Financial Statement Analysis – Project

FM-2
Instructions
1. Chose any two companies from BSE.
2. Company names should contain first letters of your name and surname.
3. Source the last two years (2019-20 and 2020-21) financial statements (Balance sheet, Income statement, Cash
flow statement) from either Prowess or the annual reports extracted form company’s website (data from other
sources will be invalid!).
4. If the data is incomplete, then chose another company.
5. Both the companies need to have two years complete financial data.
6. Calculate each company’s liquidity ratios (such as current ratio, quick ratio and cash ratio), capital structure
(leverage [such as debt equity and debt assets ratio] and coverage [such as interest coverage and DSCR]) ratios,
activity or turnover (such as inventory turnover, inventory holding period, debtor’s turnover, average collection
period, assets turnover) ratios and profitability ratios (such as return on assets, return on capital employed, net
profit margin and gross profit margin, return on equity, dividend payout ratio, dividend yield, earnings yield,
P/E ratio), for the two financial years.
7. Once all the calculations are done, you need to interpret the ratios and provide reasoning and justification for
the behavior of these ratios. Compare the two companies for two years and comment on the findings. You need
to provide your interpretations and conclusions for all ratios in the adjacent cells.
8. The students need to submit the excel sheet for all the calculations. The calculations and formulae must be
linked to the financial statements. It means if we click on a ratio, it should lead the faculty to find out how you
have computed the ratio. Direct entries for any ratio will not be entertained under any circumstances.
9. Name your Excel file as your section and seat number (eg., C56 for a student in section C whose seat number
is 56).
10. Last date for submission is January 21, 2022, 18.00 hours. No marks for late submission!!
11. This assignment carries 20 marks, with 10 marks for Computation and 10 marks for Analysis.