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FIN3013

In this group exercise, students discuss graphs from Assignment #1, analyze financial statements, calculate ratios, and write a professional memo reporting the results.

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FIN3013

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  1. FIN3013 Lab #2

  2. Group Exercise • Divide into groups of four students • Discuss the graphs you created in Assignment #1 • What four companies were analyzed? • How did each perform relative to the S&P500 • What similarities do you notice about the four graphs? • What differences do you notice? • Do you have any questions about the assignment or results? UTSA College of Business FIN3013Lab

  3. Assignment #2Goals • Gather corporate financial statements • Calculate financial ratios • Write a professional memo reporting results UTSA College of Business FIN3013Lab

  4. Assignment #2Gather Financial Statements • Balance Sheet and Income Statement • Past 3 years • Annual data • Available at http://finance.yahoo.com UTSA College of Business FIN3013Lab

  5. Assignment #2Gather Financial Statements UTSA College of Business FIN3013Lab

  6. Assignment #23 Years, Annual Data UTSA College of Business FIN3013Lab

  7. Assignment #2DuPont Decomposition ROE = NI/Equity = NI/Sales X Sales/Assets X Assets/Equity UTSA College of Business FIN3013Lab

  8. Assignment #2DuPont Decomposition for 3 Years UTSA College of Business FIN3013Lab

  9. Assignment #2Liquidity Ratios • Current Ratio = Current Assets/Current Liabilities • Quick Ratio = (Current Assets – Inventory)/Current Liabilities • Cash Ratio = Cash/Current Liabilities UTSA College of Business FIN3013Lab

  10. Assignment #2Liquidity Ratios for 3 Years UTSA College of Business FIN3013Lab

  11. Assignment #2Write Memo--Content • Brief description of your findings • Be sure to include table with figures • Provide at least two insights/observations • Observations will vary greatly depending on company UTSA College of Business FIN3013Lab

  12. Assignment #2Some Questions to Consider • Has the company drastically increased or decreased its use of debt? • Has the company’s liquidity position changed over the three years? • Has ROE been rising or falling? If so, what has contributed to this change? • What trends do you see developing in the data? • Do you see any major changes in the financial status of the company over the time period? UTSA College of Business FIN3013Lab

  13. Assignment #2Write Memo--Format • Use proper memo format • Be sure to proofread • Writing—clear, concise, easy to follow • Free of spelling and grammatical errors • Grade based on presentation as well as content UTSA College of Business FIN3013Lab

  14. QUESTIONS? UTSA College of Business FIN3013Lab

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