Project Assignment

Guideline

1. Purpose

The final group project aims to provide students with a basic understanding of the financial statements, in particular, the annual report. Students should be able to analyze and evaluate various aspects of the financial statements, with emphasis on the topics discussed in the course.

2. Company Assignment

You need to work with an assigned group and choose a firm in the attached list of Korean firms (see Appendix A). Your group needs to analyze its latest available annual report. You can refer to Appendix B to know how to get the financial statement data of Korean firms.

3. Format

Each final group project report must include a cover page, listing the following information: project title, instructor's name, group number and group members' names. Your group needs to submit a PowerPoint slide as the final group project report. Photocopies of the various sections of the annual report used in the analyses must be appended.

4. Contents

You are required to answer all questions below. You are welcomed to use other sources of information (e.g., company's website, press release, newspaper clippings, etc.) but they must be properly sourced and noted. Clearly label the questions you are attempting.

5. Questions

a. What are the principal activities of your company?

b. Evaluate the performance of your company on the year under review.

c. Evaluate the liquidity of your company at the end of year under review.

d. Which non-financial information disclosed in the annual report, such as in the management discussion, is most useful and relevant for a further evaluation of your company? Explain.

6. Tips for Analyses

You can select some relevant analysis tools for your answers from the following list of analysis tools. "Chapter14. Financial Statement Analysis" on the textbook will be helpful for the understanding of these analysis tools.

a. Draw up a common-sized income statement/balance sheet of your company. Then conduct the horizontal/vertical analyses.

b. The skill of benchmarking will be helpful: Choose two or three representative comparable firms of your company within same industry. Then compare the common-sized income statement/balance sheet of your company with them of chosen comparable firms on the year under review.

c. Calculate and analyze relevant ratios, such as current ratio, debt ratio, quick ratio, account receivable turnover, inventory turnover, rate of return on sales, rate of return on equity, etc.