Financial Analysis Paper 2
Current course material for possible reference
Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2012). Financial accounting. (8th ed.). Hoboken, NJ: John Wiley & Sons.
WileyPLUS will be used in this course and is integrated with the online course shell.
Supplemental Resources
Adler, J. (2012). When do we hold the accountants accountable? Strategic Finance, 93(12), 48-51.
Kelso, K. (2011). Building blocks of a successful financial close process. Journal of Accountancy, 212(6),
18-21.
Lamoreaux, M. (2012). A new system for recognizing revenue. Journal of Accountancy, 213(1), 30-35.
Assignment 2: You Are an Investment Analyst
Due Week 10 and worth 320 points
As the CFO of your corporation, you are in charge of preparing and analyzing financial statements
that will be presented to potential investors and creditors. However, before you can present the
financial statements to investors and creditors, you need to prepare the financial statements with
supporting analysis. Select one (1) pair of the following companies to conduct your financial
statement analysis.
• Pepsi versus Coca Cola, or
• Amazon versus eBay
Write an eight to ten (8-10) page paper in which you:
1. Analyze each company’s history, product / services, major customers, major suppliers, and
leadership, and provide a synopsis of each company.
2. Identify three (3) profitability ratios that creditors may be interested in. Calculate the ratio for
each company, and prepare a report to summarize your findings on the financial health of each
company. Also, recommend to management the manner in which they can improve each of the
three (3) ratios identified.
3. Summarize at least two (2) news events (this may include mergers, acquisitions, or political
issues) that occurred from 2012 to the present day, and analyze the impact that these events had
on each company’s financial statements. Indicate the primary way in which the merger,
acquisition or political issues influence potential investors’ and creditors’ perception of both
companies.
4. Analyze each company’s income statement over the past two (2) years, and determine which
company outperformed the other. Suggest a way in which the lagging company can improve its
income. Support your suggestion with a specific analysis.
5. Analyze each company’s balance sheet. Prepare a vertical analysis for each company, interpret
the results, and write a financial report. Also, suggest the manner in which the company that is
not performing well can improve its balance sheet in order for it to be attractive to potential
investors.
6. Use at least four (4) quality academic resources in this assignment. Note: Wikipedia and other
Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all
sides; citations and references must follow APA or school-specific format. Check with your
professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s
name, the course title, and the date. The cover page and the reference page are not included in
the required assignment page length.
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