Reference no: EM132667969
You need to select three companies from different industries, a company from airline, a company from telecommunication, and a company from the energy. One company should be from Europe, another from North America and third from Asia, and then collect information on the last three years from 2017 to 2019.
The first purpose of this assignment is to increase your understanding and appreciation of the basic composition of the financial statements of companies from the airline, telecommunications and energy sectors relative to the general composition (see the in-class notes and discussion outlining the general composition).
The second purpose of the assignment is to enhance your understanding and ability to assess the quality of the financial statements.
Basic instructions:
a) Collect the 2017, 2018 and 2019 financial statements for Emirates Airlines, Etisalat, and Dana Gas.
b) Select three publicly listed firms from each of the airline, telecommunications, and energy sector firms from around the world. One from Europe, one from North America and one from Asia. Collect the 2017, 2018 and 2019 financial statements of all three additional publicly listed airline, telecommunications, and energy sector firms your selected.
Required:
Create a basic vertical common size analysis of the (a) balance sheet; and (b) income statement for each year (i.e., 2017, 2018, 2019). For the balance sheet focus on the aggregated amounts of: (a) current assets; (b) non-current assets; (c) non-interest-bearing liabilities; (d) interest-bearing liabilities; (e) capital component; and (f) retained earnings and reserves. For the income statement focus on the: (a) gross profit; (b) net operating profit; (c) EBIT; (d) EBT; and (e) net income for each firm.
Briefly comment/summarize (no more than 1,200 words) key differences in the composition of the balance sheet and incomes statement between (a) the firms and (b) industry sectors with respect to the basic composition. Explain reasons for any differences.
Calculate the balance-sheet-based accruals ratio for all firms for 2017, 2018 and 2019.
Calculate the cash-flow-based accruals ratio for all firms for 2017, 2018 and 2019.
State and explain which firms and sectors had the highest (lowest) earnings quality in 2017, 2018 and 2019; and comment on any trends in earnings quality for each firm (limit to 500 to 1,000 words).
You are required to submit your work in MS Word for all written components. For the calculations you can provide in a MS Word file or MS Excel file.