You have to add 2 pages of Analysis And you have to do Charts, Tables based on the sections that I put in the sample and the tables based on what is in the samples BUT the writer must use the annual reports that I sent in the order for three years only for GULF INVESTMENT CORPORATION the most important thing is to use the annual reports for the analysis and for the write up please review the sample document and the project guidelines for more information. please ensure you use the following annual reports
The team project should cover all chapters covered in this course (Chapter 1 to Chapter 11). Comments and interpretation should be given on each type of analysis. The team must prepare a written project of not more than (50) pages, including among others:
1- Description of the company (Chapter 1 to Chapter 4). This may include, for example: official name of the corporation/ location of the corporate headquarters/ fiscal year-end of the corporation/ accounting principles and measurement used by the company; audit report; / treasury shares (if any)/ equity method/ consolidation method/ dividends/ stock split. The description of the company may also include a discussion on major items in the balance sheets/ income statement/ statement of cashflow/
comprehensive income/ classification of balance sheet/ the effect of including or excluding of items like equity earnings/ discontinued operation …etc.
2- Horizontal Analysis, Vertical Analysis; Year-to-Year Change and other titles covered in Chapter 5.
Horizontal Analysis is used as a tool to evaluate data and trends over time. Horizontal Analysis is used to do intra-company analysis and expresses information as a percentage change. The calculations used to determine the answers for the horizontal analysis must be included in the project. Every team must prepare the horizontal analysis over years including 2009- 2012 in order to determine the trend in the data over time. The analysis must include (at least) the following: (Use Microsoft Excel)
• Gross Profit
• Net Income
• Income from Continuing Operations
• Net Cash from Operating Activities
– Give comments on the results related to your company?
– Compared with the other company, which Company is experiencing the most growth?
– Where is the growth coming from?
– Graph your results in order to demonstrate the trend for your company.
Vertical/Common-size analysis expresses items in a financial statement as a percentage of a single or base amount. This allows analysis of two or more corporations of varying sizes.
The calculations used to determine the answers for the vertical analysis must be included in the project. (Use Microsoft Excel)
I. For an Income Statement, items are usually expressed as a percentage of (Sales) revenue. Perform vertical analysis in relation to revenue for the following items in the Income Statement over years including 2009- 2012.
General and Administrative
Selling and Marketing Expense
Based on the analysis, how have your company performed relative to the following:
* Product or Service Cost Control
* Operating Cost Control
* Debt Servicing
* Year-to- Year Change (2010- 2012)
* Compare the results of your company with the other company.
II. For a Balance Sheet, vertical analysis is performed by expressing amounts as a percentage of total assets. These percentages are then compared to
percentages calculated for another corporation (inter-company analysis). Perform common-size analysis over years including 2009- 2012.
Property, Plant and Equipment
All Other Assets
TOTAL ASSETS 100%
Based on this analysis, what conclusions can be drawn about your company?
3- Ratio Analysis (Chapter 6, 7, 8, 9 and 10)
Provide a description of each category, the exact ratios to be calculated for each category, and compare the important ratios (covered in chapters 6 to 10) for your company with the other company.
Ratio analysis should cover:
– Liquidity of Short-Term Assets; Related Debt-Paying Ability (Chapter 6)
– Long-term Debt-Paying Ability (Chapter 7)
– Profitability Analysis (Chapter 8)
– For the Investor (Chapter 9)
– Statement of Cash Flows (Chapter 10)
Teams must calculate the ratio over 2009- 2012. Present, in chart or graph format, each ratio for each of the corporations.
Category: Short-Term Liquidity: (Chapter 6)
Ratio Your Company Other Company
Current Ratio 1.3 1.9
Days’ Sales in
Receivables 50 days 55 days
Working Capitals 7 million 7.5 million
. . .
. . . . . . .
The calculations used to determine the answers for the ratio analysis must be included in the project.
For each ratio, comment on:
What is being measured?
What does it mean?
At the end of each category/section, comment on:
As a category, what is being measured?
Who are the users of this information?
Compare your company’s ratios with the other company?
Which company is in the best overall position?
4- Forecasting Financial Failure and other titles covered in Chapter 11.
We will assume that the Univariate Model suggested by William Beaver and Multivariate Model suggested by Edward Altman and Thomas McGough are relevant to the companies in Kuwait.
Beaver found that Cash flow/ total debt; Net income/ total assets and Total debt/total assets are valid in forecasting financial failure. Assume that these ratios are also valid for the case of Kuwait; do you think that your company has a risk of financial failure?
According to the Altman model, does the Z-score of your Company indicate a high probability of financial failure?
Draw conclusions from your analysis based on data gathered in Sections 2 – 4. Conclusions and recommendations must address the following as a comparison between the two companies. The thoughtfulness of the analysis will be the most important factor in the evaluation of this section.
1. What are the overall strengths and weaknesses of your corporation?
2. What recommendation would you make to current and potential private or organizational investors in your company?
3. What recommendation would you make to lenders regarding the credit-worthiness of your company?
4. Position, salary and benefits being equal, which company (compared with the other company) would you prefer to work for?
5. Other important factors affecting the evaluation of your company.