Assignment: Financial Statement Analysis
Select the most recent financial set of financial statements for the company of your choice. Be sure to have your company approved by your professor.
Here is the scenario for your project:
You are the newly appointed treasurer and your partner is the newly appointed controller of your company. In order to learn more about your company, you have decided to analyze the company's financial performance over the last 2 years. To do this, you have decided to calculate the following ratios for the company's 2 most recent years in the noted categories:
1. Profitability Ratios
a. Gross Margin Percentage
b. EBIT Margin Percentage
2. Resource Management Ratios:
a. Age of Inventory
b. Age of Accounts Receivable
c. Age of Accounts Payable
3. Liquidity Ratio:
a. Current Ratio
4. Leverage Ratios
a. Debt-to-Assets Ratio
b. Debt-to-Equity Ratio
c. Interest Coverage
In addition, you have decided to evaluate the Return on Equity (ROE) of the company by calculating the DuPont Ratio, including the Profit Margin, Asset Turnover, and Financial Leverage Ratios.
Required:
As a member of a team, you will produce a 5 to 7-page paper that will show your calculations of each of these ratios for the company's 2 most recent years. In addition, you will provide a brief analysis of each of the ratios. You will also provide a brief evaluation regarding the company's performance as it relates to the four categories listed above, plus the DuPont Equation. Finally, you will discuss how these ratios will help you make appropriate financial decisions as they relate to your role as a financial manager, and also assist in achieving the firm's financial management goals.
In addition, your team will also produce a 7-10 minute narrated PowerPoint presentation using VoiceThread or a similar tool that discusses the analysis of at least one ratio from the each of the four categories above. In addition, you must also discuss your DuPont Equation results. Finally, you must discuss how these ratios can be used to help you make appropriate decisions in your role as a treasurer or controller. All team member must be involved in the narration of the presentations.
As this is a collaborative project, an online collaboration tool (such as Big Blue Button or Cisco Spark) must be used to conduct your team meetings. Evidence must be provided that the tool was used for three weekly team meetings.
As with all papers and projects, APA standards are to be followed for all portions of this paper, including but not limited to proper referencing and citations.