(Continued on next page) Financial Statement Analysis and EPS Forecasting Report Assignment First, choose a publicly traded company to analyze this semester. Choosing a US company which has been...

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The assignment will be on the company p&g


(Continued on next page) Financial Statement Analysis and EPS Forecasting Report Assignment First, choose a publicly traded company to analyze this semester. Choosing a US company which has been trading for more than 3 years will alleviate many issues (i.e. translating currencies). Next, gather historic data on key financial statements of the firm from either SEC filings (http://www.sec.gov/edgar/searchedgar/webusers.htm), Yahoo Finance (http://finance.yahoo.com/) or the firm’s own investor relations website. These include:  Balance Sheet  Income Statement  Cash Flow Statement Also collect necessary information like stock price, shares outstanding, dividends paid, etc. Then prepare a professional report to answer the following questions: 1. Compute the following ratios for the firm that you are analyzing, for the most recent period: 2. Comment on the financial condition of the firm in each of the above 5 categories in 2 or 3 sentences each. Use the ratios of your firm as evidence of your assertions by comparing it to some benchmark (historical ratios, competitors, market or industry average, etc.). If certain ratios are not applicable to your firm (if your firm doesn’t have debt or inventory, for example), still write on these ratios and how the absence of these items affects the firm – both the costs and benefits. 3. Decompose the ROE of your firm using the extended Du-Pont Analysis. ROE = http://www.sec.gov/edgar/searchedgar/webusers.htm http://finance.yahoo.com/ 4. Compare these components of ROE for the firm’s current period its past periods to understand the time trends. 5. Compare these components of ROE for the firm’s with its major competitor(s). 6. Now use the trends from questions 4 and 5 along with your own forecast of future macro-economic conditions to forecast the firm’s Earnings per share and cash flow per share. See the Sample Financial statement analysis in the course content for an example. To do this: a. First, make a common sized income statement for the last 3 to 5 years (every number as a percentage of revenue/sales). b. Next, measure the revenue growth for each year in the historical window. c. Forecast future revenue growth both quantitatively (for example, using a linear fit trend line/regression) and qualitatively. d. Produce forecasted income statements for future years using your revenue growth projections and common-sized balance sheets. Adjust items in income statement based on trends you see in past data, competitors, and the economy as a whole. Your grade will be based on the following rubric: Item Weight Question 1 18 Question 2 18 Question 3 9 Question 4 14 Question 5 13 Question 6 18 Overall Quality 10 Total 100
financial-ratio-assignment-1-1zkauoxv.pdf
Answered 1 days AfterMar 03, 2021

Answer To: (Continued on next page) Financial Statement Analysis and EPS Forecasting Report Assignment First,...

Himanshu answered on Mar 05 2021
156 Votes
Income StatementwithProjection
            The Procter & Gamble Company (PG)                    SHARE PRICE        $ 122.15
                                Share Outstanding        2.46B
                                Dividend Paid        0.791
        INCOME STATEMENT                            EPS    5.13            COMMON SIZE STATEMENT                Horizontal Analysis of Income Statement                    Projected Income Statement                Projected EPS            7.51
        Years    Current    6/29/2020    6/29/2019    6/29/2018    6/29/2017                TTM    2020    2019    2018    2017        TTM    2020    2019    2018        2022
        Total Revenue    73,975,000    70,950,000    67,684,000    66,832,000    65,058,000                100%    100%    100%    100%    100%        4%    5%    1%    3%        76,395,937
        Cost of Revenue    36,053,000    35,250,000    34,768,000    34,268,000    32,535,000                49%    50%    51%    51%    50%        2%    1%    1%    5%        36,994,885
        Gross Profit    37,922,000    35,700,000    32,916,000    32,564,000    32,523,000                51%    50%    49%    49%    50%        6%    8%    1%    0%        39,428,356
        Operating Expense    20,327,000    19,994,000    19,084,000    18,853,000    18,568,000                27%    28%    28%    28%    29%        2%    5%    1%    2%        20,794,219
        Operating Income    17,595,000    15,706,000    13,832,000    13,711,000    13,955,000                24%    22%    20%    21%    21%        12%    14%    1%    -2%        18,681,912
        Net Non Operating Interest Income Expense    -456,000    -310,000    -289,000    -259,000    -294,000                -1%    -0%    -0%    -0%    -0%        47%    7%    12%    -12%        -517,607
        Interest Income Non Operating    80,000    155,000    220,000    247,000    171,000                0%    0%    0%    0%    0%        -48%    -30%    -11%    44%        71,116
        Interest Expense Non Operating    536,000    465,000    509,000    506,000    465,000                1%    1%    1%    1%    1%        15%    -9%    1%    9%        557,486
        Other Income Expense    -6,000    438,000    -7,474,000    -126,000    -404,000                -0%    1%    -11%    -0%            -101%    -106%    5832%    -69%        -89,336
        Special Income Charges    -    0    -8,345,000    -    0                                0%
        Other Non Operating Income Expenses    -6,000    438,000    871,000    -126,000    -404,000                -0%    1%    1%    -0%    -1%        -101%    -50%    -791%    -69%        9,167
        Pretax Income    17,133,000    15,834,000    6,069,000    13,326,000    13,257,000                23%    22%    9%    20%    20%        8%    161%    -54%    1%        22,065,871
        Tax Provision    3,195,000    2,731,000    2,103,000    3,465,000    3,063,000                4%    4%    3%    5%    5%        17%    30%    -39%    13%        3,360,096
        Net Income Common Stockholders    13,582,000    12,764,000    3,634,000    9,485,000    15,079,000                18%    18%    5%    14%    23%        6%    251%    -62%    -37%        18,976,164
        Net Income    13,848,000    13,027,000    3,897,000    9,750,000    15,326,000                19%    18%    6%    15%    24%        6%    234%    -60%    -36%        18,839,224
        Preferred Stock Dividends    266,000    263,000    263,000    265,000    247,000                0%    0%    0%    0%    0%        1%    0%    -1%    7%        271,103
        Average Dilution Earnings    266,000    263,000    -    265,000    247,000                0%    0%        0%    0%        1%            7%        277,209
        Diluted NI Available to Com Stockholders    13,848,000    13,027,000    3,634,000    9,750,000    15,326,000                19%    18%    5%    15%    24%        6%    258%    -63%    -36%        19,583,391
        Basic EPS    -    0    0    0    0                    0%    0%    0%    0%            240%    -61%    -34%
        Diluted EPS    -    0    0    0    0                    0%    0%    0%    0%            257%    -62%    -34%
        Basic Average Shares    -    2,539,376    2,687,586    2,529,300    2,642,414                    4%    4%    4%    4%            -6%    6%    -4%        2,509,435
        Diluted Average Shares    -    2,625,800    2,687,586    2,656,700    2,740,400                    4%    4%    4%    4%            -2%    1%    -3%        2,589,120
        Total Operating Income as...
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