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Financial Analysis Explanation

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This assignment is designed to teach you how to research a company of your choice. You will be performing an analysis of the financial statements of a publicly traded company.

1. To obtain these financial statements. you will need to access http://www.sec.gov/ 2. Once you are on the SEC website, click on "Company Filings" in the top right corner of the page, located under the search box. 3. You may then search by the company name or ticker symbol to locate the company you want to research. 4. Once you have obtained your company's financial statements, it is time begin your analysis. Within your analysis you must include, but are not limited to, the following information:  The company's current ratio,  debt to equity ratio,  return on equity, and  whether the company is improving over time. 5. You will need to support your analysis with at least one scholarly reference from the CSU Online Library. It is recommended that you use Business Source Complete for your database search, but, again, it is only a recommendation. Use your scholarly reference(s) to support your analysis of the company and its financial statements.

Your essay should be a minimum of two pages in length and follow APA guidelines

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Solution Preview

In accordance with BrainMass standards this is not a hand in ready assignment but is only background help.

Step 1
The company selected by me is Wal-Mart Stores Inc, the financial statement (annual) available at: http://www.sec.gov/
Is obtained. From this statement thee ratios have been calculated. These are current ratio = 0.86, debt to equity ratio = 0.59 or 59.05%, and return on equity is 17.23%.
The current ratio is the current assets divided by current liabilities. This ratio is used to understand the company's liquidity or ability to pay off short term debts. Since the current ratio of Wal-Mart is less than one the company may have problems in paying off its short term obligations (a).
The debt to equity ratio is for measuring Wal-Mart's financial leverage. It was calculated by dividing Wal-Mart's total debt by its shareholders' equity. The ratio indicates how much debt Wal-Mart is using to financier its assets. ...

Solution Summary

This posting gives you a step-by-step explanation of financial analysis of a public company. The response also contains the sources used.

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