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Project 1 Report
Instructions:Answer the five questions below. They focus entirely on the financial health of Largo Global Inc. (LGI) based on the three years of income statement and balance sheet data provided in the Excel workbook. Base your analysis only on the financial statements provided in the Excel workbook. Provide support for your reasoning from the readings in Project 1, Step 1, and the discussion in Project 1, Step 3. Be sure to cite your sources.
Provide adetailedresponse below each question.Use 12-point font and double spacing. Maintain the existing margins in this document. Your final Word document, including the questions,should not exceed 5 pages. Include a title page in addition to the five pages. Any tables and graphs you choose to include are also excluded from the five-page limit.Name your document as follows:P1_Final_lastname_Report_date.
You must address all five questions and make full use of the information on tabs 2–4 as well as the competitor and industry data in the Excel workbook (ratio, common-size, and cash flow analysis).
You are strongly encouraged to exceed the requirements by refining your analysis.Consider other tools and techniques that were discussed in the required and recommended reading for Project 1. This meansadding an in-depth explanation of what happened in the three years for which data was providedto make precise recommendations to LGI.
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Title Page
Name
Course and section number
Faculty name
Submission date
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Questions:
1.How would you assess the overall financial health of Largo Global Inc. (LGI)?You will need to provide a broad view of the main trends that emerge from your analyses of the information in tabs 2, 3, and 4. Your key findings should be synthesized and highlight a clear diagnostic of LGI’s financial strength and/or weakness.[HINT: all 5 questions are interrelated and may sometimes build on each other – it is imperative that youdevelop a “blue-print” or an outline of what you are answering for eachquestion. Do not answer each question independently as if they were not connected. You should not be redundant but should make sure that you are judiciously coordinating these 5 questions. Question 1 and 5 should be providing the introduction and conclusion of your analysis. Questions 2, 3, and 4 should be providing the “body” or development of your analysis – with a focus on operations, investing, and financing]
[insert your answer here]
Largo Global Inc overall financial health was assessed base on ratio analysis, common- size analysis, and cash flow analysis.
Ratio Analysis:
Largo performance based on the data from 2018 to 2020 under liquidity ratios showed an upward and downward trend in terms of Largo ability to pay it short terms obligations like employee salaries, Electricity and water bill, office supplies and its rent. This trend
Efficiency ratio ( how efficiently largo uses its it assest
2.How is LGI doing in terms of operating efficiency? How would you assess its performance compared to its main competitor and the industry index? What are the principal areas that need to be addressed to strengthen LGI’ s bottom line?Identify and use key indicators from all 3 analyses that provide insight about LGI’s operations. [HINT: Focus of this question is the Income Statement and the Net Working Capital (NWC) as it relates to Current Assets and Current Liabilities]
[insert your answer here]
Common size analysis
3.How is LGI doing in terms of using assets efficiently? How would you assess it compared to its main competitor and the industry index? What are the principal areas that need to be addressed to strengthen the left-hand side of its balance sheet?Identify and use key indicators from all 3 analyses that provide insight about LGI’s assets. [HINT: Focus of this question is the firm’s assets excluding current asset]
[insert your answer here]
4.How is LGI doing in terms of financial leverage? How would you assess it compared to its main competitor and the industry index? What are the principal areas that need to be addressed to strengthen the right-hand side of its balance sheet?Identify and use key indicators from all 3 analyses that provide insight about LGI’s debt and equity mix. [HINT: Focus of this question is the firm’s liabilities and equity excluding current liabilities]
[insert your answer here]
5.Based on the financial strengths and weaknesses of LGI, how would you prioritize actions that will ultimately satisfyLGI’ s shareholders? Make specific recommendations that clearly identify the decisions LGI’ s board and executives need to make. What actions do they need to take? Set quantifiable targets and objectives for LGI. Your answers must be supported by all arguments developed in questions 2, 3, and 4. In addition, make sure you use data not already used in previous questions. [HINT: Be strategic as you will revisit this question when you reach the last project of this course.]
[insert your answer here]
