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1. Using the tools provided in this course, identify at least two areas of concern (potential red flags) that may prompt additional scrutiny from savvy investors or analysts who rely on these reports to forecast future firm performance. Pay particular attention to industry averages; ratio analysis; year-over-year growth rates; managerial judgements and estimates; and differences in accounting methodologies (if any).

2. Discuss the impact of these red-flags on the reported numbers and the implications for drawing conclusions based solely upon as-reported numbers.

3. Identify one (1) potential benefit and one (1) potential drawback to analyzing financial statements within the framework of a representative industry coverage universe.

4. Based on your analysis of these ten (10) companies’ financial statements in this industry, make predictions regarding (1) which company is most likely to miss analysts’ targeted earnings forecast in the following reporting period and (2) which company is most likely to beat analysts’ targeted earnings forecast in the following reporting period.

1. Please note that you will not be evaluated on the basis of whether your prediction actually holds true, but rather on the logical presentation of your predictions based on your own financial statement analysis.

 

In summary, your presentation should include the following:

· Brief introduction

· Please note that there is no need to provide a thorough introduction of each company; however, you may wish to provide a brief industry overview.

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