Income Statements and Balance Sheets

Case study

A brief outline of the firm and its industry is given, as well as a few tips for your attention. You are given three years' worth of income statements and balance sheets to examine. You are a financial analyst working for an investment firm. This manufacturer has asked for your firm's help in raising capital for the upcoming season's production requirements. It is your job to analyze the financial statements and comment to the investment brokers on this firm's current financial situation. It is late July, and the firm's financial statements (representing the fiscal year ending June 30) have just been released.

For this project you must recreate the attached financial statements on separate worksheets in an Excel workbook. Then, on another worksheet, you must create formulas to calculate the financial ratios that can be derived from the given financial statements. These ratios are to be calculated using formulas in the cells that are linked to the other worksheets: no credit will be given if the ratios are calculated by hand and entered into the cells. You must determine which ratios can be calculated with the information given, based on the ratios given in your textbook. There is enough data for you to calculate liquidity, asset management, leverage, and profitability ratios. You must calculate the Du Pont ratio analysis separately. All three years' worth of ratios must be calculated, and should be presented in chronological order for you to do trend analysis.  Next, you must write a one-page paper discussing the findings of your ratio analysis. You must include not only the current situation, but also how the ratios have changed over the past three years (trend analysis). Any recommendations you can make as to what the firm can do to correct any problem areas would make you look better in the eyes of your superiors.