Financial and Investment Report Analysis

finance

Description

1.         Obtain the most recent annual report for two companies in the industry. The reports should contain at least three years of income statement data and two years of balance sheet data. Please tell me which company will serve as your “base company” and which company will serve as your “comparison company” (Hint: the two companies must be in the same industry. The method to find annual report is introduced in the Appendix). 

2.         Analyze at least 3 (three) items on the income statement for your base company that would be important to an investor, and discuss whether your company’s performance related to these items appeared to be improving, deteriorating, or remaining stable. Justify your answer.

3.         Analyze at least 3 (three) items on the balance sheet for your base company that would be important to an investor, and discuss whether your company’s performance related to these items appeared to be improving, deteriorating, or remaining stable. Justify your answer.

4.         Analyze your base company’s investing and financing activities for the most recent year as identified in the statement of cash flows, specifically identifying the two largest investing activities and the two largest financing activities. Discuss whether you agree or disagree with the investing and financing strategies that your company appears to be employing.

5.         Identify 2 (two) items not included in (or derived from) the financial statements that you think would be important to someone considering whether to invest in your company. Discuss your reasons for believing that these two items about the company would be important in making an investment decision. (Hint: you might want to consider items discussed in other business classes.)

6.         Compare your base company’s financial statements with those of the second company in the industry. 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 some financial issues, but your answer need not be limited to a discussion of financial issues.)

Note:

1.         You must submit the entire annual report for each company being discussed.

2.         Your analysis must include page references to relevant portions of the annual reports, and the relevant portions of the annual reports must be highlighted. Your report must also contain appropriate quotation marks for quoted material and appropriate citations for material taken from sources outside the financial statements.

3.         5 pages, and must be typed, double-spaced, and have at least 11-point font.


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