Analysis and evaluation of company liquidity

Reference no: EM139646

Accounting for decision-making

Assignment

Length : 2000 words

Student will select a public company and provide a financial analysis of the company based on the selected company’s annual report for the fiscal year 2011.

Your report should include:

A detailed analysis and evaluation of the company's liquidity, solvency and profitability position.

Requirement:

A. Format and referencing

B. Liquidity

C. Solvency

D. Profitability

E. Comment on the information found in the cash flow statement. What are the primary sources and uses of cash? How stable are the major sources of cash? What activities consume the preponderance of the cash?

F. What is the company’s policy regarding revenue recognition? What inventory cost-flow assumption it is using?

G. Based on your analysis what comments can you provide regarding the company’s past performance and its future?

H. Would you invest your personal or corporate assets in the company? Why or why not?

I. Prepare common-sized income statements for the most recent two years, and comment on items which you deem important.

Each answer to B, C and D, should address the following issues:

• Possible causes of change
• Implications of changes and the ratio analysis on financial and operational outcomes
• Recommended course of action where ratios are unfavourable

Students should choose ratios and other techniques that they deem appropriate. A vertical analysis on the company’s Statement of Financial Performance and a horizontal analysis on the company’s Statement of Financial Position as well as comments on implications of changes are expected.

Reference no: EM139646

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