For this milestone, you will conduct an
analysis of your chosen company’s financial statements for the last three
consecutive years. Your analysis should include the review and interpretation
of data from the following financial statements: the income statement, balance
sheet, statement of cash flow, and statement of retained earnings. Using your
review of these statements, you will assess the organization’s financial
performance and financial health. Provide quantitative and qualitative support
for your assessment.
Prompt: As a newly hired manager at your
chosen company, you have the first task of reviewing the company’s past and
current financial documents and making initial financial projections so that
the company can begin planning for the upcoming year. Your report will include
several tables, along with a comprehensive narrative describing the
organization’s financial performance and health. Note that, in addition to the
organization’s financial statements and website, other authoritative news sources—such
as annual reports and external sites like Bloomberg—may offer insights that
facilitate analysis or provide information on the organization’s priorities and
Specifically, you must address the
following critical elements from section II of the final project:
A. Organizational Context 1. What key goods
or services does your organization provide, and for whom, where, and why? How
do these features of the organization (e.g., major products or services,
customers, location) help set the boundaries for business decisions? 2. How is
the company organized and managed (by product groups, geographic region,
function, etc.)? How does that affect accounting and financial information and
subsequent business decisions?
B. Recent Financial Performance 1. Assess
what the organization’s consolidated income statements for the last three years
say about its financial performance. Use relevant indicators, graphs, and
spreadsheets to support your narrative. (Include all spreadsheets in an
appendix.) For example, what do the amounts and year-to-year changes in
revenue, operating income, net profit or loss, and earnings before interest,
taxes, depreciation, and amortization tell you? Do any items stand out? 2.
Assess what the organization’s consolidated cash flow statements for the same
time period say about its financial performance. Use relevant indicators,
graphs, and spreadsheets to support your narrative. For example, what do the
amounts and year-to-year changes in cash from operating activities, cash from
investing, cash from financing, and total cash flow tell you? Do any items
stand out? 3. Assess the organization’s underlying financial performance.
Support your answer with the analysis above and relevant research. For example,
is recent performance substantially affected by unusual events such as a major
acquisition or spin-off? Is the business thriving or struggling in its
industry? How do you know?
1. Current Financial Health 1. Assess how
the organization is capitalized and what that tells you about its financial
health. Support your response with relevant graphs, spreadsheets, and
indicators such as cash and cash equivalents, total debt, shareholders’ equity,
current ratio, debt/equity ratio, and days sales outstanding (DSO). For
example, does the organization have enough cash for payroll and other bills?
Does it have the right mix of debt versus equity (stock)? How do you know? 2.
Does the organization have the right amount of cash and other resources (key
people, technologies, reputation, physical assets, etc.) to fuel future growth?
What does this suggest for business decisions? For example, if it has too much
cash, should it pay a large dividend, repurchase its own shares, or reinvest
the excess funds? 3. Assess the financial value of the company using relevant
indicators. What does your assessment imply for future business health and
performance? For example, what is the business’s current market value? What is
its price-to-earnings ratio? What do these suggest about investor perceptions
of the business’s future?
Please include graphs and graphics where
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