Financial Statement Analysis Project

The goal of this project is for you compare and contrast two companies’ financial statements. Ultimately, you will use the financial statements to determine which company is a better long-term and separately a short-term investment. Your decision should be primarily upon the financial information presented in the financial statements. In addition, you may consider the current stock selling price.

To complete the project you will need to obtain the most recent 10-k from two companies in the same industry. Four documents are required for this assignment:

A. Upload the most recent 10-k for the first company

B. Upload the most recent 10-k for the second company

C. 1 to 2 page well written summary of your short and long-term decisions. (You should reference your Excel document in your summary)

D. The Excel document you used to complete your analysis. The Excel document should be well formatted and easy to follow. (Something you would be willing to turn into your boss or client).

You should use Excel to complete all analyses. At a minimum you should consider the following inputs into your decision:

1. Create common-sized Balance Sheets and Income Statements (Show all line-items on the balance sheet as a % of assets and all line-items on the income statement as a % of sales).

a. Balance Sheet (These can be completed in conjunction with 2-7)

i. Compare and contrast

a. % of current assets

b. % of current liabilities

c. % of equity compared to debt

d. Etc.

b. Income Statement (These can be completed in conjunction with 2-7)

i. Compare and contrast

a. Gross margin

b. Profit margin

c. % of admin expenses

d. Are there any non-recurring items?

e. Etc.

2. Perform a Profitability Analysis and Interpretation (chapter 3)

3. Perform a credit risk analysis and interpretation (chapter 4)

4. Analyze the Revenue and Accounts Receivable (chapter 5)

5. Analyze the inventory and PPE (chapter 6)

6. Analyze the liabilities (chapter 7)

7. Analyze the equity (chapter 8)