Financial Statement Analysis
Financial Statement Analysis Project
You (or your group) are required to conduct a comprehensive financial statement analysis of two companies. You may choose either to compare WalMart and Target or Coors and Boston Beer Co. You may work individually, or in groups of two members. The purpose of this project is to provide you an opportunity to apply the analytical techniques studied in Chapters 3, 9 and 11. In conducting this analysis, take the perspective of a common stock investor. You will be interested in all aspects of the firms’ performance. Comment on the important trends and achievements of each firm. Also explicitly compare the performance of the firms. Be sure to get to know the industry and the firms’ businesses. Look behind the numbers. That is, what economic factors explain the trends and differences that you observe?
Your report should contain the following:
1. A title page.
2. The narrative (a maximum of four typed pages). Given that you are limited to four pages, you should not comment on every trend (or lack thereof) that you observe. Rather, your narrative should contain the major “stories” that your analysis reveals.
3. Citations of outside references.
4. Appendices. Include the results of all of your calculations (even if not mentioned in the narrative): all ratios discussed in class, the vertical balance sheet, the horizontal income statement and the vertical income statement.
In preparing the narrative, consider the following:
0 The firms and their industry;
1 A balance sheet analysis that includes the vertical balance sheet, debt ratio, current ratio and acid-test ratio;
2 An income statement analysis that includes the horizontal and vertical income statements, ROI, the DuPont Model, ROE, and times interest earned.
3 An analysis of the statement of cash flows.
4 An activity analysis including number of days’ sales in accounts receivable and inventory and PPE
You (or your group) are required to conduct a comprehensive financial statement analysis of two companies. You may choose either to compare WalMart and Target or Coors and Boston Beer Co. You may work individually, or in groups of two members. The purpose of this project is to provide you an opportunity to apply the analytical techniques studied in Chapters 3, 9 and 11. In conducting this analysis, take the perspective of a common stock investor. You will be interested in all aspects of the firms’ performance. Comment on the important trends and achievements of each firm. Also explicitly compare the performance of the firms. Be sure to get to know the industry and the firms’ businesses. Look behind the numbers. That is, what economic factors explain the trends and differences that you observe?
Your report should contain the following:
1. A title page.
2. The narrative (a maximum of four typed pages). Given that you are limited to four pages, you should not comment on every trend (or lack thereof) that you observe. Rather, your narrative should contain the major “stories” that your analysis reveals.
3. Citations of outside references.
4. Appendices. Include the results of all of your calculations (even if not mentioned in the narrative): all ratios discussed in class, the vertical balance sheet, the horizontal income statement and the vertical income statement.
In preparing the narrative, consider the following:
0 The firms and their industry;
1 A balance sheet analysis that includes the vertical balance sheet, debt ratio, current ratio and acid-test ratio;
2 An income statement analysis that includes the horizontal and vertical income statements, ROI, the DuPont Model, ROE, and times interest earned.
3 An analysis of the statement of cash flows.
4 An activity analysis including number of days’ sales in accounts receivable and inventory and PPE