Guidance for Completing the Financial Analysis
 
[Print Version]

Introduction

In order to evaluate your understanding of the use financial information in decision-making, you are asked to assume the role of a financial analyst.   Your team will study the profitability, stability, solvency, and potential for growth of a publicly-held company from the perspective of outside users consisting of investors and creditors.  Try to think of your analysis as a form of story telling.  You are going to tell the story of what your company has been doing for the past three years and where you think it will be going in the future.

Before you begin to create your written outline and undertake the analysis of your company’s financial statements, you will need to compile the relevant information.  The lists presented in this document are intended to serve as guides to help you accumulate useful information and to organize that information effectively.  Not every item listed will be relevant to your company.  Further, based on your outside resources, you many wish in include additional facts or opinions not covered in the document.  Be sure to cite any outside resources used were necessary.

Remember that your team’s audience is investors, who want help making investment and lending decisions. The suggested content outlined below is designed to you develop a successful presentation for investors and creditors.  Each individual team member’s presentation should focus on one or two of the six topics listed below.  No two members of a team should present the same information.  Ideally, the team, as a whole, will adequately address all of the suggested elements. 

Part 1. Company description ( 2 to 3 minutes)
 

Part 2. Company's industry and competitive strategy (3 to 5 minutes)
 

Part 3. Overview of the annual reports (5 to 7 minutes)
 

Part 4. Assessment of the company's general condition ( 5 to 8 minutes)
 

Part 5. An ethical audit of the company (2 to 3 minutes)
 

Part 6. Conclusions (about 2 minutes)