1. Choose any company that you find interesting (note that you may NOT use a company we have discussed in class e.g. Amazon, WestJet, etc.). The company must either use IFRS or ASPE. For ASPE reporting companies you may use your own company's financial statements if you are allowed to submit them as part of this project. Otherwise please use a publicly reporting IFRS based company.
a) Obtain the most recent annual report for your company. The report should contain at least 2 years of income statements and balance sheets (statement of financial position).
b) Justify your choice of company in a paragraph. Why did you choose this particular company?
c) Choose ONE main user / group of users of your company's financial statements. Justify WHY you chose this user. This will be important for the financial analysis portion of this assignment.
d) Perform a BRIEF SWOT analysis for this company. Pick out a maximum of two items from each category. This analysis should serve to frame the accounting discussion by giving it context.
2. Perform a trend analysis (using last year as the base year) using the income statement and balance sheet. Choose 5 itemsin total that would be important to YOUR USER (e.g. a mix of items from the B/S and I/S). Briefly explain why your user would care about each item and interpret each item using your trend analysis. You may of course link the B/S and I/S in this analysis (i.e. you don't have to treat each statement as stand alone). Also note that your trend analysis may include changes from the prior year and % relationships (e.g. an expenses as a % of sales, etc.) and remember that no change from the prior year might be interesting as well.
3. Perform a financial analysis using ratios and other methods you see fit. Please choose a maximum of 4 calculations.
a) For each calculation justify why you chose to include that particular calculation for your company.
b) Provide support for each calculation (e.g. an appendix that a reader could follow)
c) Interpret and discuss each calculation. What does it mean? What can you infer about the company?
4. Analyze your company's cash flow statement by discussing and analyzing your top 3 observations. Do not choose net income or total cash on hand as your observations.
a) Also, generally discuss whether you agree or disagree with the investing and financing strategies that your company appears to be employing.
4. Identify 2 (two) items NOT included in (or derived from) the financial statements that you think would be important to YOUR USER.
Discuss your reasons for believing that these two items about the company would be important in making decisions.
5. Compare your company's financial statements with those of a competitor.
a) Justify your choice of competitor by analyzing 3 main reasons. In other words what are the 3 reasons you think this company is a good comparison?
b) If you were making a decision to invest in one of the two companies, which company would you choose? Why? (Note: your answer in this section must include THREE financial issues, but your answer need not be limited to a discussion of financial issues.)
6. Please make an overall conclusion / wrap up your discussion. You must include this and it must be insightful.
Submission Notes:
1. You must submit the pages from the annual report / financial statements that you used to create your analysis.
2. Your analysis must include page references to relevant portions of the annual reports if needed, and the relevant portions of the annual reports must be highlighted if needed. Your report must also contain appropriate quotation marks for quoted material and appropriate citations for material taken from sources outside the financial statements.
3. You MUST reference your appendices in the body of your report. For example, if you calculate the current ratio and have an appendix for this calculation please including something like the following: "As per Appendix A, the current ratio is 2:1".
4. All appendices MUST be labeled appropriately (e.g. Appendix A: Current Ratio).
5. Please include a table of contents.
6. Your analysis is limited to 10pages plus reasonable appendices, and must be typed, double-spaced, and have at least 11-point font and 1 inch margins.