This Portfolio Project has two parts: calculations and a 4- to 6-page essay. While the calculation requirements of this assignment are important, equally important are your discussion and analysis of the quantitative results. You will submit two documents: 1) a spreadsheet containing your horizontal and vertical analysis (and perhaps your ratios) and 2) a word document containing your essay. Choose a publicly traded company and perform an expanded analysis on the financial statements. Please use the most current 10K statements available on www.sec.gov http://www.sec.gov or annual statements in finance.yahoo.com http://finance.yahoo.com. You will submit both parts separately. Part 1: Please complete the following for your chosen firm in an Excel spreadsheet: Horizontal and vertical analysis of the Income Statements for the past three years (all yearly balances set as a percentage of total revenues for that year). Horizontal and vertical analysis of the Balance Sheets for the past three years (all yearly balances set as a percentage of total assets for that year). Ratio analysis (eight ratios of your choosing) for the past three years PLUS a measurement for the creditworthiness of your firm as measured by Altman’s Z-score. Note that if you used your chosen firm for our ratio-related discussion posts, then you MUST also present industry-average ratios or current year competitor ratios for your ratio analysis. Comparing your firm’s ratios to a close competitor or an industry-average ratio makes your analysis much more meaningful. Part 2: The Paper: 4-6 pages in length. Include a proper introduction and conclusion. Include a reference page. Your paper should provide your reader with an overall understanding of the financial health of your chosen firm including the following: Discussion of the ratio analysis results, including rationale for the ratios chosen. Discussion of all horizontal and vertical analysis from above. Discussion of four items from the management discussion of the firm that support the conclusion formed in your discussion of the financial results. Much of this course has concentrated on learning the financial statements, primarily because there was not an accounting prerequisite. Because of this concentration, you may find this assignment challenging. However, if you understand the financial statements, then the horizontal and vertical analysis should (hopefully) be rather intuitive. For example, if you see sales rise by 20%, then shouldn’t you also see net income rise by 20% or more if the managers are effective at controlling costs? If you see sales rise by 20% and assets rise by 40%, we have to ask why this is happening. It would appear that assets have risen too far given the sales that are generated from those assets—why did this occur? You may have to research that type of question and discuss it in your analysis.