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    Phase II FSA Individual Assignment Expectations

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    Phase II FSA Individual Assignment Expectations

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    Phase II FSA Individual Assignment Expectations (1)

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    Phase II FSA Individual Assignment Expectations

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    Institute of Management Nirma University | Integrated BBA-MBA Programme

    Batch: 2018-23 | Term VIII | Financial Statement Analysis (FSA)


    Individual Assignment: Guidelines and Expectations | Phase - II

    Objective: Being able to read, analyze and interpret company annual reports is possibly the best
    reality check on your understanding and application of FSA. From the perspective of a user of annual
    reports, the objective of this assignment is to be able to analyze, interpret and compare the financial
    position of companies from the perspective of different users of financial information for decision-
    making.
    Scheme: Each student is allotted ONE company from CNX 200 list. The student shall download the
    latest five years published annual report from the official website of the respective companies and
    downloads the required financials (Balance Sheet, Statement of Profit and Loss and Statement of Cash
    Flows from the database available in the Institute’s Library.

    Evaluation: This phase of the assignment weighs 15% in the course grading. A viva or presentation
    will be held after submission of phase-II report.

    Submission: Monday March 7, 2022 by 07:00 pm

    1. Financial Analysis I (Word Limit: 2000 for each company)


    1. Horizontal Analysis: Present the horizontal analysis of the latest two years vis-à-vis the year
    previous to that for the condensed (key line items only) Statement of Profit and Loss, the
    Balance sheet and the Cash Flow Statement. Present a meaningful interpretation of this
    horizontal analysis.

    2. Vertical Analysis: Present the vertical analysis of the last five years for the condensed (key line
    items only) Statement of Profit and Loss, the Balance sheet and the Cash Flow Statement (here,
    assign EACH aggregate of the Cash Flow from Operating, Investing and Financing activities as
    100 and reflect the sub-items as its percentage). Present a meaningful interpretation of this
    horizontal analysis.

    3. Trend Analysis: Present the trend analysis of the last five years ONLY for the KEY METRICES
    of Statement of Profit and Loss, the Balance sheet and the Cash Flow Statement. Present a
    meaningful interpretation of this horizontal analysis.

    4. Compute 10-year CAGR for all key items of Balance sheet, Statement of Profit and Loss and
    Statement of Cash Flow. Present a meaningful interpretation of these. Word Limit for
    interpretation: 750

    2. Capital Market Analysis


    5. How has the company’s stock done over the last 5 years in absolute (standalone) terms and as
    compared to the broader benchmark index and the economy? Present a meaningful
    interpretation of this analysis.

    6. How has the company’s market cap changed over the last 5 years? Comment on this.

    3. Financial Analysis II
    7. Profitability: compute all possible profitability ratios for the company for last five years. Carry
    out a DuPont and Alternate DuPont analysis for both the companies for that five years. Present
    a meaningful interpretation of these ratios and computations and comment on the
    profitability. Word Limit for each company interpretation: 750

    Page 1 of 3
    8. Liquidity: compute all possible liquidity ratios for the company for last five years. Present a
    meaningful interpretation of these ratios and comment on the liquidity position. Word Limit
    for each company interpretation: 750

    9. Efficiency: compute all possible efficiency ratios for the company for last five years. Present a
    meaningful interpretation of these ratios and comment on the efficiency. Word Limit for each
    company interpretation: 750

    10. Solvency: compute all possible solvency ratios for the company for last five years. Present a
    meaningful interpretation of these ratios and comment on the solvency position. Word Limit
    for each company interpretation: 750

    11. Cash Flow Analysis: compute all possible ratios associated with Cash Flow Statement for the
    company for last five years. Present a meaningful interpretation of these ratios and comment
    on the solvency position. Word Limit for each company interpretation: 750

    4. Analysis of Quality of Financial Reporting:


    12. Highlight accounting ‘red-flag(s)’ (if any) pertaining to the quality of earnings reported by the
    two companies. Comment on the implications of such accounting practices on the future
    performance of the company. Word Limit for interpretation: 1000

    References
    13. List all the references here

    References: List all the references here

    Important Guidelines:
    1. Appropriate and appealing presentation of analysis is an integral part of the report. Students are
    expected to make use of all the relevant tools of presenting their reports in a better way. Carryout
    proper formatting of the report before submitting.
    2. You MUST follow EXACTLY SAME formulas and approach to compute ratios and perform required
    analysis for all the years.
    3. Appropriate and appealing presentation of analysis is an integral part of the report. Students are
    expected to make use of all the relevant tools of presenting their reports in a better way. Carryout
    proper formatting of the report before submitting.
    4. It is compulsory to share soft copy of the following at the time of submission;
    a. A worksheet containing all the calculations with inbuilt formulas, cell references and all
    required line items from the financial statements. (.xls file, one file) Financial Ratios and all
    other calculation cannot be value pasted.
    b. A soft copy of the assignment (.docx file, one .xls file)
    5. References (include all the books, articles, web-links, reports referred/used in the project)
    6. Provide Statement of Profit and Loss, the Balance Sheet and the Cash Flow Statement along with
    the soft copy in excel files.
    7. A format of front page will be provided. Report in shabby state will attract negative marking as
    per the rubric.
    8. All the report files will be put through a plagiarism check software as per the university policy. Any
    plagiarism in excess of 10% will have to be re-worked by the student.
    9. You cannot share/publish this project report in public domain without the permission of the faculty
    because this is part of FSA course evaluation till the assessment and grade of the course is not
    declared. However, the copyright of the report rests with the student.

    Page 2 of 3
    Indicative List of Financial Ratios (not exhaustive list)

    A Margin Ratios G Solvency / Financial Stability Ratios


    1 Gross Margin (%) 1 Unlevered Free Cash Flow
    2 Operating Expenses Ratio (%) 2 Total Debt/Equity (%)
    3 EBITDA Margin (%) 3 Interest Coverage
    4 EBIT Margin (%) 4 Total Debt/Assets (%)
    5 Return on Capital Employed (ROCE)

    B DuPont Analysis H Cash Flow Statement Related Ratios


    1 Net Profit Margin 1 Free Cash Flow / Total Debt
    2 Asset Turnover 2 CF-Operations / Net Profit
    3 Equity Multiplier 3 Growth in CF-Operations
    4 Return on Equity (ROE) 4 CF-Operations / Net Sales

    C Alternate DuPont Analysis 5 Share Price to OCF per share Ratio


    1 NOPAT Margin 6 CF-Operations / Current Liabilities
    2 Operating Assets/Net Sales 7 CF-Operations / Total Liabilities
    3 Return on Operating Assets (ROOA) 8 CF-Operations / Total Assets
    4 Spread 9 Cash Generating Power Ratio
    5 Net Debt/Equity 10 CF-Financing / CF-Operations
    6 Return on Equity (ROE)

    D Growth Ratio
    1 Net Sales Growth(%)
    2 EBITDA Growth (%)
    3 EBIT Growth(%)
    4 PAT Growth(%)

    E Liquidity Ratios
    1 Current Ratio
    2 Quick Ratio
    3 Cash Ratio
    4 Operating Cash Flow Ratio

    F Working Capital Management Ratios


    1 Operating Working Capital Turnover
    2 Receivables Turnover
    3 Inventory Turnover
    4 Days' Receivable
    5 Days' Inventory
    6 Days' Payable
    7 Cash Conversion Cycle

    Page 3 of 3

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