income Taxes	-$1,350,000	-$1,240,000
Income Before Extraordinary Items
Less: Preferred Stock Dividends	-$87,000	-$85,000
Income Available for Common Stockholders	-$87,000	-$85,000
Less Extraordinary Items	-$18,000	-$15,000
Less Discontinued Operations	-$400,000	-$100,000
Adjusted Net Income
Earning Per Share (200,000 shared of stock	$0	$0