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Choose a publicly traded company and perform an expanded analysis on the financial statements. Use the most current 10K statements available on SEC or annual statements in Yahoo Finance. Complete the following for your chosen firm in an Excel spreadsheet:

  1. Horizontal and vertical analysis of the income statements for the past three years (all yearly balances set as a percentage of total revenues for that year).
  2. Horizontal and vertical analysis of the balance sheets for the past three years (all yearly balances set as a percentage of total assets for that year).
  3. Ratio analysis (eight ratios of your choosing) for the past three years PLUS a measurement for the creditworthiness of your firm as measured by Altman’s Z-score.  Note that if you used your chosen firm for our ratio-related discussion posts, then you MUST also present industry-average ratios or current year competitor ratios for your ratio analysis. Comparing your firm’s ratios to a close competitor or an industry-average ratio makes your analysis much more meaningful.

Example, if you see sales rise by 20%, then shouldn’t you also see net income rise by 20% or more if the managers are effective at controlling costs?  If you see sales rise by 20% and assets rise by 40%, you have to ask why this is happening. It would appear that assets have risen too far given the sales that are generated from those assets—why did this occur?  You may have to research that type of question and discuss it in your analysis.

Review both videos: Performing Vertical Analysis using Excel and Performing Horizontal Analysis using Excel, which demonstrate the completion of vertical and horizontal analysis using Excel. Submit your company ratios on this spreadsheet as well as the vertical/horizontal analysis.


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