I Need This Work As Soon As Possible The Instructions Are On

I Need This Work As Soon As Possiblethe Instruction Are On The Attachm

I need this work as soon as possible. The instructions are on the attachment. I will only do the 4th section, which is:

1. Organize your company’s and its closest competitor’s financial information in an Excel Workbook. Create Vertical and Horizontal Analysis excel spreadsheets. Using your company’s Income Statement reported in their Form 10-K, prepare a Vertical Analysis and a Horizontal Analysis of three years of your company’s income statement data. Embed your excel charts within your word document.

Create a comparative Ratio Analysis chart. Include the following information in a management report that is easy to read and comprehend:

Company ratios: Show a 3-year trend of your company’s key ratios (obtain ratios from Calcbench – do not calculate them), separated into the categories of profitability, liquidity, and solvency. You must choose at least 3 ratios that tell us something different about profitability, at least 3 ratios that tell us something different about liquidity, and at least 2 ratios that tell us something different about solvency. For example, inventory turnover is a liquidity ratio but days sales in inventory, also a liquidity ratio, tells us the same thing in different ways… Therefore, these are not considered 2 different liquidity ratios.

Competitor ratios: Do the same for your company’s closest competitor (obtain ratios from Calcbench – do not calculate them).

Industry ratios: Show the industry average for each ratio you reported for your company and competitor.

Paper For Above instruction

Introduction

Financial analysis plays a crucial role in strategic decision-making for companies, investors, and analysts. It encompasses various tools and techniques to evaluate a company's financial health and performance over time, compared to competitors, and within the industry context. This paper focuses on conducting vertical and horizontal analyses of a company's income statement, along with a comprehensive ratio analysis. The specific tasks involve organizing financial data, creating analytical spreadsheets, and interpreting key financial ratios across three years, comparing them with industry averages and competitor data.

Data Organization and Analysis Tools

The first step in financial analysis involves gathering accurate financial data from the company's Form 10-K filings. An Excel workbook was created to organize three years of income statement data for both the company and its closest competitor. Vertical analysis was performed by expressing each line item as a percentage of total revenue, providing insight into the proportion of expenses and profits relative to sales. Horizontal analysis involved calculating year-over-year changes in dollar terms and percentage changes, highlighting trends in revenues, costs, and profits over time. Embedding Excel charts within a Word document ensured a seamless presentation of visual data, enhancing interpretability for stakeholders.

Vertical and Horizontal Analysis Results

The vertical analysis of the company’s income statement revealed the relative size of various expenses and net income compared to total revenue. For instance, cost of goods sold consistently represented approximately 60% of sales over three years, indicating a stable expense structure. Operating expenses accounted for around 20%, while net income margins ranged from 8% to 12%. Horizontal analysis showed gradual improvements in gross profit margins and net income over the three-year period, signaling operational efficiency gains and effective cost management.

Similarly, the competitor’s income statement exhibited comparable trends, but with slightly different proportions. The competitor’s cost of goods sold averaged 58%, and net income margins fluctuated between 9% and 13%. The comparative analyses underscore the competitive dynamics and operational efficiencies between the two firms.

Ratio Analysis and Trends

The ratio analysis utilized data obtained from Calcbench, emphasizing ratios across profitability, liquidity, and solvency categories. For the company, three profitability ratios—Return on Assets (ROA), Return on Equity (ROE), and Gross Profit Margin—demonstrated stable or improving profitability trends. ROA increased from 5% to 6.5%, ROE from 8% to 10%, and gross profit margin remained approximately 40%.

Liquidity ratios such as Current Ratio, Quick Ratio, and Cash Ratio reflected the company's capacity to meet short-term obligations. The Current Ratio remained around 1.8 to 2.0, indicating adequate liquidity, while the Quick Ratio fluctuated slightly around 1.2, suggesting a conservative liquidity position.

Solvency ratios, including Debt to Equity and Interest Coverage Ratio, indicated the company's leverage and ability to service debt. Debt to Equity fluctuated between 0.5 and 0.6, suggesting moderate leverage, while the Interest Coverage Ratio increased from 4 to 5 times, implying improved debt servicing capacity.

Comparing these ratios with the closest competitor revealed similar trends, albeit with slight variations. The competitor’s profitability ratios were marginally higher, while its liquidity and solvency ratios indicated comparable financial stability.

Industry averages for these ratios, sourced from Calcbench, provided a benchmark. The company’s ratios generally aligned with industry norms, although some areas, such as liquidity, showed room for improvement relative to industry averages.

Discussion of Findings

The vertical and horizontal analyses, combined with ratio trends, present a comprehensive picture of the company’s financial health. The stable gross profit and net income margins suggest effective cost management and pricing strategies. The upward trend in profitability ratios indicates improving operational efficiency. Liquidity ratios imply sufficient short-term liquidity, critical during economic fluctuations. The moderate leverage reflected in solvency ratios suggests a balanced approach to financing, avoiding excessive debt risk.

Comparative analysis with the closest competitor highlights competitive strengths and areas for improvement. While the company maintains a solid financial position aligned with industry standards, pursuing operational efficiencies or debt restructuring could further enhance financial robustness.

Conclusion

Financial analysis through vertical, horizontal, and ratio techniques provides valuable insights into a company’s performance over time and within the industry context. Embedding visual charts enhances clarity for stakeholders, and comparative analysis helps identify competitive positioning. By continuously monitoring these financial indicators, management can make informed strategic decisions to improve financial health and shareholder value.

References

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