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4 pages/β‰ˆ1100 words
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MLA
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Business & Marketing
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English (U.S.)
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Topic:

Analysis Report of Accenture Company

Essay Instructions:

Company: Accenture

Steps:

1.   Select a company to analyze

Some suggestions for selecting your company include choosing: a company you wish to work at next, a company you want to obtain financial support for your own organization from, or your most admired company or organization. It is best to select a publically traded US Corporation that is currently making a profit as it will be the easiest for which to obtain understandable financial data.  As this is a corporate finance class we will be analyzing financial and accounting data.  A profitable company means that it has positive net income in each year.

2.   Collect at least three (but no more than ten) years of financial information

This information includes an income statement, balance sheet, statement of cash flows, stock price(s), numbers of shares (by class), and bonds by maturity date (if any).

3.   Create a common-sized income statement and balance sheet. 

Do the changes over time show that the company is becoming more or less profitable?

4.   Calculate the DuPont ratios

What do the ratios tell you about the nature of this business?

5.   Calculate the growth/decline in sales, costs, operating expenses, taxes, net income and EPS for 2 years if you collected three years of data.  You will have one less year of growth calculations than years of data.

Is the trend in net income explained by one large factor or several smaller ones?

6. Read the Company’s 10-K filing with the SEC.  Read Items 1 Business, 1A Risk Factors through Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations. (Example: For Apple this is 42 pages of text.)

Do the managers’ comments agree with your analysis of the numbers? 

7. Write your own 1000-word analysis of this company. 

Is the company doing better or worse?  What is going well and what seems to not be going well?  Will this company remain in business for the next 5, 10 or 20 years or do you think it will fail?

8. Produce 3 to 5 charts that tell your story about this company’s performance and recent direction.

9. Graph the company’s stock price over the three years in which you collected financial data and compare it to the S&P500 over the same time period. 

10.  Would you invest in this company’s stock or not?

If yes – at what price or time period would you sell?  If no – is there any price at which you would be a buyer?  If you wish a more challenging assignment, try to calculate the firm’s beta.

Essay Sample Content Preview:

Accenture Company Research Project
Author's Name
The Institutional Affiliation
Course Number and Name
Instructor Name
Assignment Due Date
Table of Content
Accenture Company Research Project
Analysis Report of Accenture Company
The report presents an analysis of Accenture PLC by using the financial data and examining it from different aspects.
1. Accenture PLC Background
Accenture is an Ireland-based multinational technology and consultation company that exists in more than 50 countries globally (Fortune, 2021). Accenture's primary services include strategic services for all types of the company's operations, risk management, customer relationship management, technology, integration policies, and cloud-based solutions for companies operating in different industries (Bloomberg, 2021). Accenture operates on the New York Stock Exchange with the ticker symbol of ACN and with a current share price of $353.79 as of 25th October 2021 (Yahoo Finance, 2021).
2. Three Years of Accenture of Financial Information
Accenture PLC income statements, balance sheets, and statements of cash flows from 2018 to 2020 are mentioned in the appendixes (See Appendix A, B & C). Additionally, Accenture stock prices and S&P 500 data from 2018 to 2020 on a monthly basis are also mentioned in the appendixes (See Appendix D). The Accenture number of shares is extracted from the income statements' financial data from 2018 to 2020.
3. Common Sized Income Statements and Balance Sheets
Figure 1: Common-Sized Income Statements of Accenture from 2018 to 2020
Figure 1 suggests that the net income as the percentage of revenues has risen from 9.90% in 2018 to 11.06% in 2019, and then further to 11.52% – a clear indication that Accenture is becoming more profitable over the years. Another indication is that the gross income as percentage of revenues has also risen from 30.70% in 2018 to 31.64% in 2020, an indication that Accenture is successful in improving its revenues over the years to accomplish higher gross income.
Figure 2: Common-Sized Balance Sheets of Accenture from 2018 to 2020
Figure 2 suggests that cash and short-term investments as a percentage of total assets have risen from 20.72% in 2018 to 22.95% in 2020 – an indication that Accenture is generating higher cash inflows to maintain the higher working capital level and suitable internal cash reserves.
4. Accenture DuPont Ratio
Table 1: DuPont Ratios of Accenture in 2020
Return on Equity (ROE):

Net profit Margin * Total Assets Turnover * Equity Multiplier



2020

Net Profit Margin

Net income/ Sales

11.52%

Total Asset Turnover

Revenue/ Average Total Assets

0.33

Equity Multiplier

Total Assets/ Total Equity

2.12




DuPont

= 11.52% * 0.33 * 2.12


Return on Equity (ROE)

8.09%


ROE value of 8.09% suggests that Accenture successfully generates high revenues by keeping the costs of goods sold low, and thus, net profit margin becomes high. However, the low asset turnover suggests that the company is not efficiently utilizing its assets to generate more revenues. Another important perspective ...
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