Great Deal! Get Instant $10 FREE in Account on First Order + 10% Cashback on Every Order Order Now

Financial statements are reports that summarize all the accounting transactions that have taken place during a specific period of time.Choose a publicly held company and, using the Internet, review...

1 answer below »

Financial statements are reports that summarize all the accounting transactions that have taken place during a specific period of time.


Choose a publicly held company and, using the Internet, review its most current annual report. Evaluate the health of the corporation you picked based upon your analysis of its financial statements: balance sheets, income statements, cash flow statements, and statements of shareholders' equity. Then, research a similar sized competitor for comparison.


Instructions


Write a 3–4 page report suggesting ways to improve the company's financial health.



  1. Conduct a vertical, horizontal, and ratio analysis on four financial statements.

  2. Compare the ratio, which includes liquidity, profitability, and solvency, with the industry benchmark and one other comparable competitor.

  3. Synthesize the results of the three financial analysis tests to determine the overall health of the organization.

  4. Present an accurate interpretation of the company's current financial health, including risks. Support your conclusions.

  5. Recommend three ways to improve the company's financial health, including one example for each that has been used in the industry.

  6. Use three sources to support your writing, including the web address of your chosen company. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment.

Answered 2 days After Jul 01, 2024

Solution

Prince answered on Jul 04 2024
5 Votes
Financial Health Analysis and Improvement Recommendations for Textron Inc.
Student Name
4th Jul 2024
Executive Summary
This report presents an analysis of the financial performance of Textron Inc., a company in multi industry operating through its subsidiaries within aerospace, defense and other industrial segments. By performing vertical, horizontal and ratio analyses using Textron's financial statements as well comparing it to a competitor analysis with General Dynamics due give recommendations of each part on the graphical presentation of its results for this report. The analysis shows that although Textron is in a strong financial position, there are areas of operations along with working capital management and revenue mix where improvement can be made.
1. Financial Statement Analysis
a. Vertical Analysis
Key takeaways using this data as a vertical analysis of Textron's income statement for 2023 are:
· Cost of Sales: 83.4% of Total Revenue
· Gross Profit: 16.6% of Total Revenue
· Selling and Administrative Expenses: 9.0% of Total Revenue.
· Net income: 6.7% of Total Revenue
Roger et al (2019) argue that the successive
eakdown shows a potential for Textron to increase its profitability through reduction of obscene off operating expenses as well improving overall subcontractor gross margin.
The balance sheet vertical analysis for 2023 shows:
· Cu
ent Assets: 46.0% of total assets
· Long-term Assets: 54.0% of total assets
· Cu
ent Liabilities: 26.0% of total liabilities and shareholders' equity
· Long-term Liabilities: 32.6% of total liabilities and shareholders' equity
· Shareholders' Equity: 41.5% of total liabilities and shareholders' equity
This structure indicates the company internally takes a balanced approach to asset management and has relatively high equity through its outstanding share accounts thus allowing greater financial leverage (Titman et. al., 2018)
. Horizontal Analysis
The horizontal analysis comparing 2023 to 2022 reveals several notable trends:
· Total revenues increased by 6.3%
· Gross profit increased by 10.1%
· Net income increased by 6.97%
· Total assets increased by 3.5%
· Total liabilities increased by 7.5%
· Shareholders' equity decreased by 1.8%
This all signals concerning sales expansion but with everything lifting at Textron its now just that, a signal; an impression of strengthening in
oad top and bottom line trends. Yet the rise in liabilities outperforms asset growth, as does the slight decrease of shareholders' equity (Ross et al., 2019).
2. Ratio Analysis
a. Liquidity Comparison
· Cu
ent Ratio: Textron (1.77) vs. General Dynamics (1.44)
· Quick...
SOLUTION.PDF

Answer To This Question Is Available To Download

Related Questions & Answers

More Questions »

Submit New Assignment

Copy and Paste Your Assignment Here