Assignment 3: Understanding the Numbers for Better Decisions
It is the management’s responsibility to maximize shareholder
wealth as it is based on the organization’s future cash flows. To
accomplish this, managers have to understand how to use financial
statements for analysis.
In this assignment, you will explain the importance of the
statements to the financial reporting process and management
decisions.
Tasks:
Locate the financial statements of a U.S. publicly-traded company of your choice (the company must have inventory and accounts receivable) by visiting the organization’s Web site to locate the investor section. Or you may use one of the following Websites:
U.S. Securities and Exchange Commission
Yahoo Finance
Google Finance
Review the information presented in the financial statements of
the company you selected.
Using the company you selected, calculate one ratio from each
ratio category located at this Financial Ratios resource. Complete
a trend analysis of each ratio for a three-year period.
Describe what the trends you see for your company based on your
ratio analysis. What does this mean for the company?
Compare your company’s ratios with those of the industry it
is in.
Analyze the financial reporting information and the financial health of the company with the help of the calculated ratios.
Submission Details:
Write a 2–3-page research paper explaining each selected ratio,
the ratio category, and your individual analysis of the company as
compared to the industry and the time sensitive analysis.
Include a Microsoft Excel Spreadsheet with your relevant
calculations.
Apply APA standards to citation of sources.
By the due date assigned, save your report as
M1_A3_lastname_firstinitial.doc and upload it to the Submissions
Area. For example, if your name is John Smith, your document will
be named SmithJ_M1_A3.doc.
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