Analysis of financial statement considering ratio analysis and giving recommendation.
Submit a two-page 600 to 700 word written report explaining how you would analyze the financial performance of a publicly traded corporation (Y Corporation) if you were provided with three years of Y Corporation's audited financial statements, and a listing of their industry's key financial and ratio performance for the same period. Define what specific information you would analyze and your general approach for analyzing and presenting this information. Add any caveats or disclaimers that would issue with the report.
End of Mid-term Examination
ENCLOSURE 1
(The Balance Sheet and Income Statement for Spectrum, Inc. is presented below for your use in solving problem 3)
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Spectrum, Inc.
BALANCE SHEET (000)
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Cash
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$500
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Accounts receivable
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1,500
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Inventories
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500
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Current assets
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2,500
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Net fixed assets
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5,000
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Total Assets
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$7,500
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Accounts payable
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1,200
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Bank note
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300
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Total current liabilities
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1,500
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Long term debt
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4,000
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Common stock
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300
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Retained earnings
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1,700
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Total liabilities and owner\\'s equity
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$7,500
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Spectrum, Inc.
INCOME STATEMENT (000)
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Net sales
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$8,500
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Cost of goods sold
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3,400
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Gross profit
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5,100
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Operating expenses
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2,900
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Net operating income
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2,200
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Interest expense
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580
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Earnings before taxes
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1,620
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Income tax (34%)
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551
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Net income
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$1,069
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