Business valuation report format in excel

Amazon Financial Analysis And Valuation Report

Below is the assignment. The company is Amazon. I am also attaching the Ruberic and the already completed Documents that address parts I-IV below. This just need to be included in the final project with part V at the end.

For this project, you will produce a financial statement analysis and valuation report that summarizes the financial health, projected future performance, and estimated value of the publicly traded (S&P 500) company that you selected at the beginning of the course. As an independent financial accounting analyst working for a major trade journal, your report is intended to inform a general audience about the overall financial well-being of the company and how it compares to a major competitor. Your report should cover information of interest to both internal and external stakeholders—summarizing major findings, suggesting ways to improve operational performance, and assessing investment potential. Keep in mind that brief, clear communications are essential in effectively reaching business and media audiences.

Specifically, you must address the critical elements listed below. Most of the critical elements align with a particular course outcome (shown in brackets).

I. Company Background. Provide your audience with relevant context on the selected company, including the purpose of the valuation. Your goal is to set the stage for the analysis to follow. The elements listed below must be included. [ACC-345-02] A. Purpose for valuation B. Date of valuation C. Percent ownership being valued D. Company history and business structure

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E. Description of facilities, major assets, or equipment key to running the business F. Overview of Management Structure

II. Balance Sheet Analysis. In this section, use financial statements and accompanying notes to: A. Analyze what the company’s current and prior year liquidity and debt-to-equity ratios say about the company’s financial health, justifying your response. Consider the appropriate level of debt and how this year’s performance compares to the previous year’s. [ACC-345-01] B. Consider normalization adjustments when adjusting the balance sheet to be comparable to competitors’, when creating the prospective balance sheet, and when calculating the final company valuation as either a premium or discount. (Include your analysis spreadsheet in Excel as an appendix.) [ACC-345-02] C. Analyze the company’s balance sheet for the current and previous year using a horizontal analysis. (Include your horizontal analysis spreadsheet in Excel as an appendix.) Explain your findings. [ACC-345-01]

III. Income Statement and Cash Flow Analysis. In this section, use financial statements and accompanying notes to: A. Analyze the profitability of your selected company using appropriate profitability ratio(s) and a vertical analysis of the company’s current and prior year income statement. (Include your vertical analysis spreadsheet in Excel as an appendix.) Be sure to explain your findings. [ACC-345-01] B. Normalization adjustments. Analyze historical income statements to determine whether there were any non-recurring or extraordinary items that should be removed from the income statement. An example would be aggressive expense recognition or conservative revenue recognition, which could either depress or inflate earnings. Adjusting these items will make the target company more comparable to the others. [ACC-34502] C. Free cash flow. Analyze what your selected company’s free cash flow figures for the current and prior year say about the company’s financial health. Consider other sources or uses of available discretionary cash. [ACC-345-01] D. Dividend paying capacity of the company. Determine if the company is on track to pay out dividends this year and whether the dividend payout ratio increases or decreases. [ACC-345-01]

IV. Industry and Economic Analysis. This section will focus on evaluating the selected company’s industry, its market structure, competitors, supply and demand, regulations, outlook or forecast, and other relevant factors specific to that industry. The section should also cover macro and microeconomic trends. This considers current monetary policy, GDP growth, the current economic health of the country of origin, and/or the company's global presence, all of which are relevant for valuing a company. A. General economic overview. This will explore trends in economic indicators. It will also cover output of goods and services produced by the domestic and global economy. i. Economic output and consumption. Identify national trends that could impact your chosen company or its industry as a whole based on macroeconomic qualitative data. [ACC-345-03] ii. Current monetary and trade Policy. Evaluate upcoming changes to policies or regulations that would impact your selected company or its industry. [ACC-345-03] iii. Explain relationships these policies and regulations would have with the company’s sales or expenses. [ACC-345-03]

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B. Industry analysis. This piece involves researching the industry in which the target company operates to understand its strengths, weaknesses, opportunities, and threats. It will explore the following issues: i. Supply and demand. Ascertain key supply and demand issues relevant to your company's industry, pinpointing critical issues that could benefit or harm your chosen company's operations. [ACC-345-03] ii. Market share and competitive landscape. Approximate your company's market share within its own industry, and distinguish its strengths and weaknesses from those of its major competitors. [ACC-345-03] iii. Regulation. Evaluate new regulation that is specific to your chosen company's industry, and determine whether it benefits or harms your company. [ACC-345-03] iv. Employment issues. Explain how the labor markets and the constraints that exist impact your company’s operations. [ACC-345-03] v. Industry outlook. Determine how industry trends and relevant emerging technologies impact your chosen company's industry in the future. [ACC-345-03]

V. Final Valuation Calculation. Estimate your selected company’s value by using one or a combination of the following approaches. Then apply applicable discounts to arrive at a final indication of value. Specifically, you should: A. Evaluate each of the three valuation methods (asset approach, market approach, and income approach) for the selected company to determine which can be performed. Provide evidence as to why you would or would not use one or a combination of approaches. [ACC-345-02] B. Calculate the income approach to arrive at a single indication of value. [ACC-345-02] C. Apply the appropriate discounts and/or premiums to arrive at the final indication of value. [ACC-345-02]

Overview Accounting professionals are often asked to provide financial statement analysis for a variety of reasons and audiences. Internally, such evaluations of a company’s health and value may be used to inform decisions regarding redeployment of assets or improved operational performance. Externally, they may be used in making credit or investment decisions. In this project, you will put course concepts into practice by preparing a financial analysis and valuation report on a company you selected from an abbreviated list of the S&P 500 and compare it to a chief competitor. In the report, you will evaluate the financial health of the company, its future prospects, and its current value based on the public financial statements required by the Securities and Exchange Commission. You will also identify opportunities for enhancing operational performance and discuss whether you would recommend investing in the company based on your analysis of the statements. In this assignment, you will demonstrate your mastery of the following course outcomes:

 ACC-345-01: Analyze financial statements to determine the financial health of a company

 ACC-345-02: Perform a valuation calculation of a company to address the needs of various audiences and purposes

 ACC-345-03: Perform an economic and industry analysis to project a company’s future performance

Prompt For this project, you will produce a financial statement analysis and valuation report that summarizes the financial health, projected future performance, and estimated value of the publicly traded (S&P 500) company that you selected at the beginning of the course. As an independent financial accounting analyst working for a major trade journal, your report is intended to inform a general audience about the overall financial well-being of the company and how it compares to a major competitor. Your report should cover information of interest to both internal and external stakeholders—summarizing major findings, suggesting ways to improve operational performance, and assessing investment potential. Keep in mind that brief, clear communications are essential in effectively reaching business and media audiences. Specifically, you must address the critical elements listed below. Most of the critical elements align with a particular course outcome (shown in brackets).

I. Company Background. Provide your audience with relevant context on the selected company, including the purpose of the valuation. Your goal is to set the stage for the analysis to follow. The elements listed below must be included. [ACC-345-02]

A. Purpose for valuation B. Date of valuation C. Percent ownership being valued D. Company history and business structure

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E. Description of facilities, major assets, or equipment key to running the business F. Overview of Management Structure

II. Balance Sheet Analysis. In this section, use financial statements and accompanying notes to:

A. Analyze what the company’s current and prior year liquidity and debt-to-equity ratios say about the company’s financial health, justifying your response. Consider the appropriate level of debt and how this year’s performance compares to the previous year’s. [ACC-345-01]

B. Consider normalization adjustments when adjusting the balance sheet to be comparable to competitors’, when creating the prospective balance sheet, and when calculating the final company valuation as either a premium or discount. (Include your analysis spreadsheet in Excel as an appendix.) [ACC-345-02]

C. Analyze the company’s balance sheet for the current and previous year using a horizontal analysis. (Include your horizontal analysis spreadsheet in Excel as an appendix.) Explain your findings. [ACC-345-01]

III. Income Statement and Cash Flow Analysis. In this section, use financial statements and accompanying notes to: A. Analyze the profitability of your selected company using appropriate profitability ratio(s) and a vertical analysis of the company’s current and

prior year income statement. (Include your vertical analysis spreadsheet in Excel as an appendix.) Be sure to explain your findings. [ACC-345-01] B. Normalization adjustments. Analyze historical income statements to determine whether there were any non-recurring or extraordinary items

that should be removed from the income statement. An example would be aggressive expense recognition or conservative revenue recognition, which could either depress or inflate earnings. Adjusting these items will make the target company more comparable to the others. [ACC-345- 02]

C. Free cash flow. Analyze what your selected company’s free cash flow figures for the current and prior year say about the company’s financial health. Consider other sources or uses of available discretionary cash. [ACC-345-01]

D. Dividend paying capacity of the company. Determine if the company is on track to pay out dividends this year and whether the dividend payout ratio increases or decreases. [ACC-345-01]

IV. Industry and Economic Analysis. This section will focus on evaluating the selected company’s industry, its market structure, competitors, supply and demand, regulations, outlook or forecast, and other relevant factors specific to that industry. The section should also cover macro and microeconomic trends. This considers current monetary policy, GDP growth, the current economic health of the country of origin, and/or the company's global presence, all of which are relevant for valuing a company.

A. General economic overview. This will explore trends in economic indicators. It will also cover output of goods and services produced by the domestic and global economy.

i. Economic output and consumption. Identify national trends that could impact your chosen company or its industry as a whole based on macroeconomic qualitative data. [ACC-345-03]

ii. Current monetary and trade Policy. Evaluate upcoming changes to policies or regulations that would impact your selected company or its industry. [ACC-345-03]

iii. Explain relationships these policies and regulations would have with the company’s sales or expenses. [ACC-345-03]

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B. Industry analysis. This piece involves researching the industry in which the target company operates to understand its strengths, weaknesses, opportunities, and threats. It will explore the following issues:

i. Supply and demand. Ascertain key supply and demand issues relevant to your company's industry, pinpointing critical issues that could benefit or harm your chosen company's operations. [ACC-345-03]

ii. Market share and competitive landscape. Approximate your company's market share within its own industry, and distinguish its strengths and weaknesses from those of its major competitors. [ACC-345-03]

iii. Regulation. Evaluate new regulation that is specific to your chosen company's industry, and determine whether it benefits or harms your company. [ACC-345-03]

iv. Employment issues. Explain how the labor markets and the constraints that exist impact your company’s operations. [ACC-345-03] v. Industry outlook. Determine how industry trends and relevant emerging technologies impact your chosen company's industry in the

future. [ACC-345-03]

V. Final Valuation Calculation. Estimate your selected company’s value by using one or a combination of the following approaches. Then apply applicable discounts to arrive at a final indication of value. Specifically, you should:

A. Evaluate each of the three valuation methods (asset approach, market approach, and income approach) for the selected company to determine which can be performed. Provide evidence as to why you would or would not use one or a combination of approaches. [ACC-345-02]

B. Calculate the income approach to arrive at a single indication of value. [ACC-345-02] C. Apply the appropriate discounts and/or premiums to arrive at the final indication of value. [ACC-345-02]

Milestones Milestone One: Company Background In Module One, you will select a company from the list, and submit a brief overview of the company background. This milestone will address specific critical elements from Section I. This milestone will be graded with the Milestone One Rubric. Milestone Two: Financial Statement Analysis and Valuation Report In Module Three, you will produce a financial statement that summarizes the financial health, projected future performance, and estimated value of the company you selected in Milestone One. This milestone will help you complete Sections II and III of the Final Project and will be graded with the Milestone Two Rubric. Milestone Three: Industry and Economic Analysis In Module Five, you will submit a report that addresses SWOT, the industry and economic analysis, as well as any emerging technological trends that might impact your selected company. This milestone will help you complete Section IV of the final project and will be graded using the Milestone Three Rubric. Final Submission: Financial Analysis and Valuation Report

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In Module Seven, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final product. It should reflect the incorporation of feedback gained throughout the course. This submission will be graded with the Final Project Rubric.

Deliverables Milestone Deliverable Module Due Grading

One Company Background One Graded separately; Milestone One Rubric

Two Financial Statement Analysis and Valuation Report Three Graded separately; Milestone Two Rubric

Three Industry and Economic Analysis Five Graded separately; Milestone Three Rubric

Final Submission: Financial Analysis and Valuation Report Seven Graded separately; Final Project Rubric

Final Project Rubric Guidelines for Submission: The final report should be the completed Business Valuation Report template – all sections. Sources should be cited according to APA Style. For the analysis, use and submit the Business Valuation Model Excel file. Include a link to the chosen company’s financial information for confirmation purposes.

Critical Elements Exemplary (100%) Proficient (85%) Needs Improvement (55%) Not Evident (0%) Value

Company Background

[ACC-345-02]

Meets “Proficient” criteria and language expertly balances brevity and clarity for reaching a business and media audience

Provides relevant information regarding the background of the selected company, including links to the financial statements that set the stage for analysis to follow

Provides context on the selected company, including links to the financial statements, but information is not relevant for setting the stage for analysis or is inaccurate

Does not provide context on the selected company, including links to the financial statements

5.28

Balance Sheet Analysis: Liquidity and Debt-to-Equity

Ratios [ACC-345-01]

Meets “Proficient” criteria and analysis considers interrelationships between liquidity, debt, and the cost of capital

Analyzes what current and prior year liquidity and debt-to-equity ratios say about the company’s financial health, justifying response

Analyzes what ratios say about the company’s financial health, but does not justify response

Does not analyze what the ratios say about the company’s financial health

6.34

Balance Sheet: Normalization Adjustments [ACC-345-02]

Meets “Proficient” criteria and response includes nuanced analysis of multiple aspects of the balance sheet

Analyzes the company’s balance sheet using horizontal analysis and includes analysis spreadsheet in appendix, explaining findings

Analyzes the balance sheet using horizontal analysis but does not explain findings, or does not include analysis spreadsheet in appendix

Does not analyze the company’s balance sheet using horizontal analysis nor include analysis spreadsheet in appendix

5.28

5

Critical Elements Exemplary (100%) Proficient (85%) Needs Improvement (55%) Not Evident (0%) Value

Balance Sheet Analysis:

Horizontal Analysis [ACC-345-01]

Meets “Proficient” criteria and response includes multiple, well- justified opportunities for the company to improve

Analyzes the company’s balance sheet indicators for opportunities for selected company to improve its own performance, justifying response using company and competitor financial statements

Analyzes company’s balance sheet indicators for opportunities for selected company to improve, but does not justify response

Does not analyze company’s balance sheet indicators for opportunities for selected company to improve

6.34

Income Statement and Cash Flow

Analysis: Profitability

[ACC-345-01]

Meets “Proficient” criteria and response demonstrates a sophisticated understanding of the relationships between different items on an income statement

Analyzes profitability of company using appropriate profitability ratio(s) and vertical analysis of company’s current and prior year income statements and includes vertical analysis spreadsheet in appendix, explaining findings

Analyzes profitability using appropriate profitability ratio(s) and vertical analysis but does not explain findings, or does not include spreadsheet in appendix

Does not analyze profitability using appropriate profitability ratio(s) and vertical analysis nor include vertical analysis spreadsheet in appendix

6.34

Income Statement and Cash Flow

Analysis: Normalization Adjustments [ACC-345-02]

Meets “Proficient” criteria and response includes a nuanced discussion of how cash influences business viability

Analyzes historical income statements and determines any non-recurring or extraordinary items that should have been removed from the income statement

Analyzes historical income statements, but response is illogical or contains inaccuracies

Does not analyze historical income statements

5.28

Income Statement and Cash Flow

Analysis: Free Cash Flow

[ACC-345-01]

Meets “Proficient” criteria and response includes multiple, well- justified opportunities for the company to improve

Analyzes the selected company’s free cash flow figures for the current and prior year and determines how they inform the company’s financial health

Analyzes the selected company’s free cash flow figures for the prior and current year but does not determine how they inform the financial health of the selected company

Does not analyze the selected company’s free cash flow figures for the current and prior year

6.34

Income Statement and Cash Flow

Analysis: Dividend Paying Capacity

[ACC-345-01]

Meets “Proficient” criteria and demonstrates a complex grasp of dividends and dividend payout ratios

Determines if the company is on track to pay out dividends this year and whether the dividend payout ratio will increase or decrease

Determines if the company is on track to pay out dividends this year but does not address whether the payout ratio will increase or decrease

Does not determine if the company is on track to pay out dividends this year

6.34

Industry and Economic Analysis: General Economic Overview: Output and Consumption

[ACC-345-03]

Meets “Proficient” criteria and explanation is exceptionally clear and contextualized

Identifies national trends that could impact the chosen company or its industry as a whole based on macroeconomic qualitative data

Identifies national trends that could impact the selected company but does not base findings on macroeconomic qualitative data

Does not identify national trends that could impact the chosen company or its industry

3.96

6

Critical Elements Exemplary (100%) Proficient (85%) Needs Improvement (55%) Not Evident (0%) Value

Industry and Economic Analysis: General Economic

Overview: Monetary and Trade Policy [ACC-345-03]

Meets “Proficient” criteria and response demonstrates an insightful awareness of policies and regulations

Evaluates upcoming changes to policies or regulations that would impact the selected company or its industry

Evaluates upcoming changes to policies or regulations, but response contains errors or is inaccurate

Does not evaluate upcoming changes to policies or regulations

3.96

Industry and Economic Analysis: General Overview:

Policies and Regulations

[ACC-345-03]

Meets “Proficient” criteria and response is particularly clear and nuanced

Explains the relationships the policies and regulations would have with the company’s sales or expenses

Explains the relationships the policies and regulations would have with the company’s sales or expenses, but explanation is cursory, contains errors, or is inaccurate

Does not explain the relationships the policies and regulations would have with the company’s sales or expenses

3.96

Industry and Economic Analysis: Industry Analysis:

Supply and Demand

[ACC-345-03]

Meets “Proficient” criteria and cites specific and relevant examples to establish a robust context for the analysis

Ascertains key supply and demand issues relevant to the selected company’s industry and pinpoints critical issues that could benefit or harm the company

Ascertains key supply and demand issues relevant to the selected company’s industry but does not pinpoint critical issues that could benefit or harm the company

Does not ascertain key supply and demand issues nor pinpoint critical issues that could benefit or harm the company

3.96

Industry and Economic Analysis: Industry Analysis: Market Share and

Competitive Landscape

[ACC-345-03]

Meets “Proficient” criteria and explanation is sufficiently detailed and clear to give the reader a high level of confidence in the market share analysis

Approximates the selected company’s market share within its own industry and distinguishes its strengths and weaknesses from its major competitors

Approximates the selected company’s market share within its own industry but does not distinguish its strengths and weaknesses from its major competitors

Does not approximate the selected company’s market share within its own industry nor distinguish its strengths and weaknesses from its major competitors

3.96

Industry and Economic Analysis: Industry Analysis:

Regulation [ACC-345-03]

Meets “Proficient” criteria and response demonstrates an insightful awareness of regulation and how it impacts the chosen company

Evaluates new regulation that is specific to the chosen company’s industry and determines whether it benefits or harms the company

Evaluates new regulation that is specific to the chosen company's industry in the future but does not determine whether it benefits or harms the company

Does not evaluate new regulation that is specific to the chosen company’s industry nor determine whether it benefits or harms the company

3.96

Industry and Economic Analysis: Industry Analysis:

Employment Issues

[ACC-345-03]

Meets “Proficient” criteria and expertly balances brevity with detail while making a meaningful and informed explanation

Explains how the labor markets and the constraints that exist impact the selected company's operations

Explains how the labor markets and the constraints that exist impact the selected company’s operations, but response contains errors or is illogical

Does not explain how the labor markets and constraints that exist impact the selected company’s operations

3.96

7

Critical Elements Exemplary (100%) Proficient (85%) Needs Improvement (55%) Not Evident (0%) Value

Industry and Economic Analysis: Industry Analysis: Industry Outlook

[ACC-345-03]

Meets “Proficient” criteria and demonstrates a sophisticated understanding of emerging technology and/or industry trends

Determines how industry trends and relevant emerging technologies will impact the chosen company’s industry in the future

Determines how industry trends and relevant emerging technologies will impact the chosen company's industry, but response contains errors or is illogical

Does not determine how industry trends and relevant emerging technologies will impact the chosen company’s industry in the future

3.96

Final Valuation Calculation:

Valuation Methods [ACC-345-02]

Meets “Proficient” criteria and illustrates a sophisticated understanding of valuation methods

Evaluates each of the three valuation methods for the selected company, determines which can be performed, and provides evidence as to why one would or would not use one or a combination of approaches

Evaluates each of the three methods, but does not determine which can be performed or does not provide evidence as to why one would or would not use one or a combination of approaches

Does not evaluate the valuation methods nor determine which can be performed

5.28

Final Valuation Calculation:

Calculate the Income Approach

[ACC-345-02]

Meets “Proficient” criteria and demonstrates a complex understanding of valuation approaches, as well as applying weights to multiple methods

Calculates each method possible and selects the appropriate approach, or applies weights to multiple methods to arrive at a single indication of value

Calculates each method possible and selects an approach or combination of approaches, but response is not calculated correctly, or approach selected is inappropriate

Does not calculate each method possible nor select an approach

5.28

Final Valuation Calculation:

Discounts and Premiums

[ACC-345-02]

Meets “Proficient” criteria and uses industry-specific language to establish expertise

Applies the appropriate discounts and/or premiums to arrive at the final indication of value

Applies discounts and/or premiums, but they are inappropriate for the selected company

Does not apply discounts and/or premiums

5.28

Articulation of Response

Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy to read format

Submission has no major errors related to citations, grammar, spelling, syntax, or organization

Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas

Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas

4.94

Total 100%