The key items that investors should pay attention to when reading the financial statements

by | Sep 27, 2022 | finance

You are a new stock analyst in XYZ research house. You are required to write a report of your target firm GWA Group Limited (ASX code: GWA) to initiate the coverage of the company. The report should be about the fundamental analysis of this firm, including the firm’s financial statements analysis, industry analysis, strategy analysis, financial performance analysis, and your analysis of the current financial status in this firm and your expectations of the future financial status in this firm.
This assignment is more of a test for the understanding of the process rather than just the final conclusion.
In this report, you should cover the following five aspects:
Based on the financial data of the target firm and the other firms in the same industry from the fiscal year 2017 to 2022:
1, Financial Statements Analysis: What are the key items that investors should pay attention to when reading the financial statements of this firm?
You are expected to read the financial statements of this firm in 2019 (before covid). Only three financial statements: Statement of financial position (i.e. Balance Sheet), Statement of profit or loss (i.e. Income statement), and Statement of Cash Flow(i.e. Cash flow statement) are required to analyze in 2019. For each type of statement, please list the specific account/item that you suggest investors pay attention to and explain the reasons. To explain the reasons, you are expected to provide at least one of the trend /common-sized/benchmark financial statement analyses.
2, Industry Analysis: What is the overall competition status in this industry? And what is the position of your target firm in this industry?
You are expected to use Porter’s five forces to help you analyse the competition status and find the position of the target firm in the competition. Please provide the related financial or economic data to support your argument in this part. The economic or financial data you could use are not restricted to the period 2017 to 2022.
3, Company Strategy Analysis: What is the strategy of your target firm?
You are expected to describe the company’s strategy compared to the other firms in the same industry from finance perspective. Due to Covid impact, your company strategy analysis should provide financial ratio analysis based on the data from the fiscal year 2017 to 2019 to support your argument.
4, Financial Performance Analysis: What is the current financial status of this firm? Whether this company has successfully implemented the company strategy since 2020?
You should analyse the current financial status of this target firm for the period 2020 to 2022 from the following aspects: the operating profitability and the operating efficiency. You should compare the current financial status of this firm with the prior financial status and comment on whether this firm has successfully implemented the strategy that you have identified in question 3 since 2020 (the covid period). You are expected to summarize what are the key points (strengths and weaknesses) that lead to the successful or unsuccessful implementation of strategy in this firm.
5, Conclusion: What is your expectation of future financial status in this firm? Do you think the company should stick to or change the strategy in the future?

Sample solution

Dante Alighieri played a critical role in the literature world through his poem Divine Comedy that was written in the 14th century. The poem contains Inferno, Purgatorio, and Paradiso. The Inferno is a description of the nine circles of torment that are found on the earth. It depicts the realms of the people that have gone against the spiritual values and who, instead, have chosen bestial appetite, violence, or fraud and malice. The nine circles of hell are limbo, lust, gluttony, greed and wrath. Others are heresy, violence, fraud, and treachery. The purpose of this paper is to examine the Dante’s Inferno in the perspective of its portrayal of God’s image and the justification of hell. 

In this epic poem, God is portrayed as a super being guilty of multiple weaknesses including being egotistic, unjust, and hypocritical. Dante, in this poem, depicts God as being more human than divine by challenging God’s omnipotence. Additionally, the manner in which Dante describes Hell is in full contradiction to the morals of God as written in the Bible. When god arranges Hell to flatter Himself, He commits egotism, a sin that is common among human beings (Cheney, 2016). The weakness is depicted in Limbo and on the Gate of Hell where, for instance, God sends those who do not worship Him to Hell. This implies that failure to worship Him is a sin.


This question has been answered

God is also depicted as lacking justice in His actions thus removing the godly image. The injustice is portrayed by the manner in which the sodomites and opportunists are treated. The opportunists are subjected to banner chasing in their lives after death followed by being stung by insects and maggots. They are known to having done neither good nor bad during their lifetimes and, therefore, justice could have demanded that they be granted a neutral punishment having lived a neutral life. The sodomites are also punished unfairly by God when Brunetto Lattini is condemned to hell despite being a good leader (Babor, T. F., McGovern, T., & Robaina, K. (2017). While he commited sodomy, God chooses to ignore all the other good deeds that Brunetto did.

Finally, God is also portrayed as being hypocritical in His actions, a sin that further diminishes His godliness and makes Him more human. A case in point is when God condemns the sin of egotism and goes ahead to commit it repeatedly. Proverbs 29:23 states that “arrogance will bring your downfall, but if you are humble, you will be respected.” When Slattery condemns Dante’s human state as being weak, doubtful, and limited, he is proving God’s hypocrisy because He is also human (Verdicchio, 2015). The actions of God in Hell as portrayed by Dante are inconsistent with the Biblical literature. Both Dante and God are prone to making mistakes, something common among human beings thus making God more human.

To wrap it up, Dante portrays God is more human since He commits the same sins that humans commit: egotism, hypocrisy, and injustice. Hell is justified as being a destination for victims of the mistakes committed by God. The Hell is presented as being a totally different place as compared to what is written about it in the Bible. As a result, reading through the text gives an image of God who is prone to the very mistakes common to humans thus ripping Him off His lofty status of divine and, instead, making Him a mere human. Whether or not Dante did it intentionally is subject to debate but one thing is clear in the poem: the misconstrued notion of God is revealed to future generations.

 

References

Babor, T. F., McGovern, T., & Robaina, K. (2017). Dante’s inferno: Seven deadly sins in scientific publishing and how to avoid them. Addiction Science: A Guide for the Perplexed, 267.

Cheney, L. D. G. (2016). Illustrations for Dante’s Inferno: A Comparative Study of Sandro Botticelli, Giovanni Stradano, and Federico Zuccaro. Cultural and Religious Studies, 4(8), 487.

Verdicchio, M. (2015). Irony and Desire in Dante’s” Inferno” 27. Italica, 285-297.

This question has been answered.

Get Answer