Financial Statement Analysis Assignment Sample

Assignment Task

Assignment

Select One main public-listed company and one related public-listed company as reference. Additionally, for the Main company you chose, you are to select 2 financial years to analyse.

Note: There is no need to select 2 consecutive financial years. You may select any 2 financial years of your choice to analyse as long as they add color to the assignment guides and questions below.

You are to analyse the MAIN company’s annual report, focusing mainly on the income statement, balance sheet and if needed the cashflow statement, as well as the relevant notes to the financial statement in the annual report.

Guidance

Your analysis could cover, among other things, the following:

Note: This is only a brief list of suggestions and is by no means exhaustive. Other than point 1 & 2 below which must be in your analysis, the other points depend on whether they are relevant to the financial statements.

1. Understanding the company. What is their business model? Do they only have 1 business segment? Where do they do their business in? Who are their consumers/customers? Have their business evolve over the years?

2. Apply, calculate and comment on some of the financial ratios you have learned during this course on the MAIN company and the RELATED it company.

a. You could compare how the ratios changed for the 2 financial years and also compare how the ratios differs for the MAIN and RELATED company.

b. Revenue (top-line) and cost growth for the MAIN company. Is revenue growing as a faster rate than operating and/or cost? Why or why not? What was/were the main driver(s) for the growth in revenue and operating cost? Do you think that the growth will continue in the future?

c. Does the MAIN company have any debt obligations? Is it in a good position to meet this debt obligation?

d. Does the MAIN company seem to be holding excess cash, receivables, inventories or other unproductive assets?

3. For the MAIN company, did the company made or plan to make any major investment? This could be in either of the financial year that you chose. How is this showing in the balance sheet and/or income statement?

4. Did the MAIN company have any (frequent) “non-recurring” items in its income statement? What were these and how did they affect the income statement?

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