Financial Statement Analysis Assignment

Assignment Task

The first experiential learning assignment is on Financial Statements Analysis, wherein the assignment is to select a company of your choice (preferably the company you are working for or if your company is unlisted then you may choose another listed company in the same industry or alternatively you may choose the major suppliers or customers of your company) and download the financial statements data (balance sheet, income statement, cash flow statement) for that company for a period of 5 years and then do the horizontal analysis, vertical analysis and ratio analysis (all relevant ratios) for the company using Microsoft Excel. You are expected to do the Horizontal and Vertical Analysis on the balance sheet and income statement only. This will be an individual assignment, meaning each and every student is expected to do independent and original work as per guidelines elaborated below.

Here is how this assignment will work:

1. Please replay all the pre-recorded content as well as recordings of live classes relating to financial statements analysis (including horizontal analysis, vertical analysis, ratio analysis). This will help you to review and understand all the relevant concepts relating to horizontal analysis, vertical analysis, and ratio analysis. In addition to doing horizontal and vertical analysis (most recent 5 years), I would like you to calculate (using excel) at a minimum the following ratios: current ratio, cash ratio, turnover ratios, solvency/ leverage ratios such as debt to equity ratio, profitability ratios such as net profit margin, ROE, etc. There is no upper limit for the number of ratios you want to analyze but at a minimum you should cover at least 6 important ratios across all the categories. Please do this for the most recent 5 years as well. Please chart all your analysis using either line charts or other appropriate charts and graphs. Please include a short commentary on your analysis/ charts that you have done, including the ratios that you have analyzed, i.e. your analysis and explanation of what is going on. What is the significance of the trend? Is the company doing well or not doing well? Etc.

2. Data driven story telling – you need to master this art to survive and excel in today's business world! What is data driven story telling? There are three essential elements to data driven story telling:

• Data itself: data should be robust, that is why I am asking you to only get the data from Prowess or Bloomberg. Analysis itself should be sound. That is why I am asking you to review the recordings, etc.
• Story line: Narrative; for each chart you have to interpret the chart and give your views on what it is telling and also provide some idea on the insights from the chart and also give recommendation on actions the company should take
• Data Visualization: We need to present the data effectively so that managers who have less time can still get a clear picture and thereby they can make correct decisions. How? By using the appropriate charts, graphs, diagrams, etc.

3. Please choose a company that is relevant from your work perspective for this assignment, such as the company you are working for its suppliers, customers, or other companies in the same industry. You may also analyze a competitor for the firm (or industry leader) in addition to your chosen company.

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