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To select a big-name firm and effectively analyse its recent financial statements of a firm by discussing and addressing of three key areas: 1

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To select a big-name firm and effectively analyse its recent financial statements of a firm by discussing and addressing of three key areas:

1. Firm’s financial statements structure,

2. The main financial and economic characteristics of the sector in which the selected firm operates,

3. The strategies that the firm follows to distinguish itself from its competitors.

Once you complete the selected financial statements analysis you should answer the following questions:

1. Can we really trust the numbers that are being provided?

2. How these numbers are perpetrated sometimes to mislead the Financial Statements users.

3. How to detect them.

The word limit for this assignment is 3,000 words (+/- 10%); excluding graphs and tables.

You are expected to support your work with sources from the literature and use Harvard referencing style as appropriate, in text and in the list of references at the end of your assignment.

Financial Statement Analysis – Important teacher notes From the lecture: Analyze the recent financial statements, you need to debate and discuss three critical areas: 1. The firm or the selected company’s financial statement structure. When I say structure, I mean the time of the main financial statement that they published to the public. Why they published or why they stated their financial statement with these specific items. 2. The main financial and economic characteristics of the sector in which the selected company trades or operates in, you need to discuss the segment or environment that (… can’t understand the word) for this selected company. 3. You need to discuss the strategies that the selected company adopts to distinguish itself from its competitors. Once you debate all the mentioned points, then you need to answer the three following questions: 1. Can we really trust the numbers that are being provided in the financial statements? If yes, then you need to provide why we should trust these numbers. If no, which is the highly likely the correct answer, then you need to discuss some cases or at least an example where financial statement users found out some numbers or some values in the financial statement provided wrongly or in misleading purposes. 2. You need to answer how these numbers are used by managers, accountants, auditors, specifically internal auditors to mislead the financial statement users in taking their economic decisions or investment decisions. 3. Finally, you need to detect some values or find or investigate if there is any value or figure used to mislead the financial statement users on the selected company that you have discussed in your assignment. Besides this explanation, for the second or third time (for sure at least second time), you have the reading list uploaded in the Moodle page. If you read the reading list, there are 9 important documents, but please do your own research also and find more sources, the more you read, the more understandability you get from this assignment. Questions and Answers Email - From Faisal Aljasim to Ms. Majedh: Q1: Is it supposed to be an essay or a report? A: Let's say a mix between both of them. Why? because in the first section it’s going to be similar to a report. Then later, as you answer these questions, it will be more like an essay. If you want Faisal, build the headings for your assignment and then email them to me, feel free to email me about it. Q2: Do I need to analyze the public listed company aspect of the company I have chosen? E.g., EPS (Earnings per share) A: This type of analysis is called financial analysis rations, what this coursework requires is that: 1. Firm’s financial statements structure, 2. The main financial and economic characteristics of the sector in which the selected firm operates, 3. The strategies that the firm follows to distinguish itself from its competitors. Q3: What is exactly meant by financial statement structure? Can you give me any examples? A: Financial structure means how the selected company presents its financial statements in mixing its debt and equity that a company uses to finance its operations. Besides, how this structure directly affects the firm risk and value. Usually, a firm’s management has the responsibility of how to create the best combination of debt and equity for optimizing the firm financial structure. Q4: For the analysis, how many years do I have to do? Is it enough if I use 2019 and 2020 or do I need to add more years? A: Two to three years are enough Q5: In the analysis, are the financial ratios going to be enough? A: They will be part of the analysis. Q6: Anything which is not mentioned in the assignment but is important when writing a report? A: Definitely and technically there should not be! Just deliver what is required in the coursework guidelines from page one to the last page. Q7: Do I have to consider the market valuation of the company I've chosen? A: Yes! Good idea. Q8: Do we need to include graphs, diagrams, illustrations, and pictures? If the answer is yes, but for some, please tell me which ones to include. If they will demonstrate a better picture to your discussion, why not? Q9: For the format, I attached a picture of the format that I intend on using for the assignment. Is it the proper format or should I add/remove any headings/subheadings in your opinion? And is everything in the right place? A: I can not give any feedback on any written part. Follow-up on Q9 (and what she said in the lecture): I respectfully disagree with what you said, that you can’t answer questions about the assignment structure because it is similar to asking questions in the exam. For the assignments, it is our duty to ask and research as much as possible to reach a certain conclusion. On the other hand, for exams, we are supposed to prepare so that when we enter the exam, questions will not be allowed. A: Okay, If you want me to give you any feedback for only the assignment structure, then email me. But don’t expect me to give a lot of feedback, one statement is enough. This is just extra from me.