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Analysis of a Company's Financial Statements (Example)

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CPI Card Group Inc. Analysis of Financial Statement Student’s Name Institutional Affiliation CPI Card Group Inc. Analysis of Financial Statement CPI Card Group Inc. financial statement reflect the 2015 accounting or fiscal year which started on January 1 2015 and ended on December 31 2015. Per the consolidated statement of financial position for the group the total assets for the year amounted to $280 353 000 and total liabilities were $366 963 000 while the owner’s equity amounted to a deficit of $86 610 000. If the company was liquidated at the end of the 2015 fiscal year the shareholders would not receive the amount on shareholder's equity because it is a negative balance ("CPI Card Group Inc. Form 10-K " n.d.). Besides even if it were a positive balance the shareholders are entitled to the owners' $135 821 000$374 110 000*100=36.3%. There was an increase in the gross profit margin which suggests performance improvement in the company. From the above analysis CPI Card Group Inc. shows healthy financial statements. Although there was negative equity the management utilizes its resources well in generating revenue. Besides the current ratio is above 1 which means that the company is a going concern and has the ability to cater for its short-term obligations as and when they fall due. The observable trend in the profitability ratios shows a company that is improving at an impeccable rate and it would be worth investing in such a company. References CPI Card Group Inc. Form 10-K. (n.d.). Retrieved from Deegan C. (2013). Financial accounting theory. McGraw-Hill Education Australia. James M. W. (2017). Financial Reporting Financial Statement Analysis And Valuation. Cengage Learning. [...]

Order Description:

Write a 2-page paper answering the following questions. You must use the attached file that has the company's profile information to answer all the questions. Make sure you have answered all of the provided questions and computations in your analysis. If a question or computation does not apply, there should be a statement within your memo stating that the aspect does not apply and why. For example: "Based on the review of the XYZ Company, there were no prepaid expenses." Include support for your investment recommendation by citing the company's financial statements and 2 other references in APA format. 1. What were the company's assets, liabilities, and owners' equity amounts at the end of fiscal year? 2. If the company were liquidated at the end of the fiscal year, are the shareholders guaranteed to receive the total shown in your answer for owners' equity (question 1)? Clearly, explain why or why not. 3. What were the company's noncurrent liabilities for the fiscal year? 4. What was the company's current ratio for the fiscal year? 5. For the fiscal year, did the company have a cash inflow or outflow from investing activities? How much? 6. For the fiscal year, how much was the company's cash flow from operations? Why is this not the same amount as the company's operating income? Explain in general terms. 7. What is the company's revenue recognition policy? (Hint: Look in the notes to the financial statements.) 8. Calculate general, administrative, and selling expenses as a percentage of sales for the past three fiscal years. By what percentage did these expenses increase or decrease? This is calculated as Percentage Change = (Current Year % − Prior Year %) / Prior Year %. 9. Compute the company's total asset turnover for the fiscal year and explain its meaning. Show all of your work. 10. How much is in the prepaid expenses and other current assets account at the end of fiscal year? Where did you find this information? 11. What did the company report for deferred rent and other liabilities at the end of fiscal year? Where did you find this information? 12. What is the difference between prepaid rent and deferred rent? 13. What are accrued liabilities? Describe in general terms. 14. What would generate the interest income that is reported on the income statement? 15. What are the company's earnings per share (basic only) for the three years reported? 16. Compute the company's net profit margin for the three years reported. What does the trend suggest to you? 17. How much cash and cash equivalents does the company report at the end of the fiscal year? 18. What was the change in accounts receivable and how did it affect net cash provided by operating activities for the current year? 19. Compute the company's gross profit percentage for the most recent two years. Has it risen or fallen? Explain the meaning of the change. 20. Summarizing your analysis and provide a recommendation on whether or not we should invest in the company or not.

Subject Area: Accounting

Document Type: Research Paper

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Price $15

Words 550

Pages 2

Completed in 2 days

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