QUESTION
First Course Project
The purpose of this project is to help you develop skills
not only in performing the calculations behind financial analysis but
interpreting the numbers as well.
You are to pick a company. You should pick one either from
the industry in which you are currently working or an industry in which you are
interested. You could also pick a division of a company. It is imperative to use that sufficient data
about your company and that it is available. One way to do this is to pick a
publicly held company. If you pick a privately held company or a division of a
company, make sure that the data necessary to do a significant financial
analysis is available.
If you use data that is not publicly available, be sure to
talk to your manager and to make absolutely sure that revealing that data is
not a problem.
You will also need to find a standard against which to
compare your findings. This could be a different company in the same industry. This
could also be the same company at a different time. Additionally, average or
benchmark numbers are available for several industries. If you decide to use a
different company in the same industry or the same company at a different time,
make sure that there are enough differences between the two to make an analysis
meaningful.
After you have selected a company, put yourself in the place
of an analyst who has been asked to perform an analysis of the company and
provide a recommendation to management.
Use ratio analysis, common size analysis, or other
techniques to determine areas in which the company is doing well as well as
areas that management should look at. Then, present your analysis and
recommendations in the form of a paper.
A good place to start would be to perform a complete DuPont
analysis of the company and compare it to the standard. The DuPont analysis might provide guidance as
to what particular areas of the company should be examined next and what ratios
should be calculated. If the DuPont analysis does not reveal anything useful,
you might wish to calculate several of the ratios that are available to you.
Deliverable
The completed paper should be about 1,000 words long. In the
paper, you do not have to explain the ratios in depth. You may assume that the
reader has a basic understanding of finance and knows what ratio analysis is,
although he or she might not be able to list all the ratios and how to
calculate them from memory. The reader is not going to want a lot of background
about financial analysis. He or she really wants information that he or she can
apply to the given situation, which is the company that you have selected.
If you like, you can write the paper in the form of a memo
to management. You do not have to cite your source for how to calculate the
ratios. You do need to provide a reference to where you got that data not only
for your subject company but for the other company or standard to which you
compared your company.
·
The spirit of this assignment is for you to
calculate and interpret the results. The purpose is not for you to find
calculations and interpretations that have been done by someone else.
·
The paper is expected to conform to the
standards for graduate school writing.
·
The purpose of your analysis is internal
evaluation. Refrain from using stock market valuation ratios.
When you have completed the project, place it in one Word
document and place that document in the appropriate dropbox.
ANSWER:
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