GENERAL PROJECT INFORMATION:
We will be conducting a Financial Analysis and Competitor Analysis for two companies in the Toy Industry: Mattel, Inc. and Hasbro, Inc.
This assignment requires TWO FILES (one Excel document and one Word document) to be uploaded by March 29. Do not hit submit until you have selected both files.
Chapter 14 of our textbook describes Financial Statement Analysis, including vertical analysis, horizontal analysis, and several performance ratios used to assess a company.
DELIVERABLES:
- REQUIRED EXCEL FINANCIAL ANALYSIS DOCUMENT:
Use this attached Hasbro 10-K Excel file to do all of the work described below. I will show you how I obtained these Financial Statements from the Securities and Exchange Commission during our first chat. As explained below and demonstrated in our first chat, your BALANCE SHEET and INCOME STATEMENT tabs should each include your Vertical and Horizontal Analyses for 2017 and 2018, and your RATIOS tab should include your Ratio Analyses for 2018.
You must show all cell formula calculations (points will be deducted for entering numbers as your answers–you must keep the formulas for the numbers within each cell).
Be sure to change this file to something with your name in it.
Instructions:
You will be responsible for the following in your modified Hasbro 10-K Excel Document, which I will demonstrate in our first chat:
(1) Vertical Analyses:
Common Size Balance Sheet
Modify the BALANCE SHEET spreadsheet to include a common size analysis for the years ended December 31, 2017 and December 31, 2018. For 2017, each line item should be shown as a percentage of Total Assets on December 31, 2017. Likewise, for 2018, each item should be shown as a percentage of Total Assets on December 31, 2018. In your calculations, round each percentage to one place after the decimal. For example if Cash as a percentage of Total Assets is .054129834, your answer should be shown as 5.4%. We can then analyze these percentages.
Common Size Income Statement
Modify the INCOME STATEMENT spreadsheet to include a common size analysis for the years ended December 31, 2017 and December 31, 2018. For 2017, each line item should be shown as a percentage of Total Revenues on December 31, 2017. Likewise, for 2018, each item should be shown as a percentage of Total Revenues on December 31, 2018. In your calculations, round each percentage to one place after the decimal. For example if Advertising Expense as a percentage of Total Revenues is .186425, your answer should be shown as 18.6%.
(2) Horizontal Analyses of The Balance Sheet and Income Statement:
Add trend analysis for every account in both your BALANCE SHEET and INCOME STATEMENT spreadsheets by showing the percentage change from 2017 to 2018 for each account, calculated as follows:
(2018 Amount – 2017 Amount) / (2017 Amount)
Thus, each account on the Balance Sheet and Income Statement should show a percentage increase or decrease for the year, which we can then analyze. A negative number, or decrease, should be presented in “Accounting” format, which will be shown in parentheses.
(3) Ratio Analyses:
I have provided a RATIOS spreadsheet following the financial statements spreadsheets, which contains many important analysis ratios for this industry (as we will discuss in our first chat) from Exhibit 14-26 of your textbook.
For each of these ratios, you will be required to show your calculations for Hasbro, Inc.‘s 2018 Financial Year only. You will show this work directly in the RATIOS spreadsheet, which I will also demonstrate in our first chat. You must provide the Excel formula for each calculation. Credit will be taken off for showing just the final answer as a number.
*Note: Whenever a ratio calls for an average, take the average of the beginning and ending balances as follows: (2017 Amount + 2018 Amount) / 2.
- REQUIRED WORD DOCUMENT:
ADDITIONALLY, you will be responsible for creating the following Competitor Analysis Word Document:
During our first chat session, we will perform the above Excel analyses for Mattel, Inc., a competitor of Hasbro. This will both serve as an excellent resource as you complete your Hasbro analyses, as well as provide a means of analyzing Hasbro relative to a competitor, which is key in financial statement analysis.
In your Word document, you will compare your results from Hasbro with our results from Mattel. Your analysis may discuss results from the vertical, horizontal, or ratio analyses; HOWEVER, I do not want you to simply state the results for each company. You must really ANALYZE the differences and what they mean.
Therefore, I want you to write a report describing (1) three key ratios or trends that are similar AND (2) three key ratios or trends that are different. For each of these six similarities/differences, you MUST analyze what they mean in terms of each company’s financial performance, calling upon your understanding from our textbook, chat, and/or any other cited references. Again, you must interpret, not just list, your results. I am not looking for exact answers, but rather a deep understanding of the implications of these similarities and differences so I can see you have spent time really studying the Financial Analysis process.
If you use any sources outside of our textbook, you must cite them in proper APA format.
I will provide our completed Mattel, Inc. Excel Analysis in our Week 1 Wrap-Up after our first chat session, where we will be performing the analyses. This will be necessary for your Competitor Analysis Word Document deliverable.
Again, this assignment requires two files to be uploaded: your Excel Financial Analysis and Word Competitor Report files, as described above. Do not hit submit until you have selected both files.
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