This is the second of three milestone assignments that will lead to completion of your course project. In this assignment, you will complete Critical Element II: Analysis of Financial Statements. 

This milestone addresses the following course outcomes: 

a.  Analyze results of consolidated financial statements for informing internal and external users of financial statements.

b.  Analyze financial statement accounts using assertions related to the recognition, measurement, valuation, calculation, presentation, and disclosure of financial information for their accuracy and reliability Continue to work with the company you chose to use in building your portfolio. 

For detailed instructions, see the Guidelines and Rubric document. 

Specifically, the following critical elements must be addressed: 

ii. Analysis of Financial Statements: For this milestone, you will continue to develop material to be included in your financial analysis paper. You will need to research your chosen company and obtain the last few years (at least two) of financial statements (information that is available to the public online) in order to answer the following questions: 

A. Based on the information that you have gathered, explain the changes in financial ratios. Has anything changed in the few years of financial statements that you have obtained? What are the reasons for these changes? 

B. Based on the information you have gathered, analyze the changes in the financial reports regarding cash. Be sure to examine the statement of cash flows. What are the reasons for these changes? 

C. Based on the information you have gathered, analyze the changes in the financial reports regarding the accounts receivable account balance. What are the reasons for these changes? 

D. Describe the type of inventory valuation method that your company uses and explain why it uses this method. What are the benefits of this method? 

E. Based on industry trends, future plans of your company, and the information you have gathered, predict how your company will perform in the following year compared to competitors. 

Guidelines for Submission: Prepare your paper using Microsoft Word. It should be 2 to 3 pages in length, not including the cover page and reference page. 

Follow APA formatting guidelines using appropriate headings, double spacing, 12-point Times New Roman font, and one-inch margins. 

Support your arguments with at least three peer-reviewed sources cited in APA format.