Analyzing a Company’s Financial Health
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The main goal of financial management is to maximize the wealth of the shareholders. In simple terms, this means the goal of any business is to use its resources efficiently while minimizing risk and earning the highest profits possible. How can investors determine if this goal is being met? One method is to use financial statement analysis to evaluate a firm’s growth, level of debt, use of its assets to generate revenue, etc.
Choose a publically traded company to research.
Requirements
Use your company name as the title of your post.
Give a short summary of the main business operations.
Complete the table below using data from the company’s Annual Report or you can search MSNMoney.com or YahooFinance.com).
2018
2019
Total Revenue (Sales)
Net Income
Total Assets
Total Liabilities
Total Equity
Profit Margin (Net Income ÷ Total Revenue)
Return on Equity (ROE) (Net Income ÷ Total Equity)
Earnings per share (Net Income ÷ # shares outstanding)
In your post be sure to address the following:
Consider what issues over the last two years have impacted the firm’s financial position. Use this information to compare the report for this current year with the previous year(s).
Generally speaking, did this company grow or decline from the previous year? Be sure to explain your position.
Do you believe that managers have accomplished the goal of maximizing shareholder wealth? Explain why you think this is so.
Required Readings
http://oer2go.org/mods/en-boundless-static/www.boundless.com/finance/textbooks/boundless-finance-textbook/index.html
https://www.investopedia.com/financial-edge/0910/6-basic-financial-ratios-and-what-they-tell-you.aspx
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