Writing Assignment for Basic Analysis of Financial Statements
Requirement
You will work with one or two of your classmates together and submit your group report (with names
of team members) individually to the Section “Writing Assignment-Financial Statement Analysis” on
the COOL website through your own account. For the analysis of public listed companies in an
industry, each student is required to choose one company to study so that a group with 2 (3) students
will analyze 2 (3) companies. The submitted report is written either in English or in Chinese, and the
deadline of the report is June 7 (Wednesday).
Grading Rubrics
Your report will be graded based on the accuracy and the quality of your answers to the questions.
Specifically, your work will be judged on the basis of the precision, completion, report presentation,
dedication and thoughtful analysis and reasoning. Writing in English is encouraged and will earn
extra points.
Assignment
The assignment is based on the contents of Chapter 15: Financial Analysis: The Big Picture. Though
the chapter is not fully covered in the class, this assignment encourages you to read the textbook and
review related concepts learned from this course. It consists of two parts: one is to summarize
information and answer related questions for a partial financial report attached in the Section
“Writing Assignment- Financial Statement Analysis” on the COOL, and the other is to find information
from financial reports issued by public listed companies in an industry of your interest.
Part I: Summarize Information from a Partial Financial Report
Please go to the Section “Writing Assignment- Financial Statement Analysis” and download the given
partial financial report. The report is an excerpt (68 pages) from 2022 annual filing by China Steel
Corporation. The filing is only for the parent company and includes four major financial statements
and related footnote information.
Answer the following questions for the Year 2022 (Be mindful of the unit used in the report):
1. What percentage does the financial assets at fair value through other comprehensive income
account for total assets and the bonds payable account for total liabilities respectively? Round to
the second decimal place.
2. How much is the cost in total for the property, plant, and equipment, its accumulated depreciation,
and its carrying cost reported at the year-end?
3. What major items are included in the property, plant, and equipment, and how are they
depreciated by the company in accounting?
4. Find out the annual depreciation expense from the property, plant, and equipment and from
the lease arrangement respectively.
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5. How many ordinary shares were authorized and issued respectively? How many ordinary shares
were bought back and held by the company at the end of 2022? How much was the book value for
the holding at the end of 2022?
6. A share premium is the amount received by a company over and above the par value of its shares.
What account name is used instead in the report for the share premium? How much has been
recorded till the end of 2022 for the transactions related to treasury share?
7. How much cash dividends and share dividends did the company pay to ordinary and preference
shareholders respectively for the 2021 earnings? (state in per share and in total)
8. When is the shareholders’ meeting scheduled in 2023? Regarding the appropriations of earnings,
when and how much dividends had been proposed by the board of directors to pay in 2023 to
ordinary and preference shareholders respectively? (state in per share and in total)
9. Describe in your own words the rights entitled to preference shareholders of the company. Why
did preference shareholders receive more dividends per share from the earnings for 2021 than
from the earnings for 2020?
10. Find the net income, other comprehensive income, and total comprehensive income for the year of
2022. How much of the unappropriated earnings is related to the other comprehensive income for
the year?
11. Assume that operating revenues are all made through credit sales, and interest expense is
equivalent to reported finance costs. For 2022, figure out (a) current ratio, (b) accounts receivable
turnover, (c) inventory turnover, (d) profit margin, (e) asset turnover, (f) ROA, (g) ROE,(h) basic EPS,
(i) debt to assets ratio, and (j) times interest earned. (Show your calculation and round to the 3rd
decimal place.) Hint: cost of goods sold are inventories recognized as operating costs and total
accounts receivable also includes the one from related parties.
Part II: Find Information from Financial Reports of Selected Companies
The public listed companies in Taiwan are required to file their annual reports to the Financial
Supervisory Commission (FSC) and make it available to the general public every year. As external
users of accounting information, you can find useful information from their filings to know the
company you intend to work for, to select the one you are willing to make investment to, or to ensure
your investment on the right path.
Go to the ISIN code query system (https://www.twse.com.tw/en/products/code/query.html for English;
https://www.twse.com.tw/zh/products/code/query.html for Chinese) maintained by Taiwan Stock
Exchange, choose an industry of your interest to study and select two companies who are likely
competitors to each other in the industry (select three companies if there are three students in a
group). Also email your selection as a group with the names of your team members to our TA (Nien-Ya)
at r11722017@ntu.edu.tw by May 5 (Friday) to ensure you on the right track for the assignment.
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Visit the website of Market Observation Post System (http://mops.twse.com.tw) for the filings and look
into these companies’ annual filings and identify the following information for each company:
1. State the names of selected companies and their security codes (e.g. the security code of
China Steel Co. is 2002).
2. What is the fiscal year-end of financial statements?
3. What is the unit of the statements? (dollar, thousand dollars, million dollars or else)
4. The company’s net income (it may report as consolidated net income attributable to XXX, or net
income applicable to ordinary shareholders) for the most recent year.
5. The company’s total assets, total liabilities, and total shareholders’ equity for the most recent year.
6. Which public accounting firm audited the company’s financial statements?
(The company is usually audited by one of Big 4 accounting firm, that is, Ernst and Young, KPGM,
Deloitte, or PricewaterhouseCoopers /PwC/, or others)
7. For the most recent 3 years, figure out the company’s return on assets (ROA), earning per share
(basic EPS; diluted EPS is more conservative), and return on equity (ROE). Outline the company’s
performance over these years according to these ratios.
8. Go to the stock exchange website and find the historical share price. Plot the company’s share
price for recent 3 years to see the trending.
Taiwan Stock Exchange (http://www.twse.com.tw)
(Find the monthly stock price by clicking “Market Info” and “Trading Value/Volume of Individual
Securities” and “Monthly”. There is an option “Download CSV” available to you and further
arrangement can be done for these prices in an excel file)
Taipei Exchange (https://www.tpex.org.tw)
(Find the daily stock price by clicking “Mainboard” and “After-Hour Trading Information” and
“Stock Daily Information”. “Download CSV” available to you and further arrangement can be
done for these prices in an excel file)
9. Which company are you willing to work for or to make investment to? Support your decision with
your reasoning and related analysis.
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