Ask Basic Finance Expert

This Portfolio Project has two parts: calculations and a 4- to 6-page essay. While the computations requirements of this assignment are significant, equally significant are your discussion and analysis of quantitative results of AT&T financial statement. You have to create two files:1) a spreadsheet containing AT&T’s horizontal and vertical analysis (and perhaps AT&T ratios) and 2) a word document containing your essay.

Select publicly traded company (AT&T, Inc) and carry out the expanded analysis on financial statements. Use the most current 10K statements available on www.sec.gov http://www.sec.gov or annual statements in finance.yahoo.com http://finance.yahoo.com.

Part 1: Complete following for your selected firm in the Excel spreadsheet:

1. Horizontal and vertical analysis of Income Statements for the past three years (all yearly balances set as a percentage of total revenues for that year).

2. Horizontal and vertical analysis of Balance Sheets for the past three years (all yearly balances set as a percentage of total assets for that year).

3. Ratio analysis (eight ratios of your choosing) for past three years PLUS a measurement for the credit worthiness of your firm as measured by Altman’s Z-score.  Note that if you used your chosen firm for our ratio-related discussion posts, then you must also present industry-average ratios or current year competitor ratios for your ratio analysis. Comparing your firm’s ratios to a close competitor or an industry-average ratio makes your analysis much more meaningful.

Part 2: The Paper:

• 4-6 pages in length.

• Include a proper introduction and conclusion.

• Include a reference page.

• Your paper must provide your reader with the overall understanding of the financial health of your chosen firm including the following:

i) Discussion of the ratio analysis results, including rationale for the ratios chosen.

ii) Discussion of all horizontal and vertical analysis.

iii) Discussion of four items from the management discussion of the firm that support the conclusion formed in your discussion of the financial results.

Much of this course has concentrated on learning financial statements, mainly as there was not an accounting prerequisite. Because of this concentration, you may find this assignment challenging. Though, if you understand the financial statements, then the horizontal and vertical analysis must (hopefully) be rather intuitive. Such as, if you see sales rise by 20%, then should not you also see net income rise by 20% or more if the managers are effective at controlling costs?  If you see sales rise by 20% and assets rise by 40%, we have to ask why this is happening. It would appear that assets have risen too far given the sales that are generated from those assets—why did this occur?  You may have to research that type of problem and discuss it in your analysis.

You have had some experience with financial ratios through Discussion Board.  I’d suggest that you start your ratio analysis with four ratios found in DuPont equation. If you discover the weakness in one component of DuPont ratios, then it would make sense to look at ratios which are closely related to troublesome ratio. Such as, if you discover that the asset turnover is declining over time, then take a look at some related ratios like the inventory turnover rate or the average collection period. If you discover that the equity multiplier is increasing (indicating greater reliance on debt), then look at some related ratios such as the debt ratio or Times Interest Earned.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M96229

Have any Question?


Related Questions in Basic Finance

Question utilizing the concepts learned throughout the

Question: Utilizing the concepts learned throughout the course, write a Final Paper on one of the following scenarios: • Option One: You are a consultant with 10 years experience in the health care insurance industry. A ...

Discussion your initial discussion thread is due on day 3

Discussion: Your initial discussion thread is due on Day 3 (Thursday) and you have until Day 7 (Monday) to respond to your classmates. Your grade will reflect both the quality of your initial post and the depth of your r ...

Question financial ratios analysis and comparison

Question: Financial Ratios Analysis and Comparison Paper Prior to completing this assignment, review Chapter 10 and 12 in your course text. You are a mid-level manager in a health care organization and you have been aske ...

Grant technologies needs 300000 to pay its supplier grants

Grant Technologies needs $300,000 to pay its supplier. Grant's bank is offering a 210-day simple interest loan with a quoted interest rate of 11 percent and a 20 percent compensating balance requirement. Assuming there a ...

Franks is looking at a new sausage system with an installed

Franks is looking at a new sausage system with an installed cost of $375,000. This cost will be depreciated straight-line to zero over the project's five-year life, at the end of which the sausage system can be scrapped ...

Market-value ratios garret industries has a priceearnings

(?Market-value ratios?) Garret Industries has a? price/earnings ratio of 19.46X a. If? Garret's earnings per share is ?$1.65?, what is the price per share of? Garret's stock? b. Using the price per share you found in par ...

You are planning to make annual deposits of 4440 into a

You are planning to make annual deposits of $4,440 into a retirement account that pays 9 percent interest compounded monthly. How large will your account balance be in 32 years?  (Do not round intermediate calculations a ...

One year ago you bought a put option on 125000 euros with

One year ago, you bought a put option on 125,000 euros with an expiration date of one year. You paid a premium on the put option of $.05 per unit. The exercise price was $1.36. Assume that one year ago, the spot rate of ...

Common stock versus warrant investment tom baldwin can

Common stock versus warrant investment Tom Baldwin can invest $6,300 in the common stock or the warrants of Lexington Life Insurance. The common stock is currently selling for $30 per share. Its warrants, which provide f ...

Call optionnbspcarol krebs is considering buying 100 shares

Call option  Carol Krebs is considering buying 100 shares of Sooner Products, Inc., at $62 per share. Because she has read that the firm will probably soon receive certain large orders from abroad, she expects the price ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As