FINANCIAL PROJECT

Select a public company in the Automobile Industry and browse their website to acquire a copy of the most recent annual report/financial statements (NOT their quarterly report). After you have downloaded the report, analyze the information contained in the company’s balance sheet and income statement to answer the following questions:

I HAVE SELECTED TOYOTA ^^

1. What are the company’s total assets at the end of its most recent annual reporting period? Why is this important?
2. What are the total assets at the end of the previous annual reporting period?
3. How much cash and cash equivalents did the company have at the end of its most recent annual reporting period?
4. What amount of accounts payable did the company have at the end of its most recent annual reporting period?
5. What amount of accounts payable did the company have at the end of the previous annual reporting period?
6. What is the company’s revenue for the last three annual reporting periods and what is the trend?
7. What is the change in dollars in the company’s net income from its most recent annual reporting period to the previous annual reporting period?
8. What are the company’s total current assets at the end of its most recent annual reporting period?
9. What are the total current assets at the end of the previous annual reporting period?
10. What in the information above would be important to a potential investor, employee, and so forth?

In addition:

Analyze the information contained in your company’s balance sheet and income statement to calculate the following ratios (show your calculations for each ratio):

LIQUIDITY RATIOS

• Current ratio
• Acid-test, or quick, ratio
• Receivables turnover
• Inventory turnover

PROFITABILITY RATIOS

• Asset turnover
• Profit margin
• Return on assets
• Return on common stockholders’ equity

SOLVENCY RATIOS

• Debt to total assets
• Times interest earned

After calculating the ratios, please answer the following questions:

• What do the liquidity, profitability, and solvency ratios reveal about the company’s financial position?
• Which users may be interested in each type of ratio?
• What does the collected data reveal about the company’s performance and position? What would you recommend to the company’s CEO?
• Would you, as financial and accounting consultants, recommend an outside investor to investment in this company? Please explain your answer

Instructions: Summarize your analysis in a 5-10 page paper.

In addition, include a copy of the company’s balance sheet and income statement in pdf format, along with a link or the website address of where you found the reports so I can verify its accuracy. If the file it’s too big, just send me the link.

Remember that this document should be written as if you were the company’s financial analysts/consultants and are reporting your findings to the CEO or a group of investors. The objective is to discuss your findings from your ratio calculations, income statement and balance sheet analysis to help the CEO make company decisions.