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1.    Final Project: Financial Company Analysis

The course project will require students to complete a thorough financial analysis of an assigned publicly traded corporation. The project deliverables will be a structured Word document and accompanying Excel spreadsheets.

 

Prior to Week 1 students will be given a publicly-traded company to research. Project requirements must include the following analysis:

a.    One page description of the corporation: it’s products, markets, subsidiaries, risks

b.    Overall trend assessment of the company’s balance sheet and income statement for the last three to five years. 

c.    Selected ratio trend analysis. The following ratio categories must be included, with three ratios (minimum) from each category:

                                                          i.    Short-term solvency ratios, also known as liquidity ratios

                                                        ii.    Long-term solvency ratios, also known as financial leverage ratios

                                                       iii.    Asset management ratios, also known as turnover ratios

                                                       iv.    Profitability ratios

                                                        v.    Market value ratios. 

A three-year ratio trend analysis is the minimum expectation.

d.    Analysis of the company’s stock price, PE (Price-Earnings Ratio) and EPS (Earnings per Share Ratio) trends for the last three to five years. Analysis must include comparison to key market competitors.

e.    Evaluation of the firm’s current Beta (trend not required) with comparison to key market competitors. 

f.     Assessment of the firm’s capital structure (Debt to Equity Ratio) including any significant changes in the firm’s capital structure over the last three to five years.

g.    Calculate the WACC (weighted average cost of capital) using both the Security Market Line Approach and the Dividend Growth Model Approach. Compare the WACC for each approach, discussing the advantages and disadvantages of each.

h.    Assessment of the firm’s statement of cash flows for the last three to five years, including an assessment of the firm’s free cash flow over the last three to five years.

i.      Closing summary of the firm’s financial health in relation to the overall economy and within its industry, using analyst recommendations as a guide.

Week 4 draft:  Students are to submit a draft of the Financial Company Analysis by Day 7 of Week 4.  For full credit, the draft must indicate significant progress on the following items: 

a.    Draft of company description

b.    Draft of trend assessment of the company financial statements

c.    Ratio analysis 80% complete, prepared using Excel

d.    Draft of the written ratio and trend analysis

Instructor will return project w/ feedback to student via Bb. 

 

Project deliverable Week 7 details:

a.    Financial analysis Word file is to be a maximum 9 pages in length, not including a cover page and supporting reference appendices.

b.    Paper format: APA required

c.    Supporting financial data prepared using Excel.

d.    Students may include additional reference materials such as financial statements. 

e.    Students are not to copy and paste financial statements or other materials directly from the web into their analysis (Word) file.

f.     Reference page includes all references sited, APA format for references. 

Project grading rubric

 

Grading Criteria	Maximum Points
Description of the firm’s products, markets, subsidiaries, risks (1-pg max)	5
Income statement and balance sheet assessment (1-page maximum)	10
Ratio and trend analysis prepared with supporting analysis (3-page maximum)	30
Stock price and EPS analysis (1-page maximum)	10
Capital structure analysis and calculated WACC (1-page maximum)	15
Statement of cash flow analysis (1-page maximum)	10
Conclusion/summary of financial condition of the firm	5
Excel documentation concise, clear, supports narrative and requirements	5
Perfect spelling, punctuation, grammar; APA; concise business-style writing	10
Total	100