Financial statement analysis (30%) – Determine the future of the company by analysing the performance of the company.(just finish this part )
FSA is NOT about calculating ratios. It is about establishing a method for comparing the health of the company against its past and peers. Please do not spend most of your time doing the calculations; they do not carry a lot of marks. You should instead focus more on the interpretation and analysis of the ratios.
You should cover at least 4 ratios; one of them must be an analysis of the return on assets using the Du Pont System.
Ensure that you show all calculations and footnote the page number of the annual report where you obtained the figures.
2 Time series analysis
You need to do a time series analysis, looking back at least 3 years.
You only need to calculate the ratios for 1 year.
If your calculated ratios within 10% of the ones calculated in DatAnalysis Morningstar database, you may use all the figures from the database (for time series and cross-section).
If your figures are significantly different, you will have to calculate all the figures and show all workings.
Do not provide definitions for the ratios. Go straight into the discussion.
Explain the changes in the ratios with reference to company’s history or events. Do not merely state that the figures are improving or deteriorating.
3 Cross-sectional analysis
For cross-sectional analysis, it is unlikely that you will find a perfect match. You will have to look at all the four areas of:
4.Scope of operations
Do not merely state that the company is performing better or worse than its peer. State specific action of the company that contributed the better or worse performance.
Calculations of ratios without analysis and comment will receive a null grade for this section