ACCT 2101 Financial Statement Analysis Project : Horizontal and Vertical Analysi


Knowledge: The assignment will help you apply knowledge learned related to
  • Horizontal and vertical analysis
  • Ratio analysis for liquidity, solvency, profitability, and stock
  • Income Statement components of Revenue, Cost of Goods Sold, Gross Margin, Operating Expenses, and Net Income
  • Balance Sheet components of Short-term Assets, Long-term Assets, Current Liabilities, Long-term Liabilities, Retained Earnings, and Stockholders’ Equity
  • Limitations of Financial Statement Analysis

Assignment Summary:

Throughout chapter 9 we will be evaluating the performance of a company named Milavec Company. We do not have a lot of details about the company’s operations, but we do have an Income Statement and Balance Sheet for years 3 and 4. We do not know the company’s industry, but we can determine some facts about the company based on the information presented. Your job will be to unravel the information available, analyze it, and draw some conclusions.

You are required to produce (at least) three analytical assessments and a summary of conclusions. The final result of your work will be submitted to the appropriate Assignments Folder in D2L. The objective of the project is to learn how to do financial statement analysis using the techniques we will cover in class.

Select your point of view – Submit to Assignment folder named “Milavec Work” due by December 1st.

You will be working through the Milavec Financial Statements from one of 3 perspectives or points of view (POV)

  • Investors considering investing $100,000, who will purchase Preferred Stock
  • Lenders considering loaning $100,000 for a 5-10 year term
  • Internal Management tasked with increasing profits over 3 years by 5%

Develop a recommendation and Submit a summary of your analysis and conclusions/recommendation to the D2L Assignment folder you used previously.

Produce a summary report of your conclusion about Milavec, including the recommendation you make for your chosen point of view. (For example, if you are using the Investor POV you would recommend “yes, invest” or “no, do not invest.”) Provide the analytical tools you used (three or more) that support your conclusion or recommendation. Be sure to include a description of your analysis in addition to the computational work. Your description should tell the significance of the tools and their results and show how these helped you reach a decision.

Criteria for Success:

To maximize your points earned, please be sure to complete all parts of the assignment.

Good summaries clearly state the recommendation you are making, and the recommendation is then followed by defined or named analytics. Each analysis includes clear computations and a brief description. Both clarity and creativity tend to be valued by the readers. When used appropriately, charts, graphs, and visual aids improve your one-page summary.

The income statement and the balance sheet for year 3 and year 4 are in the next page.

Read less

Leave a Reply

Your email address will not be published. Required fields are marked *