IP1 Finc

One of the critical roles of a financial analyst is to provide insight into the performance of an organization using financial models and tools. In this Individual Project (IP), you will focus on the use of a simple but effective tool, a horizontal analysis, to provide insight into the financial performance of a chosen company.

Publicly traded companies publish annual reports to educate current and potential stockholders about company activities and performance. They include information about the company and significant financial statements, including the balance sheet, income statement, and cash flow statement, offering a snapshot of the company’s financial performance over the last year.

Analyzing financial performance is critical to determine companys financial health.

Choose 1 of the companies below, and review its financial statements and supplementary data from the annual report:

Conduct a full horizontal analysis on the income statement and answer the following questions:

• After conducting the analysis, look through the trends. What do you notice about specific accounts? You are looking for anything that looks like it might be worthy of investigation. When analyzing Net Sales, what changes did you notice? What are some possible reasons for this change? How might you investigate the cause of the changes?
• When analyzing Operating Expenses, what changes did you notice? What are some possible reasons for this change?
• Now that you have conducted a horizontal analysis, discuss how investors might interpret the trends you have observed?

Your final submission should consist of a 3-5-page Word document, along with the Excel trend analysis that you completed for your chosen company.