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Finance

Finance

Case instructions and grading scheme.

• Perform the vertical and horizontal analysis and calculate the ratios as instructed (33.1 points-33.1 of your grade). Fill the grey cells by using Excel formulas or cells referencing NOT hardcoding. You will not earn credit for hardcoding (entering the figures manually). • You are a financial analyst. Based on your analysis of Sherwin-Williams Co (SW) financial statements, provide a report to guide investors whether SW is a buy (keep) or sell stock. Your report should include the following (66.9points-61.3% of your grade):

a. An interpretation of trends illustrated by supportive ratios, horizontal and vertical analysis and focus on the main ratios that “tell the story”. (a minimum of 2 pages-not to exceed 3 pages, single space, 12 font size). i. horizontal and vertical analysis-10 pointsii. Liquidity analysis-10 pointsiii. Profitability analysis-10 pointsiv. Solvency analysis –10 pointsb. How did SW perform compared to the industry? (1 paragraph)- 7 pointsc. What additional information do you suggest could influence the investment decision? Do some research about the company. (1 paragraph) 10 pointsd. Your informed recommendation (buy or sell) about SWwith justifications. What is your general impression about SW? Support your conclusion (1-2 paragraph) 10 points

Instructions:

1. Show good understanding of what each analysis and each ratio is measuring.2. Make sure that every claim is justified by an analysis of the company’s financials.3. Ensure that the report tells a coherent story about the company.

Notes

Groups will receive zero credit for plagiarismVertical analysis: expresses the items of each statement for the period relative to a base figure. For B/S, you express each item of the B/S as a percentage of total assets whereas for I/S, each item of the I/S is expressed as a percentage of total sales.Hint for EBIT calculation: net income + income tax+ interest expenseHorizontal analysis: evaluates the trends (rate of change) over a period of time.  For example, the rate of change of each item of the B/S from 2020 to 2021 is calculated as follows: (Amount in 2021-Amount in 2020)/amount in 2020.