Fanshawe College – FINA 3042 – FALL 2019
FINA 3042 Assignment 1
For this assignment, you will be completing a financial analysis, and preparing a report on the company
Brick Brewing Company Limited. Assignment 1 is to be done in groups of 2 or 3.
Peer evaluations must be completed to receive marks (done as a survey on FOL). Grades can be adjusted
based on peer evaluations.
An Excel template is provided to complete the financial analysis. Please see FOL for the template. Be
sure to use cell references, do not type in numbers.
Rename the Excel workbook your group number and last names e.g. (1OttenSmith).
The total assignment is worth 20% of your grade, with 10% allocated to the final submission, and 10%
allocated to two checkpoints.
Make sure to review the instructions, and due dates for the checkpoints. Checkpoints are grades as
complete/incomplete, and the intent is to provide you with feedback on your progress.
CALCULATION INSTRUCTIONS (40 marks)
1. Find the annual report AND the annual audited financial statements for Brick Brewing Company
Limited for the year ended January 31, 2018. You can use SEDAR (www.sedar.com) to find this
information, or it may be posted on the company’s website under investor relations. Review the
information, and fill in the balance sheet, and income statement information in the excel template
(sheet 1 & 2). Make sure to include the previous year’s data. (2 marks)
2. Using the financial statements obtained in 1, prepare the cash flow identity. Show all work and
calculations used. Remember to use cell references so that it is evident where the numbers are taken
from. You can use the statement of cash flows in the annual report to help determine all of the noncash items. You will find this more difficult than the examples and problems provided in the textbook
as this is a real company. You may have to do some investigating to obtain all information. (10 marks)
3. Calculate the year over year change for both the balance sheet and income statement and the
percentage difference (horizontal analysis) in the columns provided. Format the figures (no decimal
places for percentages) and make sure to change your excel spreadsheet options so that it does not
show zeros. Also, perform a common size (vertical) analysis of the balance sheet and income
statement for both years, with no decimal places. (8 marks)
4. Perform a ratio analysis on the balance sheet and income statement for both years using the ratios
contained in the template. Show your work, and the elements for the denominator and numerator.
Format to two decimal places. (12 marks)
Fanshawe College – FINA 3042 – FALL 2019
5. Complete a ratio comparison to the industry figures for the red ratios in the template. Use this website
to find the NAICS code for the company, and then find the industry data at the Industry Canada
website. Make sure you use a 5 digit code, as there is no data for the higher range when using a 6 digit
code. Use the rates for the larger enterprises (top quartile). Enter the industry ratios into the
spreadsheet template. (4 marks)
6. Do some research and find out what the company’s ticker symbol is, and what exchange their stock
is trading on. Find the stock price, and enter it, and date you obtained the price, on the ratio
spreadsheet in the excel workbook. Calculate the price to earnings ratio using the latest earnings from
the income statement. (4 marks)
REPORT INSTRUCTIONS (40 marks)
Create a report in Microsoft word that answers the following questions. You may want to do the report
in Google Docs as it is a great collaboration tool. If you want me to help get you set up on Google Docs,
let me know.
1. What is the difference between the annual report, and the annual audited financial statements
report? (2 marks)
2. The financial performance of Brick Brewing Company Limited has turned very positive in the last
few years. Provide 2 major reasons why the financial performance has turned around and
explain how the reason contributed to the turnaround. Also identify why net income is lower in
fiscal 2018 and comment on whether that trend is expected to continue. (6 marks)
3. What does the cash flow identity for the company tell us? How is the cash flow identity that you
created different from the cash flow statement provided in the financial statements? What do
you notice about the cash flows for the 2018 fiscal year? (7 marks)
4. Provide an assessment of the company’s financials based on the vertical and horizontal analysis
of both the balance sheet and income statement. Are there any major differences year over
year? If so, describe the changes and explain some possible reasons for the difference. Are there
any differences between the horizontal and vertical assessment? For the analysis you may want
to access the annual report, or financial statement notes for more information. (10 marks)
5. Provide a discussion on the ratio analysis based on the four main categories of ratios: liquidity,
leverage, turnover and profitability. Be sure to discuss the changes year over year, and the
comparison to the industry. (10 marks)
6. How do potential investors use the price to earnings ratio? What does the P/E ratio for the
company tell us? (5 marks)
Fanshawe College – FINA 3042 – FALL 2019
PROJECT MILESTONES
| Checkpoint 1 (due Sep 23rd by midnight) | Sign up for groups via FOL. Complete calculation instructions 1&2: Find the company’s financial Statements and input them in the template provided and complete the cash flow identity. |
| Checkpoint 2 (due Sep 30th by midnight) | Complete calculation instruction 3,4,5,6 Financial Analysis |
| FINAL SUBMISSION OCT 7TH by midnight) |
| The final group submission must include both a written report, and the completed excel spreadsheet (with calculation instructions 1-6) to the dropbox: Assignment 1. Do not forget to complete the peer evaluation (under course surveys). Please be sure to use proper grammar, and business memo formats. You may write your analysis in point form. It should be succinct, and informative. Please post all questions to the discussion board. |