Evaluate a Company’s financial health

Throughout your accounting program at Strayer University, you have practiced understanding, analyzing, and creating financial statements, as well as the importance of Generally Accepted Accounting Principles (GAAP) in those activities. In this assignment, you will show mastery by using financial statements for the chief reason they are created, to determine a company's financial health, including its ability to stay in business, generate profit, and grow. Prepare Complete the media, Financial Statement Analysis Links to an external site.. This media activity was created to help you with the assignment. It reviews financial analysis tests, provides a structure for your financial analysis report, and offers practice opportunities for identifying types of financial analysis. Gather the last two years' annual reports from a company you will analyze for the assignments in weeks 3, 5, and 8 of this course. In addition, gather two years of annual reports for a company in the same industry. You will use the information about the second company for comparisons. The ACC 499 page of the BASC Library Guide offers insight into using the Nexis Uni database to select companies. Instructions Write a 3–4 page report about your calculations and synthesis of the results: Explain the significance of financial statements that are prepared according to GAAP by a publicly held company. In your explanation, include summary information about the following: Why do companies prepare financial statements? What are the steps in preparing financial statements? What is GAAP? Why is GAAP important in this process? Conduct 4 horizontal and 4 vertical analysis tests on the 2 companies' financial statements. Include the correctly labeled results in your paper, placing the results of the same test for each company side-by-side for the best comparison. Write a brief description of the components of each test. Conduct 4 liquidity ratio tests, 4 profitability ratio tests, and 4 solvency ratio tests for both the company that you have chosen and its competitor. Present and describe the correctly labeled results in your paper, placing the results of the same test for each company side-by-side for the best comparison. Analyze the results of the financial analysis tests on the selected company. Include the following as needed for the tests you conducted. Summarize the results of the horizontal and vertical analysis. Explain the liquidity, profitability, and solvency ratios. Compare financial metrics to company expectations, competitors, and industry averages. Synthesize the results of the above financial analysis tests to determine the overall health of your company compared to its competitors and the industry averages. Identify strengths and weaknesses, discuss potential contradictions between test results, and draw conclusions based on your analysis. Integrate information and insights based on relevant research and knowledge of the company, industry, or overall economy. Diagnose the overall health of the company, supported by references to the results of your analysis. Research current and future uses of AI in financial statement preparation, analysis, and presentation. Based on your research, describe current and predicted applications of, as well as concerns about, AI in financial statement preparation, analysis, and presentation. Use three sources to support your writing. Choose sources that are credible, relevant, and appropriate. Cite each source listed on your source page at least one time within your assignment. For help with research, writing, and citation, access the library, or review library guides. This course requires the use of Strayer Writing Standards (SWS). The library is your home for SWS assistance, including citations and formatting. Please refer to the Library site for all support. Check with your professor for any additional instructions. The specific course learning outcome associated with this assignment is: Analyze financial statements to inform decision-makers about the financial health of the company.