Construct the condensed financial statements


Assignment Task: Each student will be required to perform an analysis of the financial statements for one of the three listed Australian companies that will be randomly assigned through Canvas. These companies are:

1. Myer

2. Qantas

3. Woolworths

Selected company called "Qantas".

Assessment task:

1. For the company assigned through Canvas, construct the condensed financial statements using information from the FY 2019 financial statements. Explain and justify any adjustments that you make, as part of the reformulation process, highlighting any assumptions that you have made in the process.

2. With reference to the condensed financial statements constructed from Part 1, as well as other benchmarks for comparison, critically evaluate the financial performance of the company by applying both the traditional and alternative approach to the decomposition of profitability.

3. Provide forecasts for the components of ROE calculated from Part 2, to arrive at an estimate of ROE for the 2020 financial year. Provide justifications for your answer.

4. What additional information would you be interested in as an analyst, in evaluating the company's performance for 2020? Given the current economic environment, what other financial ratios would you pay particular attention to?

Part A - Report - 800 words

a. outline any key assumptions underpinning reformulation process and the construction of the condensed financial statements,

b. evaluate the company's performance by identifying its key drivers of profitability and comparing it various benchmarks

c. present the reasoning and assumptions for the forecasts provided and

d. highlight any additional information that you would require to provide a judgement on the company's financial position/performance

Part B- Excel - Appendix

All calculations in Excel template as screenshots of condensed financial statement and ratio analysis.

Part 1: Construct the condensed financial statements

For the company assigned through Canvas, construct the condensed financial statements using information from the FY 2019 financial statements. Explain and justify any adjustments that you make, as part of the reformulation process, highlighting any assumptions that you have made in the process.

Part 2: Ratio Analysis

With reference to the condensed financial statements constructed from Part 1, as well as other benchmarks for comparison, critically evaluate the financial performance of the company by applying both the traditional and alternative approach to the decomposition of profitability.

Part 3: Forecast

Provide forecasts for the components of ROE calculated from Part 2, to arrive at an estimate of ROE for the 2020 financial year. Provide justification for your answer.

Part 4: What additional information would you be interested in as an analyst, in evaluating the company's performance for 2020? Given the current economic environment, what other financial ratios would you pay particular attention to?

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Attachment:- Financial Statement Analysis.rar

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Accounting Basics: Construct the condensed financial statements
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