Financial Statement Analysis and Forecast
Select one of the 5 companies from your investment project for this assignment. Download the last 3 yrs Income Statement/Earnings Report and conduct the following:
Conduct a trend analysis in excel of the companys growth or decline in revenues and expenses over the last 3 years (2015-2019).
In excel your trend analysis should include all the line items on the Income Statement along with %.
Highlight the line items which are the highest expense for that company.
Create a column called 2020 and forecast the companys 2020 year-end income and expenses based on the trend analysis for the last 3 yrs.
You may want to also consider the following for the forecast:
Has the company reported a decline in sales due to COVID-19 for Q1?
If the company reported a decline in sales for Q1 make an assumption that the average annual growth will decline by that amount for the rest of the year.
You can either make the decision to adjust cost of goods sold or not adjust cost of goods if you believe the company will be stuck with inventory.
Research to see if there has been redundancies or furlough and adjust employee compensation by the % of redundancies and furlough.
Determine whether all other line items will remain the same.
You may make additional adjustments to your numbers based on your research.
Write a one-page summary of your assessment of the company’s performance over the last 3yrs. Please indicate areas where you believe the company could improve upon to increase profitability. Also include your forecast of the company’s 2020 year-end Total Revenues, Expenses and Profit. Include the assumptions used for these estimates.
You can find the multi-year financials on the investor tab on each companys website. You may also find it on Market Watch or the SECs website.
