Developing financial analysis
This project will require you to show your ability to create and understand the following financial analyses:
Comparative Horizontal
Common-Size Vertical
Averages
Trend
The data required for the assignment is here: Link to DatDownload Link to Data
The data is Lyft Inc.’s financial statements and key company metrics that were made public prior to their IPO. It is organized across four different worksheets that include four different sets of financial data: a P&Ls for 2017 and 2018, Balance Sheets for 2017 and 2018, Statement of Cash Flows for 2017 and 2018, and three different company specific metrics.
Assignment Instructions
Start by conducting the following analyses in the excel workbook. You will turn this in!
Comparative horizontal analyses of the P&L, Balance Sheet, and Cash Flows from 2017 to 2018 including both absolute and relative changes for each line item. For all of these analyses, you can include them on the same worksheet that the data is located. Be sure to label and give titles to be clear what you are presenting. Be sure all numbers are formatted correctly!
Common-size vertical analysis of the P&L, Balance Sheet, and Cash Flows for both 2017 and 2018. Use Net Revenue for the P&L common-size, Total Assets for the Balance Sheet common-size, and Beginning of Year Total Cash for the Cash Flows. For all of these analyses, you can include them on the same worksheet that the data is located. Be sure to label and give titles to be clear what you are presenting. Be sure all numbers are formatted correctly!
In the fourth worksheet “Company Specific Metrics”, calculate the average number of rides per active rider for each of the three month periods. In addition, conduct trend analyses (both absolute and relative) for all four of these metrics (the three originally provided and the fourth you just created). For all of these analyses, you can include them on the same worksheet that the data is located. Be sure to label and give titles to be clear what you are presenting. Be sure all numbers are formatted correctly!
In a separate word document, answer the following questions:
For the P&L:
What absolute or relative changes stand out in the horizontal analysis?
What are some important ideas from the vertical analysis?
Based on both the horizontal and vertical analyses, how has the company done in terms of Gross Revenue and Gross Profit? Cite the analyses to back up your ideas.
For the Balance Sheet:
What absolute or relative changes stand out in the horizontal analysis?
What are some important ideas from the vertical analysis?
Based on both the horizontal and vertical analyses, make sense of the total assets, total liabilities, and total equity of the company. How exactly has the company been increasing its assets with the accumulated losses (deficits)? Cite the analyses to back up your ideas.
For the Cash Flows:
What absolute or relative changes stand out in the horizontal analysis?
What are some important ideas from the vertical analysis?
Evaluate the beginning and end of year cash for both years. Are these changes good or bad? Point to other line items and cite the analyses to back up your ideas.
For the Company Specific Metrics:
Explain what the metric you created means, how might the company use it?
For all four metrics, explain if the trend of the metric is good or bad.