Financial Statement Analysis of [Company Name]: A Three-Year Review of Ratios, Vertical, and Horizontal Analysis

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Oct 2, 2025

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Instructions

Write a research paper on the following. The assignment has four requirements:

· 1.) Select a publicly-traded company that is traded on U.S. exchange. Locate the annual report for at least the last three fiscal years. Analyze the financial statements for the company and review for large movements in specific accounts from one year to the next. In addition, review the notes to the financial statements as these are an integral part of the financial reporting package. Evaluate the balance sheet to determine if there are large changes in the company’s assets, liabilities, or equity accounts. In addition, analyze the income statement and statement of cash flows.

· For this assignment you may NOT use the following companies: Microsoft, Amazon, Walmart, Tesla, Disney, NVIDIA, Apple or Coca-Cola. Submission of a paper using any of these companies will be an automatic zero. Please choose a publicly traded company OTHER than these, and utilize the three most recent years of data for your paper.

· 2.) Calculate the following ratios for two years, the debt-to-equity ratio, current ratio, quick ratio, return on equity, and net profit margin. For each ratio, explain what the ratio tells you about the company.

· 3.) Prepare a vertical analysis of the income statement and balance sheet.

· 4.) Prepare a horizontal analysis of the income statement and balance sheet.

The research paper must include a title and a reference page and be formatted using APA writing style.

Note that your attached paper will automatically be submitted to Turnitin, and an Originality Report should be sent back to the classroom within around 15 minutes. The Originality report does not actually recommend changes. It does point out where you may need to add a citation or quotation marks (if not already cited). Once you use it a few times, you will appreciate this tool, as it will assist you in improving quality and content, as well as avoid plagiarism. Your goal is to keep direct quotations to a minimum and to make sure that you do not just cut and paste material. Ensure that all your references are cited. A report with a similarity index less than 25% is acceptable for undergraduate-level work. Your paper will be evaluated according to the Writing Assignment Grading shown below. To maximize your grade, be sure to use the proper organization (intro, body, conclusion) and follow APA style. Your paper should have a title page and reference page, but you do not need an abstract for this assignment.

Guidelines for Your Research Paper

Struggling with where to start this assignment? Follow this guide to tackle your assignment easily!

1. Introduction (½–1 page)

Introduce the company you selected (must be publicly traded on a U.S. exchange and not one of the restricted ones).
State why you chose this company.
Briefly explain the purpose of the paper (analyzing three years of financial data, ratio analysis, vertical/horizontal analysis).
End with a thesis statement (e.g., “This paper analyzes [Company Name]’s financial performance over the past three fiscal years by examining its financial statements, calculating key ratios, and conducting vertical and horizontal analyses to evaluate trends in financial health and profitability.”).

2. Company Financial Statement Analysis (2–3 pages)

Obtain the company’s last three annual reports (10-K filings) from its investor relations website or SEC EDGAR.
Summarize trends in the balance sheet, income statement, and cash flows.
- Look for big changes in assets, liabilities, or equity.
- Highlight major shifts in revenues, expenses, or net income.
- Identify cash flow drivers (operations, investing, financing).
Use the notes to the financial statements for context (e.g., acquisitions, write-offs, lawsuits, changes in accounting policy).

3. Ratio Analysis (1–2 pages)

Calculate the following ratios for two years (Year 1 vs Year 2, or Year 2 vs Year 3):
1. Debt-to-Equity Ratio = Total Liabilities ÷ Total Equity
2. Current Ratio = Current Assets ÷ Current Liabilities
3. Quick Ratio = (Current Assets – Inventory) ÷ Current Liabilities
4. Return on Equity (ROE) = Net Income ÷ Shareholder’s Equity
5. Net Profit Margin = Net Income ÷ Revenue
For each ratio:
- Provide the calculation.
- Interpret what it means about liquidity, solvency, profitability, or efficiency.
- Compare to industry averages if possible.

4. Vertical Analysis (1 page)

Prepare a vertical analysis for both:
- Income Statement (express each item as % of total sales).
- Balance Sheet (express each item as % of total assets).
Discuss what the percentages reveal about cost structure, capital structure, and efficiency.

5. Horizontal Analysis (1 page)

Prepare a horizontal analysis (trend analysis) for both:
- Income Statement (compare year-over-year changes in revenues, costs, and net income).
- Balance Sheet (compare year-over-year changes in assets, liabilities, and equity).
Highlight where the company grew, contracted, or restructured.

6. Conclusion (½ page)

Summarize key findings from financial trends, ratios, vertical, and horizontal analyses.
State whether the company appears financially strong, improving, or at risk.
Suggest how investors or managers might use this analysis for decision-making.

7. References

Use APA 7th edition formatting.
Include at least 3–5 credible sources (company annual reports, SEC filings, academic articles, financial news, textbooks).
Avoid plagiarism—paraphrase and cite properly.

Remember! It’s just a sample. Our professional writers will write a unique paper for you.

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