FINANCIAL STATEMENT ANALYSIS FINAL EXAM

1. There are three sections to this exam. With these instructions you will receive an Excel spreadsheet that has three parts in which you must calculate:

a. The cash flow statement for years 9 and 10 (chapter 7)

b. RNOA and ROCE for years 9 and 10 (chapter 8)

c. The operating performance for years 9 and 10 (chapter 1 and 10).

2. Read the instructions carefully and completely before preparing your answers.

3. If an answer requires an excel formula, include your formula in the cell where the answer is calculated. You must show how you calculated the answer.

PART 1 - Prepare a complete and properly formatted cash flow statement for years 9 and 10 using the indirect method. The CFS must be in the proper and complete format. Two point deduction if not in proper format.

Also, keep in mind, if your ending cash balance on the cash flow statement does not equal the cash balance on the balance sheet ... your cash flow statement is incorrect. Don't turn in answers that do not match the balance sheet cash.

PART 2 - Using the financials for years 8, 9 and 10:

A. Calculate the RNOA and ROCE using the basic formula (simple methods) for years 9 and 10. Carry the percentage answers to one decimal place, rounding up if 5 or over.

B. Then, for ROCE disaggregate it into its three major components: RNOA, Leverage and Spread. On the spreadsheet you must calculate and show the answers to 1 through 19 (below) in addition to the RNOA and ROCE calculations. Use averages where required. The NFE calculation includes interest income from investments ... AND ... interest expense from the lease and long term debt. Remember to adjust the net interest by (1-Tax).

C. The Operating Assets (OA), Operating Liabilities (OL), Financial Assets (FA) and the Financial Liabilities (FL) are identified on the Excel spreadsheet in column D next to the corresponding balance sheet account.

1. NOPAT
2. OA
3. OL
4. NOA
5. Avg NOA
6. RNOA using simple method Check number provided
7. NI
8. Avg CE
9. ROCE
10. FL
11. FA
12. NFO
13. Avg NFO
14. NFR
15. NFE
16. Avg NFE
17. Lev
18. Spread
19. Disaggregated ROCE Note: must equal ROCE from #9 above.

PART 3 - Calculate the operating performance financial ratios for years 9 and 10. Use averages where required. Use 365 days for daily averages. Show your calculation formulas in the spreadsheet.

Attachment:- Assignment Files.rar