Principles Of Financial Analysis Private Spreadsheet Assignm

Principles Of Financial Analysisprivatespreadsheet Assignment Eastlan

Retrieve the file CFM0318P.XLS. Boldface cell A1 and enter the appropriate values in cells C7 and C17. Enter the appropriate equations, not values, into the following cells: C20, C29, C45, C46, C47, C48, C49, D9, and D16. Print the worksheet. Disregard the information presented in part (g) of the Eastland problem and restore the original balance sheet values. Construct a new balance sheet assuming 2 million common shares were sold to net $25 per share, with the proceeds allocated as follows: $25 million is used to discharge current liabilities, and $25 million is added to liquid assets. Modify cells C52, C53, C54, and C55. Print the worksheet. Retrieve the file CFM2A08P.XLS. Enter the label (words or acronym) in cell A14 which describes the computations reported in cells B14 and D14. Enter the appropriate values in the following cells: B16, D16, B18, and D18. Enter the appropriate equations, not values, into the following cells: B20, D21, B22 (assume a tax rate of 35%), and D27. Print the worksheet. Do not print equations or the contents of each cell. The pages you submit should report final results, revealing the business output (such as dollar values) of a financial statement.

Paper For Above instruction

The given assignment involves working with two Excel files, CFM0318P.XLS and CFM2A08P.XLS, to analyze and prepare financial statements for Eastland Products, Inc., and Amexicorp, Inc., respectively. The tasks demand an understanding of basic financial analysis principles, familiarity with spreadsheet manipulation, and the ability to interpret financial data accurately for decision-making purposes. This paper discusses the detailed steps and rationale behind completing the assignments, emphasizing critical financial concepts such as balance sheet adjustments, calculation of financial ratios, and proper spreadsheet functions.

Introducing Financial Data and Initial Tasks

The initial step involves retrieving the CFM0318P.XLS file and making essential modifications. The instruction to boldface cell A1 and entering specific values in cells C7 and C17 ensures that the key title or overview data is emphasized, aligning with best practices in spreadsheet presentation for clarity and quick reference. Entering formulas—rather than static values—into several cells (C20, C29, C45, C46, C47, C48, C49, D9, D16) facilitates dynamic financial calculations. These formulas likely include ratios, averages, or other metrics critical for financial analysis, which automatically update when source data changes, preventing manual errors and ensuring consistency throughout the worksheet.

Restoring and Reconstructing the Balance Sheet

The instructions to disregard part (g) of the original problem suggest that certain previously entered or calculated data will be ignored or discarded. Subsequently, the user is asked to restore the original balance sheet values, which probably entails resetting cells to their prior states or inputting baseline data. Following this, a hypothetical scenario is to be modeled: issuing 2 million new common shares at a net price of $25 each. This scenario aims to examine the impacts of equity financing on the company's financial position. The proceeds are allocated in specific ways—$25 million toward discharging current liabilities, and another $25 million increasing liquid assets—indicating a strategic adjustment in working capital and liquidity management.

Adjusting Financial Statements and Printing

The modifications require updating cells C52 to C55 with new figures reflecting the equity issuance and asset/liability reallocation. Printing the worksheet afterward provides a snapshot of these adjustments, crucial for presentation or evaluation purposes. The instructions imply that the student should be able to demonstrate understanding of how equity infusions impact the balance sheet, including changes to current liabilities, liquid assets, and overall capital structure.

Analyzing Amexicorp Data

The second part of the assignment involves working with CFM2A08P.XLS. Initially, the user must assign a descriptive label in cell A14 that succinctly summarizes the computations reported in B14 and D14—likely a financial ratio, metric, or calculation title. This step underscores the importance of clear labeling for interpretability in financial analysis.

Subsequently, specific numerical inputs are to be entered into cells B16, D16, B18, and D18, representing actual financial data points from the company’s financial statements or estimates. Following that, formulas—rather than hardcoded values—must be implemented in cells B20, D21, B22, and D27. Notably, a tax rate of 35% applies to calculations involving D21 and B22, which likely pertain to taxable income and tax expense computations. This step demonstrates application of tax considerations in financial modeling, emphasizing accurate fiscal analysis.

Finally, the worksheet is to be printed, excluding the display of formulas or cell content, to produce a clean report containing key financial results. This ensures the report reflects the final, analyzed data without revealing underlying formulas, aligning with professional reporting standards in finance.

Implications for Financial Analysis

This assignment underscores several core principles of financial analysis: the importance of accurate data entry, dynamic formula application for ongoing analysis, the impact of equity issuance on company balance, and the necessity of clear, interpretable financial reports. It also highlights the importance of understanding how changes in assets, liabilities, and equity influence overall company valuation and financial health. The practice of modeling different financing scenarios, as shown with the share issuance example, is fundamental for strategic financial planning and management.

Conclusion

Through these spreadsheet exercises, students develop practical skills in financial data manipulation, ratio analysis, and scenario modeling—key competencies for financial analysts and managers. The precise use of formulas, proper data organization, and clear labeling enhance the accuracy and communicability of financial reports, which are critical to effective decision-making. Mastery of these tasks not only improves technical spreadsheet skills but also deepens understanding of fundamental financial principles, enabling more insightful and strategic financial analyses in professional settings.

References

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  • Penman, S. H. (2012). Financial Statement Analysis and Security Valuation. McGraw-Hill Education.
  • Weston, J. F., Cheh, J. B., & Brigham, E. F. (2000). Managerial Finance. Hinsdale: Dryden Press.
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  • Wikipedia contributors. (2020). Financial ratio analysis. Wikipedia. https://en.wikipedia.org/wiki/Financial_ratio_analysis
  • Investopedia. (2023). Financial Statement Analysis. https://www.investopedia.com/terms/f/financialstatementanalysis.asp
  • Damodaran, A. (2012). Investment Valuation: Tools and Techniques for Determining the Value of Any Asset. Wiley.

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