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Topic:

Vertical, Horizontal, and Ratio Analysis of Micron Technology Inc.

Essay Instructions:

Financial statements are reports that summarize all the accounting transactions that have taken place during a specific period of time.

Choose a publicly held company and, using the Internet, review its most current annual report. Evaluate the health of the corporation you picked based upon your analysis of its financial statements: balance sheets, income statements, cash flow statements, and statements of shareholders' equity. Then, research a similar sized competitor for comparison.

Instructions

Write a 3–4 page report suggesting ways to improve the company's financial health.

Conduct a vertical, horizontal, and ratio analysis on four financial statements.

Compare the ratio, which includes liquidity, profitability, and solvency, with the industry benchmark and one other comparable competitor.

Synthesize the results of the three financial analysis tests to determine the overall health of the organization.

Present an accurate interpretation of the company's current financial health, including risks. Support your conclusions.

Recommend three ways to improve the company’s financial health, including one example for each that has been used in the industry.

Use three sources to support your writing, including the web address of your chosen company. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment.

Essay Sample Content Preview:

Vertical, Horizontal, and Ratio Analysis of Micron Technology Inc.
Student Name
University
Course
Professor Name
Date
Vertical, Horizontal, and Ratio Analysis of Micron Technology Inc.
Vertical and Horizontal Analysis
Vertical and horizontal analyses are essential to an organization since they compare performance between items and periods. Shim (2022) asserts that vertical analysis is a technique that experts use to analyze financial accounts by listing the line items as percentages of their prior periods' figures. On the other hand, horizontal analysis is a procedure that specialists use to analyze or compare a business's performance over time.
1 Horizontal analysis formula = ([current period figure- prior period figure]/ prior period figure) X100
2 Vertical analysis formula (income statement) = (income statement item/total sales) X100
3 Vertical analysis formula (balance sheet) = (balance sheet item/total assets[liabilities]) X100
4 Vertical analysis formula (cashflow statement) = (cashflow statement item/ cashflow from corresponding activities) X100
5 Vertical analysis formula (statement of shareholders' equity) = (statement of shareholders' equity item/ shareholders' equity) X100
Vertical and Horizontal Analysis (Income Statements)
Particulars

31/08/2022
Million US $

31/08/2021
Million US $

Horizontal Analysis

Vertical Analysis




Difference Million US $

Difference (%)

31/08/2022
(%)

31/08/2021
(%)

Revenue

30,758

27,705

3,053

11.02

100.00

100.00

Cost of goods sold

16,860

17,282

(602)

(3.48)

54.82

62.38

Gross profit

13,898

10,423

3,475

33.34

45.18

37.62

Operating expenses

4196

4,140

56

1.35

13.64

14.94

Operating income

9,702

6,283

3,419

54.42

31.54

22.68

Non-operating expenses

131

65

66

101.54

0.43

0.23

Pre-tax income

9,571

6,218

3,353

53.93

31.12

22.44

Income taxes

888

394

494

125.38

2.89

1.42

Income after taxes

8,683

5,824

2,859

49.09

28.23

21.02

Other incomes

0

0

0

0

0

0

Net income

8,683

5,824

2,859

49.09

28.23

21.02

Data source: Macrotrends (2023a)
Vertical and Horizontal Analysis (Balance sheets)
Particulars

31/08/2022
Million US $

31/08/2021
Million US $

Horizontal Analysis

Vertical Analysis




Difference Million US $

Difference (%)

31/08/2022
(%)

31/08/2021
(%)

Cash on hand

9,331

8,633

698

8.09

14.08

14.67

Receivables

5,130

5,311

(181)

(3.41)

7.74

9.02

Inventory

6,663

4,487

2,176

48.50

10.05

7.62

Other current assets

657

1,476

(819)

(55.49)

0.99

2.51

Total current assets

21,781

19,907

1,874

9.41

32.86

33.83

Fixed assets

44,502

38,942

5,560

14.28

67.14

66.17

Total assets

66,283

58,849

7,434

12.63

100.00

100.00

Total current liabilities

7,539

6,424

1,115

17.36

46.04

43.07

Total long-term liabilities

8,837

8,492

345

4.06

53.96

56.93

Total liabilities

16,376

14,916

1,460

9.79

100.00

100.00

Vertical and Horizontal Analysis (Cashflow Statements)
Particulars

31/08/2022
Million US $

31/08/2021
Million US $

Horizontal Analysis

Vertical Analysis




Difference Million US $

Difference (%)

31/08/2022
(%)

31/08/2021
(%)

Net income/ loss

8,687

5,861

2,826

48.22

57.22

47.01

Depreciation and Amortization

7,116

6,214

902

14.52

46.87

49.84

Other non-cash items


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