Choose one public company in the U.S. that you are interested in and find the industry peer that closely resemble the target company’s line of business.

accounting

Description

Term Project – Financial Statement Analysis 

1. Choose one public company in the U.S. that you are interested in and find the industry peer that closely resemble the target company’s line of business. 

2. Find the latest five years’ annual reports of the firm. You can also go to SEC website to search for 10-k filings. 

3. Compile comparative financial statements. Apply year-to-year change analysis on important items of the financial statements. Construct the vertical common-size income statement and common-size balance sheet by expressing each item in the financial statements as a percentage of a relevant total within the same year. Explain the change of trend in your analysis.

4. Calculate financial ratios for the target firm and the peer using past 5 years of data. The ratios are grouped into four categories: Liquidity, Profitability, Long-term solvency and investor-oriented ratios. These ratios will provide the basis for your analysis of the financial performance of the company. Based on the financial performance, indicate if the company is worthwhile for a long-term investment. 

5. Each student need to submit a report to summarize your findings. Key discussion items could include but not limited to the following points:

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