Take the Financial Statement of a big corporation and calculate the main financial ratios in order to evaluate the efficiency and the effectiveness of the firm. Please critically evaluate the results.
Structure of the project- main components:
- Executive summary / Introduction
- Scope of the proposed project
- Action Plan to take
Please take a financial statement of a well-known big corporate and calculate the main financial ratios in order to evaluate efficiency and effectiveness of the firm.
You can download financial statement from the company website.
Additionally, in order to analyze financial statement, please consider the form. For example: if it is a European company, it will have classical form (balance sheet, income statement, ….). If it is an American company, it will have balance sheet different (assets, afterward liabilities).
Please calculate ALL IMPORTANT financial ratios, for example coefficient between 2 different values profit and investing capital, that represent both return of capital ROI. Also, as example the short and log terms liabilities ratios.
Please DO NOT only analyze one value, but it MUST be the whole group of values
The calculation must be done as the examples on all important ratios of the financial statement in order to understand intrinsic values.
The important of this work is to give a sense of the numbers. Behind each value there is a meaning.
Please show what are the financial problems of the big corporate and provide proposal how to solve it.
ACTION PLAN: According to your analysis, if there is a problem, what should be the solution.
Conclusion: please give your personal opinion if there are changes to make on the financial situation, to solve the issues for the company better future.
Points to analysis or think throughout the analysis of the company:
- What cost would you consider could be eliminated?
- How would you minimize cost? Implementation of cost reduction, its description etc.
- What is managerial accounting based on the company’s operations? How managerial accounting is reflected on the company?
- What do you believe or research to be the aspects of cost accounting in that particular business?
- How does the company cost account?
- Advantages and disadvantages of their cost accounting procedures.
- How does the company implement standard costing? Eliminating waste in order to increase efficiency in performance?
- Advantages/Disadvantages of standard costing
- Does the company have a favorable or unfavorable variance? (meaning, is their actual costs more than or less than their standard cost)
- Cost accounting, how is it reflected on that company?
- Are cost fixed?
- semi fixed?
- Are cost directly inputted to the product (considered direct cost) or are the products indirectly distributed among different cost centers?
- Does the company imply job costing or process costing and why, or a mix of both (explanation of which process and why)
- How does the company control its cost? Is the company inventory held for a long period of time?
- Advantages/disadvantages of the companies control cost
- In order to maximize Cost reduction are they:
- Reducing expenses or increasing and why?
- Increasing productivity?