Understanding financial statements is paramount for anyone engaging in the world of business. These documents serve as the financial roadmap of a company, offering vital insights into its fiscal health and performance. Do you want to know where a company has been, expectations for the future, and insights into why certain decisions were made? Financial statements along with an annual report can tell you all you need to know if you know how to read them.
Estimated Time for Completion: 3-4 hours
Target Course Objectives
Identify key components of 3 financial statements and an annual report.
Analyze and evaluate financial performance based on a company’s financial statements and annual reports.
Instructions
This module will outline the three primary financial statements companies use. Now that you have selected the non-profit or company you are “consulting” for, it’s time to get to know a little more about them. For this assignment, you will need to review the posted videos on each financial report and summarize the key takeaways of an annual report
Complete all video reviews for each financial report.
List the sources and website links you used for research.
Craft a one-page summary of your company’s annual/quarterly report. Some questions to consider:
What are the important metrics described in the report?
Based on the lessons in this module, what are the key takeaways from each financial report? Is the company currently profitable, what are the highest expenses, and what is the company’s “current ratio”?
Do you have any thoughts on where the company is succeeding or where they may want to make a change?
Select a Company: Choose a publicly-traded company of your choice or one where you can access company financial reports. You can usually find their financial statements in the “Investor Relations” section of the company’s website or through financial news websites.
Gather Financial Statements: Obtain the company’s most recent annual report, which typically includes the following financial statements:
Income Statement (or Profit and Loss Statement)
Balance Sheet
Annual Report
Conduct 2 horizontal and 2 vertical analysis on both the income statement and balance sheet. Write a sentence on each analysis calculation you completed.
Some places to start would be identifying the following.
Total Revenue
Cost of Goods Sold (COGS)
Gross Profit
Operating Expenses
Operating Income
Net Income
Earnings per Share (EPS) (if applicable)
Examine the Balance Sheet: Move on to the balance sheet. Conduct 2 horizontal and 2 vertical analysis.
Assets (Current and Non-current)
Liabilities (Current and Non-current)
Shareholders’ Equity
Study the Annual Report: Finally, analyze the company’s annual report. Identify and explain the following:
Operating Activities and highlights
At least 2 key metrics or findings identified from the report
Identify what the company plans for the future.
Write a Financial Analysis Report: Summarize your findings in a financial analysis report. Provide an overall assessment of the company’s financial performance (e.g. identifying profit or loss), highlighting strengths and weaknesses.
Parameters:
Length: Maximum 1 page. One-page financial analysis summary outlining the key takeaways from each financial report and at least one additional market factor from the company’s annual report.
Format: Word document
Number of sources required: Minimum of 1
Academic Style Guide Requirements: N/A
Submit this assignment by Wednesday at 11:59 pm Central.