FINANCIAL STATEMENT ANALYSIS (FAR670)

GROUP PROJECT (30%)

This is a team project involving both a class presentation and formal report worth 15 points each. The group project
will be performed in teams of 4 to 5 members. The objective of the group project is to give you an opportunity to
analyze the financial performance of a company and make comparison with another company of the same industry (or
its competitor). The companies chosen are from the industrial product, consumer product, technology, services, and
specialized industries

Calculate the ratios listed at the end of this document from the financial statements of your chosen companies for a
period of three years (ie.the recent year (2022) and the two preceding years. Once you have made these calculations,
read the “Chairman’s Statement” located in the annual report, as well as the footnotes to the various financial
statements. These are the pieces of information that are required for your analysis, in addition to “the numbers.” After
reading the Chairman’s Statement and footnotes, you should have a good idea of why certain ratios and figures
changed from one year to the next or why changes trend. If certain changes are not explained, try to think of reasons
why the figures or trend have changed. Your project should demonstrate evidence of detailed analysis of financial
statement data and evidence of integrating the tools and concepts covered in the course (Ratios, vertical and trend
analysis).

The goal of this project is to not only give you a chance to calculate the ratios that accountant and analysts use when
evaluating a company but also to look for reasons, (i.e. drivers), for those changes and to think of your reasons if none
are given. If you only do the calculations but do not discuss why certain changes took place, then you haven’t achieved
the goal of the assignment. You are also required to make comparison on the performance of the two chosen
companies.

In the end, you will hand in are required to prepare a report (maximum ten pages + supporting exhibits) that summarizes
the results of your financial analysis, using one-inch margins, a Times Roman font size 12, and double spacing. Also,
please make appropriate references to the source material and submit copies of any different source material you use.
You may include table and charts in the body of your report.

The final report is due on the 14th week and you are required to present your findings in the 13th and 14th meeting. The
presentation should include some media, such as a PowerPoint and videos presentation. Each group member is
expected to participate during the presentation (especially during the Q & A session). Only one or two group members
will be doing the presentation. The presentation should be about 20 minutes per group.

Places to find Annual Reports and financial information:

1. Your chosen company’s website

2. The Securities and Exchange Commission. Go to: http://www.sc.com.my

3. The Bursa Malaysia website: http://www.bursamalaysia.com.my

Required ratio calculations are listed below:

A. PROFITABILITY RATIOS B. EFFICIENCY RATIOS

1. Profit margin 1. Accounts receivable turnover

2. Return on assets 2. Inventory turnover

3. Return on equity 3. Fixed assets turnover

4. Total Asset Turnover

5. Operating income margin

C. LEVERAGE RATIOS D. LIQUIDITY RATIOS

1. Debt ratio 1. Current ratio

2. Debt-to-equity ratio 2. Working capital

3. Times interest earned 3. Days’ sales in receivables

4. Days sales in inventory

5. Inventory turnover

6. Acid test ratio

7. Free cash flow (OCF – Capital expenditure)

These ratios are explained in your textbook, so if you don’t understand, you can look up for more information there.

Evidence of Ratio Calculations: Please show your calculations of the financial ratios for both years, and your
formulas used. Please attach this sheet to the back of your written project.

Ratio Measurement (formula) Ratio value (show calculation)

Year xxx Year xx

It is important to consider that with all the information, for all the research, past performance is no guarantee of future
performance.