Project Milestone
Overview:The final project for this course is the creation of a financial statement analysis. A business's financial statements offer important insights into its performance and financial health that help guide internal managers' and external investors' resource allocations. For a financial analyst, being able to accurately read and interpret these statements is a critical tool in making sound recommendations to clients or company executives. Analysts also need to understand how the limitations of these statements and the legal and ethical obligations that underpin them impact business decisions.
Prompt: For this milestone, you will submit a draft of a portion of the analysis step, Section F: Benchmarks. You will analyze your chosen company's performance relative to the industry. You will be expected to find one peer company that operates in the industry of your chosen company and perform a side-by-side analysis of the same ratios you performed in Milestone Three. You may use the Yahoo! Finance and the U.S. Securities and Exchange Commission websites to gather the information for the peer company.
Specifically the following critical elementsmust be addressed:
II. Analysis. Use this section to present your findings based on quantitative and qualitative analysis of the financial statements. Include a copy of the financial statements and any ratios or analysis in an appendix as support for your discussion. In particular, this section should cover:
f) Benchmarks. Analyze the company's performance relative to the industry average. The average should refer to the same period as the financial statements being analyzed (or as close as possible). Specifically, you should answer:
1. Why is benchmarking importantin analyzing financial statements and evaluating a company's overall performance? In other words, does analyzing a specific company's financial statements in isolation provide you with sufficient information for analyzing its overall performance? Why or why not?
2. What do benchmarking comparisonstell you about how the selected company is performing relative to industry peers? Support your answer with specific examples from your analysis and industry research.
3. How do your company's financial statements compare to industry standards in terms of legally and ethicallycommunicating necessary information to stakeholders? Justify your response using specific examples and referencing relevant legal and ethical guidelines.
Guidelines for Submission:Your paper must be submitted as a 1-2 page Microsoft Word document with double spacing, 12-point Times New Roman font, one-inch margins, and sources cited in APA format. Attach all relevant calculations and analyses as an appendix.