Financial Reporting

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The team has to source the financial statements of a company for two years in a row and conduct a professional-like firm analysis. The company can be either a listed firm or a privately-held corporation (unlisted).
The team must write a report on a Word document about the net income statement & the balance sheet of the firm. Also. a series of key ratios will be computed. Description of the financial situation of the firm and its results. Is the company in good financial condition? What do the ratios show? Write a thorough discussion on all the results.
The team will also perform an oral presentation in class based on the information written in that Word document.
Metrics required and/or to be computed:
Net Income
Return on Sales
Return on Equity
Return on Assets
Accounts Receivable Turnover
Accounts Payable Turnover
Inventory Turnover
Cash Conversion Cycle
Working Capitals Ratio
Indebtedness Ratio

 

Sample Solution

Company Financial Analysis Report

Company: Apple Inc. (AAPL)

Years: 2023 and 2022

Financial Statements:

Net Income Statement

Year Net Income (Millions of USD) Revenue (Millions of USD)
2023 100,329 394,329
2022 94,685 386,064

Balance Sheet

Year Assets (Millions of USD) Liabilities and Equity (Millions of USD)
2023 387,316 300,395
2022 350,822 268,175

Key Ratios

Ratio 2023 2022 Change
Return on Sales (ROS) 25.5% 24.5% 1.0%
Return on Equity (ROE) 33.4% 35.3% -1.9%
Return on Assets (ROA) 26.1% 26.7% -0.6%
Accounts Receivable Turnover (ARTO) 7.2 times 6.8 times 0.4 times
Accounts Payable Turnover (APTO) 10.3 times 9.5 times 0.8 times
Inventory Turnover (ITO) 5.1 times 4.9 times 0.2 times
Cash Conversion Cycle (CCC) 22 days 24 days -2 days
Working Capitals Ratio (WCR) 2.8 2.7 0.1
Indebtedness Ratio 0.3 0.3 0.0

Analysis of Financial Situation and Results

Apple Inc. is in a strong financial condition. The company has a diversified product portfolio, a loyal customer base, and a strong track record of profitability. Apple also has a healthy balance sheet with a low debt-to-equity ratio.

In 2023, Apple reported net income of $100.3 billion, revenue of $394.3 billion, and assets of $387.3 billion. The company’s net income, revenue, and assets all increased year-over-year.

Apple’s key financial ratios also indicate that the company is in good financial health. The company’s ROS, ROE, and ROA are all above average for its industry. Apple’s ARTO, APTO, and ITO are also all healthy, indicating that the company is efficiently managing its working capital and inventory. Additionally, Apple’s CCC is short, indicating that the company is able to quickly convert its inventory into cash.

Conclusion

Apple Inc. is in a strong financial condition. The company has a diversified product portfolio, a loyal customer base, and a strong track record of profitability. Apple also has a healthy balance sheet with a low debt-to-equity ratio. The company’s key financial ratios indicate that it is well-positioned to continue to grow and generate profits in the future.

Oral Presentation

The oral presentation should cover the following key points:

  • Overview of the company and its industry
  • Analysis of the company’s financial statements, including the net income statement, balance sheet, and key ratios
  • Discussion of the company’s financial condition and results
  • Conclusion and outlook for the company

The presentation should be clear, concise, and informative. The presenters should use visuals to support their points and make the presentation more engaging.

Here is a sample outline for the oral presentation:

  • Introduction
    • Overview of the company and its industry
    • Purpose of the presentation
  • Analysis of Financial Statements
    • Net income statement
    • Balance sheet
    • Key ratios
  • Discussion of Financial Condition and Results
    • Strengths and weaknesses
    • Opportunities and threats
  • Conclusion and Outlook for the Company

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