The assignment will be on the company p&g(Continued on next page) Financial Statement Analysis and...

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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

Himanshu · Accepted Answer

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,

(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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