Prompt: Produce a financial statement analysis and valuation report that summari

Prompt: Produce a financial statement analysis and valuation report that summarizes the financial health, projected future performance, and estimated value of
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the publicly traded (S&P 500) company that you selected at the beginning of the course. As an independent financial accounting analyst working for a major
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trade journal, your report is intended to inform a general audience about the overall financial well-being of the company and how it compares to a major
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competitor. Your report should cover information of interest to both internal and external stakeholders—summarizing major findings, suggesting ways to
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improve operational performance, and assessing investment potential. Keep in mind that brief, clear communications are essential in effectively reaching
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business and media audiences.
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Specifically, the following critical elements must be addressed:
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I. Balance Sheet Analysis. In this section, use financial statements and accompanying notes to:
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A. Analyze what the company’s current and prior year liquidity and debt-to-equity ratios say about the company’s financial health, justifying your
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response. Consider the appropriate level of debt and how this year’s performance compares to the previous year.
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B. Consider normalization adjustments when adjusting the balance sheet to be comparable to competitors, when creating the prospective balance
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sheet, and when calculating the final company valuation as either a premium or discount. (Include your analysis spreadsheet in Excel as an
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appendix.)
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C. Analyze the company’s balance sheet for the current and previous year using a horizontal analysis. (Include your horizontal analysis spreadsheet
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in Excel as an appendix.) Explain your findings.
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D. Comparison. Analyze the competitor’s balance sheet indicators for opportunities for the selected company to improve its own performance.
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Justify your response using the financial statements of both the company and its competitor.
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II. Income Statement and Cash Flow Analysis. In this section, use financial statements and accompanying notes to:
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A. Analyze the profitability of your selected company using appropriate profitability ratio(s) and a vertical analysis of the company’s current and
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prior year income statement. (Include your vertical analysis spreadsheet in Excel as an appendix.) Be sure to explain your findings.
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B. Normalization adjustments. Analyze historical income statements to determine whether there were any non-recurring or extraordinary items
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that should be removed from the income statement. An example would be aggressive expense recognition or conservative revenue recognition,
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which could either depress or inflate earnings. Adjusting these items will make the target company more comparable to the others.
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C. Free cash flow. Analyze what your selected company’s free cash flow figures for the current and prior year say about the company’s financial
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health. Consider other sources or uses of available discretionary cash.
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D. Dividend paying capacity of the company. Determine if the company is on track to pay out dividends this year and whether the dividend payout
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ratio increase or decrease.
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I am attaching the financial statements.