Solved: BAT4M Financial Analysis Project

Summative Overview Your summative involves the analysis of a public Canadian corporation with shares trading on one of the Canadian stock exchanges. You are required to complete an in depth, written report on a corporation of your choice. Manufacturing, merchandising and service companies are suggested. Bank, trust, and insurance companies should be avoided as their accounting policies are beyond the scope of this course. Research It is expected that you will use a number of resources to investigate your company including the internet. Annual reports, investor information, product/service information are among the many areas often addressed on corporate websites. Once a company is chosen, its website should be reviewed in detail in order to obtain an overview of the company and its financial situation. In addition to the company website information, you are required to obtain a hard copy of the company's latest annual report. In some cases, this can be requested through the website and, in other cases, you may have to contact the company directly. You may want to consider obtaining copies of the last three annual reports for comparative analysis. Your annual reports must be submitted with the written report. Additional sources of information for this project include (but should not be limited to) the following:
  • Additional information provided by the company
  • Newspaper/periodical articles (i.e. Canadian Business and Macleans)
  • Dun and Bradstreet Industry Average Ratios
  • Accounting texts (Corporate Accounting and Financial/ratio Analysis Sections)
  • Government or industry publications
Report Length Your summative must be typed. The annual report, ratio calculations, charts, graphs etc, are not part of the written report and should be included in an appendix after the written report. There is no limit on the length of the appendix. Requirements for the Written Report: Your written report should contain the following sections:
  1. An Introduction
This information includes a summary of general information about the company. This information is usually contained in the company's annual report and should include, but not necessarily be limited to, the following items:
  • The name of the company and the location of its head office;
  • The name of the chairman of the board of directors, the chief executive offices, chief operating officer, president and two directors;
  • A brief description of the organizational structure of the company (i.e. its divisions, subsidiaries, etc) and their locations;
  • The name of the firm which audited the financial statement and a brief summary, in your own words, of the accounting firm's opinion;
  • A brief summary of the significant account policies followed by the company (i.e. depreciation method, inventory valuation etc.);
Do not simply list this information. Using subtitles, put this section together in two or three coherent paragraphs. You my wish to add additional information as well. 2. Company Profile This section should include:
  • A brief history of the company
  • A brief summary of the corporate objectives and mission statement.
  • A description of the products sold and/or services performed.
3. President/CEO/Chairman's Report Based on this section of the annual report, summarize, in your own words, the contents of the chief executive's report. 4. Environmental Analysis Prepare an analysis of intangible factors and current events that may effect the company's current and/or future performance. Consider the company's competition (direct and indirect), the state of the economy both national and global, any provincial or federal legislation, current government policy, taxation laws, and current social and technological trends. What opportunities and/or threats do these factors play on the future of the company? What changes, if any, based on this information alone, should the company consider to remain profitable and competitive. 5. Financial Analysis (See Chapter 17) a. Comparative Analysis
  • Complete a comparative balance sheet and income statement comparing the results of the current and previous year using the Horizontal/Trend analysis technique as well as the Vertical Analysis Technique
  • The comparative statements should be setup the same way as any other financial statement you would complete. Briefly discuss your assessment of these findings/results.
  • See pages 730-761
b. Ratio Analysis In this part of the report, you are to prepare a neatly drawn table summarizing selected ratios and measurements for the last two years. Use at least five of the following ratios in your analysis:
  • Current (or Working Capital) ratio,
  • Quick Ratio,
  • Collection Period,
  • Inventory Turnover,
  • Debt ratio,
  • Equity Ratio,
  • Times Interest Earned Ratio,
  • Rate of Return on Net Sales, and
  • Rate of Return on Owner's Equity.
The calculations for your analytical review should be included in your appendix. Based on the two previous sections, along with the trends and/or significant changes discussed in the environmental analysis, provide an assessment of the financial condition of the company. 6. Appendices The annual report, ratio calculations, charts, graphs etc, are not part of the written report and should be included in an appendix after the written report. There is no limit on the length of the appendix. 7. Bibliography or list of work cited See attachment for examples of correctly cited work. You should also use parenthetical notation whenever you quote directly, or use ideas or opinions taken from your reference materials. NOTE: Some of the data may be difficult to obtain or may not apply to the company you have chosen. In such cases, answer as much as you can or state that the item is not applicable and provide reasons. The more popular the company you select, the easier it will be to obtain the information required. Please be sure to have your company approved by the teacher. Solution [sdm_download id="1493" fancy="0"] [sdm_download_counter id="1493"]