Horizontal and vertical analysis of the Income Statements

This Portfolio Project has two parts: calculations (excel) and a 4- to 6-page essay. While the calculation requirements of this assignment are important, equally important are your discussion and analysis of the quantitative results. You will submit two documents: 1) a spreadsheet containing your horizontal and vertical analysis (and perhaps your ratios) and 2) a word document containing your essay.
Choose a publicly traded company and perform an expanded analysis on the financial statements. Please use the most current 10K statements available on www.sec.gov http://www.sec.gov or annual statements in finance.yahoo.com http://finance.yahoo.com. You will submit both parts separately.

Part 1: Put answer in Excel spreadsheet:

1. Horizontal and vertical analysis of the Income Statements for the past three years (all yearly balances set as a percentage of total revenues for that year).
2. Horizontal and vertical analysis of the Balance Sheets for the past three years (all yearly balances set as a percentage of total assets for that year).
3. Ratio analysis (eight ratios of your choosing) for the past three years PLUS a measurement for the creditworthiness of your firm as measured by Altman’s Z-score.  Note that if you used your chosen firm for our ratio-related discussion posts, then you MUST also present industry-average ratios or current year competitor ratios for your ratio analysis. Comparing your firm’s ratios to a close competitor or an industry-average ratio makes your analysis much more meaningful.

Part 2: The Paper:

• 4-6 pages in length.
• Include a proper introduction and conclusion.
• Include a reference page.
• Your paper should provide your reader with an overall understanding of the financial health of your chosen firm including the following:
• • Discussion of the ratio analysis results, including rationale for the ratios chosen.
  • Discussion of all horizontal and vertical analysis from above.
  • Discussion of four items from the management discussion of the firmthat support the conclusion formed in your discussion of the financial results.