financial statement analysis

Unit 1 Deliverable Length: 1,000 words + Excel spreadsheet.

A financial team has been properly selected and charged to proceed with its analysis of EEV’s financial statements. In the course of its evaluation, it will be assessing the firm’s operating performance, benchmarking its competitors, and looking at the industry using financial ratios as its source of measurement.

The income statement measures the firm’s profitability over a period of time: 1 month, 1 quarter, or 1 year. The statement focuses on the operations of the firm and explains what was produced and sold. In essence, it summarizes revenues generated and the results.

Tony understands that managing profitability involves overseeing 3 interrelated factors: volume, cost, and price. He has given you the job of conducting an in-depth analysis of EEV’s operating performance. You will analyze the following factors:

Sales volume, cost, and price of each specific product
Each product’s contribution to sales in terms of profit
The relationship between sales and supportive employment
Tony has made it clear that he expects you to initiate a constructive discussion by describing your findings both in narrative form and through an organized numeric presentation.

Click here to view the EEV income statement, and then complete the following in your paper:

Review the sales volume, cost, and price of each specific product.
Review each product’s contribution to sales in terms of profit.
Describe the relationship between sales and supportive employment.

Unit 2
Deliverable Length: 1,200 words + Excel spreadsheet

The financial team has been properly selected and charged to proceed with their analysis of EEV’s financial statements. In the course of their evaluation, they will be assessing the firm’s operating performance, benchmarking their competitors, and looking at the industry using financial ratios as their source of measurement. However, the chief executive officer (CEO) of Electronic Equipment USA agrees with numerous practitioners who promote the use of nonfinancial measures as well as financial measurements to evaluate the performance of a given firm. Nevertheless, Tony agrees that nonfinancial measurements can be valuable, and he tends to support the premise that when evaluating operating performance, benchmarking competitors, and comparing industry results, nonfinancial measurements have little measurable value.

The CEO of the parent company agrees with numerous practitioners who promote the use of nonfinancial measures as well as financial measurements to evaluate the performance of a given firm. Nevertheless, Tony agrees that nonfinancial measurements can be valuable, and he tends to support the premise that when evaluating operating performance, benchmarking competitors, and comparing industry results, nonfinancial measurements have little measurable value.

Tony has asked you to present a position paper comparing the effectiveness and reliability of using financial measures as opposed to nonfinancial measures. Include the following:

Provide an analysis of the utilization of assets in terms of efficiency (or inefficiency).
What are measurements associated with returns and activity ratios?
Explain why you selected each specific measurement.
Then, review the electronic equipment industry using financial ratios.
Assess the firm’s operating performance against these ratios.
Research the financial reports of 1 company in the electronic equipment industry, and compare it with the performance of Electronic Equipment Venture.
Include an Excel spreadsheet to support your analysis.
Use this information to support your position, and compare the effectiveness and reliability of using financial measures as opposed to nonfinancial measures.

Click here to view the EEV balance sheet.

Click here to view the EEV income statement.