You are a researcher and an investment advisor with an investment bank. Your company is planning to develop its own financial statement analysis to track the performance of its portfolios in a particular listed company in the Ghana Stock exchange. So far, the company has portfolios which consist of the equities of companies in the following sectors of the economy ⚫ Financial - Manufacturing The manufacturing category includes all companies that are non- financial. You have been asked to calculate financial ratios for a five-year period of the chosen company based on the following: Profitability ratios > Efficiency/Activity Ratios Liquidity Ratio Financial Leverage/Debt Rations > Investment/Market Ratios You are required to prepare a report for the company. The report should have the following features: (a) Beautiful back-page with appropriate title (b) Executive Summary (c) Table of Content (d) Introduction in terms of what the document is about The introduction should talk about the following i. Background of the report ii. Scope and objective of the report iii. Sources of information in preparing the report iv. Structure of the report (e) Analysis of the macroeconomic situation and how it affects the company i.e. the economic and political situation in Ghana (f) Analysis of the industry in which the company operates which must include the following: i. Industry Background ii. The key players in the company industry and their market share iii. The degree of competitive and basis of competition. iv. Industry Regulation and impact on performance (g) Analysis of the company i. The company's background ii. Products and Services iii. Company position in the industry-market share (h) Analysis of the trends of the various ratios calculated for a five-year period This should discuss the following (in very brief) i. Trend in the form of a graph in each of the ratios you have calculated ii. Analysis or explanation of the trend in the ratios computed (i) You are also required to advice the various category of stakeholders such suppliers, creditors, shareholders, bondholders etc. of the ratios which they are interested in as to what to do i.e. whether they should provide credit or invest in the company or not and why, in terms of your view and observation on the analysis of the various ratios (j) You are also required to explain which category of ratios has performed well over the five-year period.

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 85PSA
Question
You are a researcher and an investment advisor with an
investment bank. Your company is planning to develop its own
financial statement analysis to track the performance of its
portfolios in a particular listed company in the Ghana Stock
exchange. So far, the company has portfolios which consist of
the equities of companies in the following sectors of the
economy
⚫ Financial
- Manufacturing
The manufacturing category includes all companies that are non-
financial. You have been asked to calculate financial ratios for a
five-year period of the chosen company based on the following:
Profitability ratios
> Efficiency/Activity Ratios
Liquidity Ratio
Financial Leverage/Debt Rations
> Investment/Market Ratios
You are required to prepare a report for the company. The report
should have the following features:
(a) Beautiful back-page with appropriate title
(b) Executive Summary
(c) Table of Content
(d) Introduction in terms of what the document is about
The introduction should talk about the following
i. Background of the report
ii. Scope and objective of the report
iii. Sources of information in preparing the report
iv. Structure of the report
(e) Analysis of the macroeconomic situation and how it
affects the company i.e. the economic and political
situation in Ghana
(f) Analysis of the industry in which the company operates
which must include the following:
i. Industry Background
ii. The key players in the company industry and their market
share
iii. The degree of competitive and basis of competition.
iv. Industry Regulation and impact on performance
(g) Analysis of the company
i. The company's background
ii. Products and Services
iii. Company position in the industry-market share
(h) Analysis of the trends of the various ratios calculated for a
five-year period
This should discuss the following (in very brief)
i. Trend in the form of a graph in each of the ratios you
have calculated
ii. Analysis or explanation of the trend in the ratios
computed
(i) You are also required to advice the various category of
stakeholders such suppliers, creditors, shareholders,
bondholders etc. of the ratios which they are interested in
as to what to do i.e. whether they should provide credit or
invest in the company or not and why, in terms of your
view and observation on the analysis of the various ratios
(j) You are also required to explain which category of ratios
has performed well over the five-year period.
Transcribed Image Text:You are a researcher and an investment advisor with an investment bank. Your company is planning to develop its own financial statement analysis to track the performance of its portfolios in a particular listed company in the Ghana Stock exchange. So far, the company has portfolios which consist of the equities of companies in the following sectors of the economy ⚫ Financial - Manufacturing The manufacturing category includes all companies that are non- financial. You have been asked to calculate financial ratios for a five-year period of the chosen company based on the following: Profitability ratios > Efficiency/Activity Ratios Liquidity Ratio Financial Leverage/Debt Rations > Investment/Market Ratios You are required to prepare a report for the company. The report should have the following features: (a) Beautiful back-page with appropriate title (b) Executive Summary (c) Table of Content (d) Introduction in terms of what the document is about The introduction should talk about the following i. Background of the report ii. Scope and objective of the report iii. Sources of information in preparing the report iv. Structure of the report (e) Analysis of the macroeconomic situation and how it affects the company i.e. the economic and political situation in Ghana (f) Analysis of the industry in which the company operates which must include the following: i. Industry Background ii. The key players in the company industry and their market share iii. The degree of competitive and basis of competition. iv. Industry Regulation and impact on performance (g) Analysis of the company i. The company's background ii. Products and Services iii. Company position in the industry-market share (h) Analysis of the trends of the various ratios calculated for a five-year period This should discuss the following (in very brief) i. Trend in the form of a graph in each of the ratios you have calculated ii. Analysis or explanation of the trend in the ratios computed (i) You are also required to advice the various category of stakeholders such suppliers, creditors, shareholders, bondholders etc. of the ratios which they are interested in as to what to do i.e. whether they should provide credit or invest in the company or not and why, in terms of your view and observation on the analysis of the various ratios (j) You are also required to explain which category of ratios has performed well over the five-year period.
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