Financial Statement Analysis

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Part One: Company Analysis

The following is a summary of performance data of FedEx over a three-year period:

(in millions)
Year 1
Year 2
Year 3
Sales
34,734
39,304
42,680
Cost of Goods Sold
33,550
37,852
40,648
Net Income
1,184
1,452
2,032
Assets
25,654
27,385
29,903
Total Debt
11,695
10,498
13,926
Equity
15,654
15,220
14,727
Operating Cash Flow
1,998
2,378
3,186
Investment Cash Flow
-2,781
-3,419
-4,049
Financing Cash Flow
-692
-287
-244

Required:

Given the information in the table above, calculate the following:

  • Profit margin on sales
  • Return on assets
  • Return on equity
  • Total debt to total assets
  • Total asset turnover

Explain and evaluate your results as they pertain to profitability, debt, and asset turnover for the company over a three-year period.

Part Two:  Final Project Week 4: Issues and Interests of Investors and Other Stakeholders; Analysis of Company Performance

Required:

  1. Identify two items or issues that cannot be derived from the financial statements of the two companies that you selected for your research. Explain why these items or issues would be of concern to investors and other stakeholders. In your rationale, address the specific interests of the different users of financial statements.
  2. Compare and contrast the two companies in terms of how well or how poorly they are performing in the areas of profit, debt, and asset turnover. Use appropriate ratios in your analysis. Indicate strategies for possible improvement in each area.

Deliverables:

  1. By Week 4, Day 6, submit your answers to the questions in Part One, using an MS Excel document, to the W4: Assignment 2 Dropbox. Use good form, and show all your calculations and conclusions.

    Name your document SU_FIN4060_W4_A2_Part1_LastName_FirstInitial

  2. By Week 4, Day 6, address the issues for the Final Project, Week 2 outlined in Part Two, using an MS Excel document. Show all your calculations and conclusions. Submit your document to the W4: Assignment 2 Dropbox. Use good form, and cite all sources using APA format.

    Name your document SU_FIN4060_W4_A2_Part2_LastName_FirstInitial

 
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