Firm name Saudi
Aramco
aramco company
Page 1 of 12
Table of Contents
Page 2 of 12
Introduction about the Chosen Firm:
1.
2.
3.
4.
5.
6.
Name of the firm
Stock market
Market capitalization (latest)
Products / services of the firm
Other information (face of the firm / CEO)
Any other information _____
Page 3 of 12
Task 1:
Financial Analysis
Process of Financial Analysis
Page 4 of 12
Task 2
Qualitative Data
Quantitative Data
Page 5 of 12
Task 3
Financial Ratios of the chosen firm
1.
2.
3.
4.
5.
Liquidity ratios
Profitability ratios
Gearing ratios
Efficiency ratios
Solvency ratios
Financial Heath
Page 6 of 12
Task 4
DuPont Analysis
Practical Aspects of Z Score
Page 7 of 12
Task 5
Calculation of DuPont
Calculation of Z Score
Interpretation
Page 8 of 12
Task 6
Summary of Financial Forecasts
Red Flags
Suggestions / Recommendations
Page 9 of 12
Conclusion
Page 10 of 12
References
Page 11 of 12
Appendix
Page 12 of 12
Scenario: Aramco international stock market. Download 3 years latest
financial statements (including balance sheet and income statement).
Requirement:
Task 1: Give a brief introduction about financial analysis. Elaborate the process
undertaken in a financial analysis done for a listed firm (LO 2.1 and 2.2)
Task 2: Give a summary of the qualitative and quantitative data applicable for
your chosen organization (LO 2.3)
Task 3: Calculate key financial ratios of the chosen firm and critically analyse
the financial health of the business entity. (LO 2.4) 4
Task 4: What do you understand by a DuPont analysis? Synthesize practical
aspects of a z score. (LO 6.1 and 6.2)
Task 5: Use DuPont analysis and Z-score for the chosen firm and summarize the
interpretation. (LO 6.3 and 6.4)
Task 6: Based on your entire analysis of the chosen firm, summarize financial
forecasts and give appropriate suggestions. (LO 6.5)
Focus in Task 3,5,6
AltmanàZ score
Altman Z Score = 1.2A +1.4B + 3.3C + 0.6D + 1.0E
Ratios
Company A Ltd.
Company B Ltd.
A=
4600-3350/16800=0.074
Working
capital/T
otal
assets
1950-500/7750=0.187
B=
450/16800=0.0268
Retained
earnings/
Total
assets
1000/7750=0.129
C=
1700/16800=0.1012
EBIT/Tot
al assets
1800/7750=0.2323
D=
9000/16800=0.5357
Market
value of
equity/T
otal
liabilities
5500/7750=0.7097
E = Total 15000/16800=0.8929
sales/Tot
al assets
10000/7750=1.2903
Z Score 1.2(0.074)+1.4(0.0268)+3.3(0.1012)+0.6(0.5 1.2(0.187)+1.4(0.129)+3.3(0.2323)+0.6(0.70
357)+1(0.8929)= 2.012
97)+1(1.2903)= 2.8866
Decision Good Chances
Alert
Analysis/Interpretation: Company B Ltd. is in a better position than company A Ltd.
Notes*:
1.
2.
Instead of retained earnings general reserve is considered.
Instead of market value of equity, book value is considered
Adjusted Z score:
Revised or Adjusted Z Score = 3.25 + 6.56X1 + 3.26X2 + 6.72X3 + 1.05X4
Ratios
Company A Ltd.
Company B Ltd.
3.25+6.56 (0.074)+3.26
(0.268)+6.72 (0.101)+1.05
(0.536)
3.25+6.56(0.187)+3.26(0.129)+6.72(0.232)+1.05(0.710)
=3.25+1.23+0.42+1.56+0.75
= 3.25+0.49+0.87+0.68+0.56
Z Score = 5.85
= 7.21
Decision Safe
Safe
Conclusion: DuPont analysis indicates that Company BàROE is higher compared to Company AàROE.
This reflects that the owners (shareholders) will get higher returns if they invest in company B.
Z Score: In terms of Z score, Company A is risky compared Company B. High z score indicates lower risk,
and low z score indicates high risk. Therefore, Company A is more – risky compared to company B.
Overall conclusion, is that invest in Company B

Purchase answer to see full
attachment