Analysing Financial Statements Assignment

Scenario:
You are working as a financial analyst for a consulting firm. Your firm has been approached by a client, ABC Company, to analyse their financial statements and provide recommendations for improvement. ABC Company is a manufacturing company that has been in operation for the past five years.
Task 1: Financial Statement Analysis
1. Analyse the financial statements (Income Statement, Balance Sheet, and Cash Flow Statement) of ABC Company for the last three years.
2. Identify and calculate key financial ratios (e.g., liquidity ratios, profitability ratios, solvency ratios) based on the financial statements.
3. Interpret the results of the financial ratios and evaluate the financial performance of ABC Company.
Task 2: Recommendations
Based on your analysis of ABC Company’s financial statements, provide recommendations for improvement in the following areas:
 Profitability: Suggest strategies to increase profitability and improve the company’s financial performance.
 Liquidity: Propose measures to enhance the company’s liquidity position and manage its short-term obligations.
 Solvency: Evaluate the company’s long-term solvency and suggest actions to strengthen its financial position.
Submission Guidelines
1. Prepare a report summarizing your analysis and recommendations. The report should be well-structured and clearly presented.
2. Include the financial statements, financial ratios, and calculations in an appendix.
3. Use proper referencing and citation where necessary.
Evaluation Criteria
Your assignment will be evaluated based on the following criteria:
 Accuracy and completeness of financial statement analysis
 Appropriate use of financial ratios and calculations
 Quality and relevance of recommendations
 Clarity and organisation of the report
 Proper referencing and citation