Financial Reporting and Analysis – Individual Project/Term Paper

Identify one industry of your choice. Bloomberg/Prowess/NIC provides lists of industries and
their makeup. Select two competing listed companies in that industry. You may have to
download the annual reports of the companies for at least for five years. The most frequently
used sections of the annual report will be the financial statements. Also, you may want to
review footnotes, summary of financial information (usually for the past five years or longer),
management’s discussion and analysis.

You are required to write a short report providing the following information about the
selected companies:

1. You need to state at least one reason to justify that the chosen companies are
competitors apart from the fact they are from the same industry.
2. Make a 5-year trend analysis, using 2013-2014 fiscal year as the base year, of (i) net
sales and (ii) net income. Comment on the significance of trend results.
3. Evaluate the company’s liquidity relative to the industry average and to the
competitor that you chose.
4. Evaluate the company’s solvency relative to the industry average and to the
competitor that you chose.
5. Evaluate the company’s profitability relative to the industry average and to the
competitor that you chose.
6. Carry out the DuPont analysis as well for the selected companies.
7. In case the industry lenders that provide loans to the companies approach you to know
about the selected companies. Which information in general you should use to infer
that the company is solvent and will continue as a going concern. What will be your
recommendations to the lenders about the solvency and going concern potential of the
companies that you have selected?