Project 1: Analyzing Financial Statements

Culture, climate and ethics 4

Step 2: Review and Practice

Maryland Creative Solutions (MCS) has provided you with background material on how its teams approach financial analysis. Using the  Project 1 Review and Practice Guide , review the structure and purpose of the income statement and balance sheet. Make sure you also are familiar with the DuPont equation as well as these five groups of financial ratios: liquidity, efficiency, leverage, profitability, and market value. Study how to perform common-size and cash flow analyses. Finally, apply what you have learned so far by completing the exercises referenced in the  Project 1 Review and Practice Guide.

You must review the material provided by MCS and do the practice exercises so that you are

· prepared to have informed discussions with your team about company financial statements,

· understand what the statements reveal about operational efficiency, and

· can use this information to make recommendations for improvements.

Complete this review and practice by the end of Week 1.