Math 80

Capstone Project

Financial statements play a crucial role when it is time to make any investment decision
regarding your organization. The process of financial statement analysis is the
selection, evaluation, and interpretation of the financial data. With the help of financial
statement case study analysis, you can measure the financial performance of past and
present of your company.
The financial statement analysis is considered essential proves that it revolves around
analyzing numerous company financial documents. With the help of this report,
individuals take the business decision. The data of financial statement analysis reports
vary from company to company.

Context of the Capstone

You and two other of your Math 80 classmates have decided to give back to the
community and utilize some of the skills acquired over the semester. A Not-for-Profit
organization requires analysis of their financial statements and recommendations for
future decision making. Your group task is to analyse the financial statement and
provide feedback to the organization that will assist in their decision making.
It is worthy to analyzing the company’s performance with time. We will analyse over two
years. The financial statement is divided into various categories, which are in the
following ways.
Here come some kinds of the financial statement which will clear your doubt about
various aspects:
Balance Sheet
The balance sheets explicate what the organization owns and owes. These balance
sheets signify the investment quality, capital adequacy, capitalization structure, and
asset performance. Additionally, the balance sheet includes the:

• Assets
• Liabilities
• Equity

Shareholder’s Equity
The term equity stands for what the shareholders own. Due to that, it is known as
shareholder’s equity. The individual needs to work on whether the company has issued
the shares or by purchasing again. He works on a finding by which way companies
utilize the capital and generate the returns.
Cash Flow Analysis
The cash flow statement mentions the information about by which way cash is
generated and further utilized in the firm. Additionally, the cash flow statement is divided
into three categories which are in the following ways:

• Operating activities
• Investing activities
• Financing activities

Income Statement
The main purpose of creating this statement is to look for the company earning that how
much they earned in the specific time period. They draft the quarterly and annual
reports. The income statement includes:

• Operating expenses
• Depreciation
• Net income
• Earnings per share

So, these are some common kinds of financial statements. After reading the information
mentioned above, you have the information about the financial statement and its type.
Now, it’s time to write or conduct the financial statement analysis report.
Task 1: Give a brief overview. (5 marks)
Find a Financial Statement on the internet. Not for profit organizations must disclose
their financial statements to the public.
Here are some items to consider; however, you are not limited to the following.
• What is the mission statement for the club?
• Who does the organization service?
• How is the organization funded?
• How long has the organization been in existence?
Task 2: Create a Visual Representation of the data, utilizing the graphing function
in Excel. (Total 30 marks) Breakdown is below.
Your goal is to paint a picture of the overall performance of the organization and
highlight any areas of particular interest.

Vertical Analysis

In the case of vertical analysis, individuals read a single column in the financial
statement.
Graph 1: Overall representation of the organization for the two most recent years,
separately.
Create a pie chart with the totals for the variables: Cash, Accounts Receivable, Capital
Assets, Revenue, Debt and Funding for both previous two years. Two pie graphs should
be created. One graph for each year. (10 marks)
Analysis the graphs. Which are the largest sections of the pie graph? Which are the
smallest? By what factor are these areas bigger or smaller? Are there any surprising
changes from one year to the next? (5 marks)

Horizontal Analysis

The process of horizontal analysis is all about reading the current financial data
compared to the previous reporting periods. It is also named as the trend analysis.
Graph 2: Comparison of three or four factors that have significantly changed over the
two years.
Create a bar graph that displays three or four of the factors in the financial statement
that have the most drastic changes between the two years. (10 marks)
Analysis of graph. Make a recommendation regarding your findings in the graph. Is this
an issue that should be monitored? Do you see an area for improvement or growth? (5
marks)
Full marks will be awarded to graphs containing the following components: Axes
are labelled; Graph has a title; Appropriate scale has been used.
Task 3: Math Calculations (50 marks) Breakdown Below

Liquidity

It is essential to know that either the organization has liquid sources or not.

Liquidity Ratio:

It provides information about how liquid a company is. It can recognize the ability of the
company to stay in business. The liquidity ratio consists of the cash coverage ratio,
current ratio, and many more.

1. Calculate the Current Ratio for the most current year. Report this ratio in
simplified form and in decimal form. How do you assess your organization’s
Liquidity, based on this ratio? (5 marks)

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑠𝑡𝑠: 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

Recall Percent Change: Formulas for Percent change and New number are below.

𝑁𝑒𝑤 𝑁𝑢𝑚𝑏𝑒𝑟 − 𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙 𝑁𝑢𝑚𝑏𝑒𝑟

𝑂𝑟𝑖𝑔𝑖𝑛𝑎𝑙
𝑁𝑒𝑤 𝑁𝑢𝑚𝑏𝑒𝑟 =
1 ± 𝑝𝑒𝑟𝑐𝑒𝑛𝑡 𝑐ℎ𝑎𝑛𝑔𝑒

2. Calculate the Percent Change for the three or four significantly different factors
you chose to graph in Task 2. (15 marks)

The organization has debt. Assume the debt is not paid and retroactive interest of
6.2% compounded quarterly is added to the loan.

3. Calculate the Future value of the Debt to be paid in full on in one year. (5 marks)
Equivalent Values

4. Assume the future value of the debt will be paid with two different options.
Calculate the payment(s) required for each option (25 marks)

Option 1: Three equal payments will be made on March 31, June 31, and September
31 next year to extinguish the entire debt. How much are each of the payments?

Option 2: A payment of $15,000 will be made on April 31 with a final payment on

Assume 6.2% compounded quarterly.

Task 4: Presentation (25 marks) Breakdown Below

Create a PowerPoint or video presentation with all of your findings and upload it to the
Dropbox in Blackboard.

Slides are organized and display pertinent information (15 marks)

Voice over (10 marks)

Overall Professional Presentation (5 marks)

Task Marks awarded

5
Task 2- Graphs and Graph analysis
Graphs have axis titles and Main title
Scale is appropriate and labeled
Analysis contains an overview of the
graphical findings and recommendations 30
Task 3 – Math Calculations
All work is shown including formulas and
timelines.

50
Task 4 – Presentation
PowerPoint is professional
Important information is displayed
Voice is recorded on each slide
15
Group Members (up to three): _____________________________________________

Total Final Capstone Grade