Jet Task 1 Financial Analysis. Essay Example
Tatiana Safonova-Lynn.
TASK 1 – FINANCIAL STATEMENT ANALYSIS AND CONTROLS
Requirements for Task 1:
A. Prepare a summary report in which you do the following:
1. Evaluate the company’s operational strengths and weaknesses based on the following: In order to evaluate company’s operational strength and weaknesses accurately it is important to have access to more than one year worth of data. The company, of course, will not be evaluated on the basis of couple of ratios, it is very important to analyze all the available information to put pieces of puzzle together to see the overall impression of the company and its attractiveness to creditors, investors and stockholders.
To be able to compare company’s performance we will be evaluating three years period from year to year, for which Horizontal technique will be used; and comparing it with results of company’s biggest competitor. Vertical Analysis technique will be used as a standard way for comparison. Then to see how company does in comparison to the competition, we will use Ratio Analysis in which biggest competitor’s numbers will be reviewed. It is important to have several different analyses to see the entire picture and later to be able to understand where company is and what actions shall be chosen for the improvement of financial situation.
a. Review the horizontal analysis, analyze the results, and discuss operational areas of concern.
First we will use Horizontal Analysis, which is a study of percentage changes in comparative financial statements to look at revenue, selling and operating expenses, income, earnings, assets, liabilities and equity. The reason this method is important is because we can see how company does percentage wise. It gives us better understanding of success then just numbers along. We will be comparing 3 years: year to year in different periods: 8(current), 7 (middle) and the year prior, we will be referring to it as year 6. By looking at current year revenue result we
TASK 1 – FINANCIAL STATEMENT ANALYSIS AND CONTROLS
Requirements for Task 1:
A. Prepare a summary report in which you do the following:
1. Evaluate the company’s operational strengths and weaknesses based on the following: In order to evaluate company’s operational strength and weaknesses accurately it is important to have access to more than one year worth of data. The company, of course, will not be evaluated on the basis of couple of ratios, it is very important to analyze all the available information to put pieces of puzzle together to see the overall impression of the company and its attractiveness to creditors, investors and stockholders.
To be able to compare company’s performance we will be evaluating three years period from year to year, for which Horizontal technique will be used; and comparing it with results of company’s biggest competitor. Vertical Analysis technique will be used as a standard way for comparison. Then to see how company does in comparison to the competition, we will use Ratio Analysis in which biggest competitor’s numbers will be reviewed. It is important to have several different analyses to see the entire picture and later to be able to understand where company is and what actions shall be chosen for the improvement of financial situation.
a. Review the horizontal analysis, analyze the results, and discuss operational areas of concern.
First we will use Horizontal Analysis, which is a study of percentage changes in comparative financial statements to look at revenue, selling and operating expenses, income, earnings, assets, liabilities and equity. The reason this method is important is because we can see how company does percentage wise. It gives us better understanding of success then just numbers along. We will be comparing 3 years: year to year in different periods: 8(current), 7 (middle) and the year prior, we will be referring to it as year 6. By looking at current year revenue result we