Financial Statement Analysis Project

MBA 560
Financial Statement Analysis Project
As a group of 2 you are to act as a financial advisor to a client interested in investing in a
particular industry. Your group of 2 will research 2 separate companies in the same industry (1
person per company) and provide a recommendation to your client which company, if any,
he/she should invest in. Some possible industries include:
Industry
Companies
Airline
American/Southwest Airlines/United
Fast Food
Wendy’s/McDonalds
Search Engine
Google/Yahoo
Pharmaceutical
Merck/Pfizer/Bristol Myers Squibb
Auto
Ford/GM
Retail
Gap/Guess/Abercrombie
Beverage
Coca Cola/Pepsi
Or you may select other companies or another industry. Each person in the class must select a
different company. Companies must be public companies.
PART A: Obtain Financial Statements
Obtain
3
years of financial statements (just the Balance Sheet and Income Statement) for your
company from SEC.GOV. 3
BALANCE SHEETS AND 3 INCOME STATEMENTS will be
submitted.
One set per company.
PART B: Enter data into FSAP (Financial Statement Analysis Package)
Enter the Balance Sheet and Income Statement amounts for
4
years into the Financial Statement
Analysis Package Excel file (just the Balance Sheet and Income Statement information, not the
Statement of Cash Flows). Make sure your balance sheet BALANCES!!!! Make sure your Net
Income matches your Net Income on the Income Statement.
Email one FSAP per company.
PART C: Company Analysis
Focus more on their position within the industry, recent developments, fluctuation in stock prices
relative to the market/industry, and other items of significance that would impact your
investment decision. Legal issues facing the company. New markets and new products. DO NOT
WRITE ABOUT THE HISTORY OF THE COMPANY (1 page – single spaced).
Submit 1
paper per company.
1
PART D: Industry Analysis
Summarize the economic outlook for your industry. Look at recent market activity, recent
indicators impacting your industry. Address recent change in stock prices. Obtain industry
averages for your ratio and common size analysis. Identify laws/regulations impacting your
industry. Identify market trends and geo/political events impacting your industry. Identify
Micro/Macro economic conditions impacting your industry. DO NOTE WRITE ABOUT YOUR
INDIVIDUAL COMPANIES. (1 page – single spaced).
Submit 1 paper per industry.
Data sources
: Standard and Poor’s Stock Reports or other Industry Surveys, Mergent’s
Industry Review. Finance.yahoo.com, moneycentral,msn.com, hoovers.com, and other
financial websites. Examine recommendations of other investment websites (buy/sell/hold).
PART E: FINAL PAPER
A.
Include Company Analysis (address prior comments)
B.
Include Industry Analysis (address prior comments)
C.
Include FSAP summary – Create tables summarizing the analysis tab of your FSAP.
Make it look professional.
D.
Write a summary of the significant findings from the financial statement analysis. (1
single spaced page). Address significant (Focus on the 2-4 items under each) Ratios,
Horizontal Analysis, and Common Sized Analysis from the FSAP (look under the
Analysis Tab). Do not address all the ratios and every line of vertical and horizontal
analysis, just what you feel is important.
E.
Based on your findings and after reading the other papers in your group, which company,
if any, would you invest in? Include
specific support
for your decision based on your
findings in the analysis.
Also include support (for or against) investing in the
industry you chose
.
GRADING
DO NOT COPY, DO NOT PLAGIARIZE, CITE APPROPRIATELY!!
USE APA
Final paper will be submitted to turnitin.com
Due
%
PART A – Financial Statements
15%
PART B – FSAP
15%
PART C – Company Analysis
15%
PART D – Industry Analysis (2 Companies submit one)
15%
PART E FINAL ESSAY – Analysis using Ratio,
Common Sized, and Vertical Analysis – Decision
40%
2
B.
Financial Statement Analysis Presentation: For the presentation, you will get into groups of 3 to
5 team members. You will then select two companies from the same industry on which you will
perform financial statement analysis. You will then present your findings, including an overview
of the companies, on the last day of classes.
Presentation Rubric
Evaluating Student Presentations
Department of Accounting, Business Information Systems, and Marketing
Criteria
Unacceptable
0-3
Acceptable
4-7
Exemplary
8-10
Total
Points
1)
Introduction
Student does not introduce topic
and offers no components for
discussion.
Student introduces topic and
begins presenting but does not
clearly state all variables for
discussion.
Student completely
introduces topic and clearly
states 3 to 4 components for
discussion.
2)
Organization
Audience cannot understand
presentation because there is no
sequence of information.
Student presents all
components but not in a logical
sequence (audience has some
difficulty following
presentation).
Student presents
information in logical,
interesting sequence which
audience can follow.
3) Dress and
Appearance
Student was not professionally
dressed and properly groomed.
Student was professionally
dressed but displayed one or
more distracting accessories.
Student was professionally
dressed devoid any
distracting accessories.
4) Subject
Knowledge
Student does not have grasp of
information; student cannot
answer questions about subject.
Student is able to answer
rudimentary questions and
appears uncomfortable with
the topic of discussion.
Student demonstrates full
knowledge (more than
required) by answering all
questions with explanations
and elaboration.
5) Graphics
Student uses superfluous
graphics or no graphics
Student occasionally uses
graphics that rarely support
text and presentation.
Student’s graphics explain
and reinforce screen text
and presentation.
6) PP Slides
and/or other
Visual
Student’s slide presentation (or
handout) has four or more
spelling errors and/or
grammatical errors. Less than
half of the slides follow PP rules
(1 topic, 4 to 6 bullets slide).
Slide presentation (or handout)
has three misspellings and/or
grammatical errors. More than
half of the slides follow PP
rules.
Slide presentation (or
handout) has no
misspellings or grammatical
errors. All slides follow PP
rules.
3
7) Eye
Contact
Student reads all of report with
no eye contact.
Student occasionally uses eye
contact, but still reads most of
report.
Student maintains eye
contact with audience,
seldom returning to notes.
8) Voice
Production
and Grammar
Usage
Student does not effectively
articulate, incorrectly pronounces
terms, and uses slang and/or
idiosyncrasies.
Student’s voice is low. Student
incorrectly pronounces terms.
Audience members have
difficulty hearing presentation.
Student uses a clear voice
and correct, precise
pronunciation of terms so
that all audience members
can hear presentation.
9) Conclusion
Student offered no conclusion
and ended presentation without
appropriate closing.
Student offered a presentation
summary but did not reiterate
variables that were discussed
and/or brought in new
information.
Student clearly summarized
presentation by briefly
reiterating all variables
discussed—without bringing
in new information.
10) Overall
Deliverance
Student uses no gestures, no
examples, and displays poor
voice characteristics and a lack
of confidence.
Student uses some gestures,
doesn’t show complete
confidence and presents with
little enthusiasm. Examples
were used but some did not
relate to presentation topic.
Student presents with poise
and confidence and uses
appropriate gestures,
posture, volume resonance,
and stimulating examples
that relate to the topic.
Total Points:
LEDGER FOR TOTAL POINTS SCORED
0-39 points = Unacceptable
40-79 points = Acceptable
80-100 points = Exempla

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