The report must be 10n pages including everything.

| September 28, 2018

The
report must be 10n pages including everything.
The
objectives/purpose of the research paper project are to enable you to do a
comprehensive financial analysis of a publicly traded corporation; and provide
you with substantial information for you to make recommendations regarding
investing in this corporation.
Your financial analysis
report will be driven by a rigorous ratio analysis, and aggressively
supplemented with your written analysis, interpretation, and evaluation of the
data.
Your research should be
strategically driven by two probing questions:
-Would
you invest your financial capital in the selected firm as a shareholder?
-Would
you invest your human and intellectual capital in the firm as an employee?
Steps in preparation of
financial analysis report:
1.)
Select
a publicly held company

2.)
Select
a benchmark firm to compare your company against. The benchmark firm is
typically the largest competitor.

3.)
Obtain
the firm’s balance sheet, income statement, and statement of cash flows
for
the
past 5 years. Download or read the firm’s annual report.
4.) Go
to: .sec.gov/edgar/searchedgar/webusers.htm”>http://www.sec.gov/edgar/searchedgar/webusers.htm
Research EDGAR’s database
for additional SEC report filings: 8-k, 10-Q.
4.)
The
following table is the type of Excel or Word table that should be used to
gather and report your ratio and
financial performance data. Note the 5 financial diagnostic categories that
should be used in your analysis.

Financial diagnostic
categories

Chosen company
vs.

Benchmark
competitor

1.) Liquidity
of short-term assets

-Current ratio
-Cash ratio
-Quick ratio

-Current ratio
-Cash ratio
-Quick ratio

2.) Long-term
debt-paying ability

-Debt ratio
-Debt-equity ratio
-Times interest earned

-Debt ratio
-Debt-equity ratio
-Times interest earned

3.)
Profitability

-Net income/sales (profit
margin)
-Net income/assets (ROA)
-Net income/shareholder
equity (ROE)

-Net income/sales (profit
margin)
-Net income/assets (ROA)
-Net income/shareholder
equity (ROE)

4.) Asset
utilization/ management efficiency

-Total asset turnover
-Inventory
turnover measures
-Accounts receivable
turnover

-Total asset turnover
-Inventory
turnover measures
-Accounts receivable
turnover

5.) Market
measures

-Price/earnings ratio
-Earnings per common
share
-Dividend payout

-Price/earnings ratio
-Earnings per common
share
-Dividend payout

Use 2-3 ratios per
diagnostic category. Place your ratio calculations in the table for your
selected companies—primary company and benchmark competitor. Using 5 diagnostic
categories, and 3 ratios to assess each category, results in 15 ratio measures
per company that will be compared side by side.
6.) To validate
your research, 5 years of data should be analyzed.
7.)
The financial analysis report must be written properly. They must include a
title page, a table of contents, and a reference page. For both midterm and
final report, information sources from the web, etc. must be cited properly,
using APA style.

This
means that every table that you cut and pasted or typed from the web must have
a source at the bottom of the table AND that citing must also be included in a
reference page at the end of the report.

Your project should include:

a.
An
overview of the corporation.

i. Provide general information
regarding the type of business, products and/or services, location of
headquarters, name of CEO, number of employees, and countries of operation,
etc.

b.
The
latest financial statements

i. Get the income statement,
balance sheet, cash flow statement, and the statement of owners’ equity for the
past fiscal year. Create Turnitin-friendly versions of the financial
statements; do not just ‘cut and paste’ them in your report. Do not forget to
cite the source under each statement.

ii. If you cannot cut and paste
them, you may have to type in the information in a table in your report.

c.
A
summary of each financial statement

i. Take each statement and
state the key parts in words. Tell a
story from each of the financial statements.
For example, for the income statement, the story starts like, “Total Revenues
in 2010 were $10 billion, while Cost of Goods Sold were $8 billion, leaving a
gross profit margin of $2 billion, or 20 percent of total revenues….After
taking out interest and taxes from EBIT, the net income was $0.5 billion, or 5
percent of total revenues.”

d.
Ratio
calculation (include 5 major types of ratios. Refer to chapter 3, Analysis of
Financial Statements)

i. Organization of this
section is based on the FIVE types of ratios listed in the text book. Calculate the ratios from the financial
statements in part c above using Excel or your calculator and present them in a
table.

ii. Find industry financial
ratios online (eg. Yahoo.com) and compare your corporation’s ratios to these
industry ratios.

iii. Present your results
following the five types of ratios discussed in part d.

iv. A table with both corporation
and industry ratios is required;

v.
e.
Discussion
of key statistics provided by sources like Yahoo finance.

i. There are many different
other statistics available for your corporation. These include market value,
beta, and diluted EPS, etc. Discuss some of the key statistics that you think
can assist you to determine if this corporation is a good buy or sell.

f.
For
you to decide if a corporation’s stock is a good buy or sell, you must forecast
several key variables, including the stock price.

i. Use historical prices (5
years of monthly data recommended) and forecast the stock price for the next
year. Use regression analysis, and/or moving average, etc. to create your
forecast.

ii. Create a graph from the
historical data and show your forecast on the same graph. You can add a trend
line to the graph to help you with a forecast.
Include the graph in your report.

iii. You need to say
specifically what the forecasted value of the stock price is.

iv. You must address the
question, “Is this forecast reasonable?”
Must you amend your analysis to get a more reasonable forecast?

g.
Other
information pertinent to the corporation that could affect its future
performance and stock price.

i. This could include dividend
policy, capital structure, bond ratings, expert opinions on TV, new projects,
litigation, regulation, etc. Search for information on the web regarding this
corporation. Look at company complaint blogs, etc.

h.
Recommendation
regarding the future of this corporation.

i. Is the stock a good buy,
average buy, or a poor buy (implying a good sell)?

ii. Include a justification of
your recommendation based on your analysis and research.

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