INTRODUCTION TO ACCOUNTING AND FINANCE ASSIGNMENT
FINANCIAL STATEMENT ANALYSIS -
Thank you for helping your client with the firm's first set of financial statements. That was a great help, allowing the firm to get on with what it does best - manufacturing prefabricated homes.
It is now 3 years later - the middle of January 2022. Your client has provided you with a complete set of financial statements for the last three years (shown below), and has asked for help in analysing and interpreting the firm's performance. The client has heard about various financial ratios which can be used aid in the analysis of financial statements, but doesn't know now to calculate them or interpret them, and has you to help with this.
Before you start analysing the firm's financial statements, you will need to obtain industry averages for each of the standard financial statement ratios. These are also provided
Your task:
1. Calculate the ratios shown below, for each of the last three years. Enter the values in the white cells below.
2. Analyse the firm's performance over the last 3 years. Identify any strengths or weaknesses, in terms of positive or negative trends.
3. Analyse the firm's performance in comparison to industry averages for each of the ratios, identifying any apparent strengths or weaknesses.
4. Based on your answers to Questions 2 and 3, summarise the firm's performance in terms of profitability, efficiency, liquidity, leverage and potential for investment.
5. Briefly explain to the client any possible problems with your analysis that the client should bear in mind.
Attachment:- Assignment File.rar