This assessment task requires you to analyse two publicly listed companies using your knowledge of accounting and financial analysis from this course. 1. AMGEN INC. (NASDAQ: AMGN) is a biotechnology company.

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FINM7409 Assessment 2: Financial statement analysis
Task description
This assessment task requires you to analyse two publicly listed companies using your knowledge of
accounting and financial analysis from this course.
1. AMGEN INC. (NASDAQ: AMGN) is a biotechnology company. It discovers, develops, manufactures
and delivers medicines for the toughest diseases. It focuses on areas of high unmet medical need and
leverages its expertise to strive for solutions that improve people’s lives. It operates in the human
therapeutics segment.
2. ABBVIE INC. (NYSE: ABBV) is a global, diversified research-based biopharmaceutical company. The
Company is engaged in research and development, manufacturing, commercialization and sale of
medicines and therapies.
This assessment has 2 parts:
1. Part 1: Excel spreadsheet
2. Part 2: A written essay analysing companies using financial ratios calculated in Part 1
Purpose
This assessment aims to test your fundamental knowledge and understanding of financial ratios and financial
statement analysis.
Key details
Weighting This assessment is worth 30% of your final grade
Part 1: Excel = 50 marks (15% of your final grade)
Part 2: Essay = 50 marks (15% of your final grade)
Total marks: 100 marks
Due date 8:30am, 8 October 2025
Type Individual Excel task and written essay
Learning outcomes
This assessment aligns to the following learning outcomes:
LO1. Utilise accounting information to determine the financial status of a firm.
LO2. Analyse and interpret financial statements.
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Instructions
PART 1 (Excel spreadsheet)
The Excel template, “FINM7409_Excel.xlsx”, on Blackboard “Assessment → A2: Financial statement analysis
project → Assignment documents” contains income statements and balance sheets for the above two
companies, together with a template which you are required to complete. Please use this file to complete Part
1 (Excel spreadsheet) described below.
TASKS
Question 1. Complete financial ratios (from “Ratio Analysis” tab) and common-size analyses of the two
companies (from the Income Statement and Balance Sheet worksheets for each company). [15 marks]
Question 2. Complete the “Other Inputs” worksheet in the Excel template by collecting relevant financial data
from Yahoo Finance (https://au.finance.yahoo.com/ ) to fill in missing numbers. You are not allowed to use
data from any other sources. [15 marks]
Question 3. Carry out the trend analysis of sales revenue, operating income (EBIT), and net income for each
company. [10 marks]
Question 4. Plot the trends for these three metrics on the same graph for each company, i.e., two graphs,
one for each company. [10 marks]
PART 2 (Essay)
After completing the Excel spreadsheet from Part 1 above as a base for your essay, you will then use relevant
ratios and information from your Excel to write a short essay (maximum length = 5 pages – please refer to the
“Other information” section below for further details) by answering the following questions.
TASKS
Question 5. Based on the quick ratio, which company do you think is in a better position to meet short-term
obligations and why List one issue/limitation of using current ratio to assess a company’s liquidity. [8 marks]
Question 6. Based on the debt-to-equity ratio, which company do you think will have better long-term viability
List one advantage and one disadvantage of using debt. [8 marks]
Question 7. From the interest-coverage ratio, which company do you think will be in a better position to service
its debt in the face of financial distress [8 marks]
Question 8. From the cash cycle, which company do you think has faster cash recovery and strongly liquidity
[8 marks]
Question 9. Which company do you think the market is more optimistic about, i.e., expect higher future growth
of the company [8 marks]
Question 10. Using the DuPoint analysis, discuss a core driver of ROE for each company [10 marks]
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Instructions/hints for completing the assignment
Part 1 (Excel spreadsheet)
Entries in the Excel spreadsheet must contain Excel formulas, not raw numbers. This is to make sure that
we know how you have calculated a ratio (which data item was used and from which worksheet, and so
forth).
To complete the “Ratio Analysis” worksheet, use the ratio definitions provided at the end of this document.
When calculating these ratios, please keep the following in mind:
o Some of the ratios involve the use of both flow and stock items (see refer to Slide 16 of Lecture 5),
which implies that we have missing data for calculating such ratios for the earliest year, i.e., 2020. In
this case, just use the end-of-financial-year values for 2020. For the other years, though, you must
calculate the ratios using the provided formulas.
o Definitions of financial ratios might vary a bit, but for the purpose of this assignment, please use only
the definitions as provided in this document.
To collect share price ($) to complete the “Other Inputs” worksheet, please use the following steps:
Step 1: Go to https://au.finance.yahoo.com/
Step 2: Enter the stock ticker for your company in the Search box and press Enter (or click on the
Search icon).
Step 3: Once inside the page for the company, click on the “Historical data” tab that you can find
on the left pane.
Step 4: Select data range from 31 December 2020 through 01 January 2025, then click on the
“Historical Prices”, and then on the “Daily” frequency.
Step 5: Select share price data from the column “Close”, which is the market price at year end. If
the data falls on non-trading days (i.e., Saturday and Sunday), then use share price on the last trading
day (i.e., on Friday).
To collect data on dividends paid to complete the “Other Inputs” worksheet, follow the same steps as
above, but instead of selecting “Historical Prices”, choose “Dividends only” from the drop-down menu.
Note that to find dividends for 2020, you will need to modify data range selection so that it displays all
dividends paid in 2020. Then you will see dividends paid on different dates throughout a year. To calculate
the dividend paid for a financial year, you will need to add up all dividends paid during that year. If you do
not see a dividend paid during a given year, then it means that the company did not pay dividends in that
year; in this case, dividend paid is simply zero.
To plot the trends, refer to Slide 13 of Lecture 5 for an idea of what each graph should look like.
NOTES: Yahoo Finance no longer allows users to download, select, or copy data, but this should present you
with no difficulty in collecting the data because we have only 5 years for share price data and a company
usually pays one or just several dividends per year (some companies even do not pay dividends in a certain
year).
Part 2 (Essay)
Answers to each question in the Essay part should not be only YES/NO without (brief) explanations.
Be sure to state any assumptions, if any, that you use to answer a question.
Make sure to cite any external source you use, if any.
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Other information
Task format
The essay must not exceed five (5) A4-type-written pages including, if any, the list of references,
figures, and tables. Figures and tables, if any, may be included after the list of references.
Use 1.5 line spacing, 12-point font size, “Times New Roman”, “Normal” margins, justified paragraphs
and page numbering at the bottom centre of the page.
The cover page must show your full name followed by UQ student ID.
Reference list must follow APA 7th edition style.
Task submission
The assignment will be submitted electronically using a Blackboard Assessment link and a Blackboard
Turnitin link. Submission by email will not be accepted under any circumstances and will not be
marked.
Naming your essay and Excel files:
Part A (Excel spreadsheet): Your completed Excel file that you will upload to Blackboard must be
named using the following format: FINM7409_Excel_UQ Student Number, where UQ Student
Number is your UQ student number. For example, it looks something like this:
FINM7409_Excel_12345678, assuming 12345678 is your UQ student number.
Part B (Written essay): The file containing your essay that you will upload to Blackboard can be in MS
Word or PDF format. It must be named using the following format: FINM7409_Essay_UQ Student
Number, where UQ Student Number is your UQ student number. For example, it looks something
like this: FINM7409_Essay_12345678, assuming 12345678 is your UQ student number.
Submitting your essay and Excel file:
Upload/submit your Excel file to Blackboard via the link “Assignment Part 1 (Excel component).
This file will be marked.
Before submitting your essay, you must first upload your essay to Turnitin via the link “Turnitin
submission for Assignment Part 2”. This file is for similarity check and plagiarism detection. You
will get a report showing similarity scores each time you submit your essay. You may submit as many
times as you like, but please make sure that only the last version of the file will be submitted to
Blackboard via the link “Assignment Part 2 (Essay component). This file will be marked.
Use of artificial intelligence
Artificial Intelligence (AI) and Machine Translation (MT) are emerging tools that may support students
in completing this assessment task. Students may appropriately use AI and/or MT in completing this
assessment task. Students must clearly reference any use of AI or MT in each instance.
A failure to reference generative AI or MT use may constitute student misconduct under the Student
Code of Conduct.
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Special consideration
If you can’t submit your work on time because you are sick (or have another acceptable reason), you
may request an “extension.” Extensions give you a new due date, so you can submit work late without
getting a late penalty.
If you need an extension, you must apply online before the due date.
All decisions about assignment extensions are made by the UQ Business School Examinations team.
UQ Course staff cannot grant extensions.
Do not ask the Course Coordinator or your tutor for an extension.
Grades and feedback
Late submissions will receive a 10% penalty per day (24 hours).
Your work will not be graded if it is more than 7 days late. This means that you will receive a mark of
zero if your submission is more than 7 days late.
The University policy governing penalties for late submission will strictly apply:
https://policies.uq.edu.au/document/view-current.php id=184#major8
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Financial ratios
Ratio Definition
Liquidity
1. Current ratio = Current assets / Current liabilities
2. Quick ratio = (Current assets – Inventory) / Current liabilities
Solvency & Interest Servicing
3. Debt-to-equity ratio = Total liabilities / Total equity
4. Debt-to-asset ratio = Total liabilities / Total assets
5. Equity-to-asset ratio = Total equity / Total assets
6. Interest coverage ratio = Operating income / Net interest expenses
Asset Efficiency
7. Days inventory = [Average inventory / COGS] × 365
8. Times inventory = 365 / Days inventory
9. Days debtors = [Average accounts receivable / Total revenue] × 365
10. Times debtors =365 / Days debtor
11. Days payable outstanding = [Average accounts payable / COGS] × 365
12. Times payable outstanding = 365 / Days payable outstanding
13. Cash cycle = Days inventory + Days debtors – Days payable outstanding
Market performance
14. P/E ratio = Share price / EPS
15. Dividend yield = DPS / Share Price
Profitability and DuPont Analysis
16. ROE = Net income / Average total Equity
17. ROA = Net income / Average total Assets
18. Net profit margin = Net income / Total revenue
19. Asset turnover = Total revenue / Average total assets
20. Equity multiplier = Average total assets / Average total equity
Dupont Analysis
Numerator Denominator
Net profit margin Net income Total revenue
×
Asset turnover Total revenue Average total assets
×
Equity multiplier Average total assets Average total equity
=
ROE Net income Average total equity