Assignment : Understanding the Numbers for Better Decisions
It is the managements responsibility to maximize shareholder wealth as it is based on the organization's future cash flows. To accomplish this, managers have to understand how to use financial statements for analysis.
In this assignment, you will explain the importance of the statements to the financial reporting process and management decisions.
Tasks:Locate the financial statements of a U.S. publicly-traded company of your choice (the company must have inventory and accounts receivable) by visiting the organization's Web site to locate the investor section.
Or you may use one of the following Websites:
U.S. Securities and Exchange CommissionYahoo Finance(Recommended Type the ticker symbol on the top to search for the company > Financials> Income statement> copy the statement and paste to the Excel file.
Do the same procedures for balance sheet. Make sure these statements are in the same file but in different tabs. Then, you can calculate financial ratios using Excel instead of manual.)
Google Finance Review the information presented in the financial statements of the company you selected. Using the company you selected, calculate one ratio from each ratio category located at this Financial Ratios resource.
Complete a trend analysis of each ratio for a three-year period. Describe what the trends you see for your company based on your ratio analysis. What does this mean for the company?
Compare your company's ratios with those of the industry it is in.
Analyze the financial reporting information and the financial health of the company with the help of the calculated ratios.
NOTE: Please pick a non-financial company. Manufacturing companies would be preferred. (The reason is that other industries might use different accounting items which are not the same as textbook.)
Submission Details: Write a 2 to 3-page research paper explaining each selected ratio, the ratio category, and your individual analysis of the company as compared to the industry and the time sensitive analysis. Include a Microsoft Excel Spreadsheet with your relevant calculations.