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FINANCIAL ANALYSIS PROJECT – Worth 200 points

This assignment will be done in parts with a formal paper submitted at the end of the semester incorporating all the analysis. I will provide input as you submit each section. You should incorporate any suggestions I make for each section into your final paper.

Section 1: Company Research – Due Date MARCH 9TH – Worth 25 Points:

Chose a company that you have an interest in working for when you graduate or one you would like to invest in. Make this fun and chose a company that provides a good or service that is of interest to you. Once you chose a company, please complete the following:

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Find a copy of the company’s latest annual report and skim through it. You will be using this report for much of the analysis you complete in subsequent parts of this project. You might be able to find a 2013 year-end report at this point for some companies. If not, use the report for the 2012 year-end. Please make sure the annual report is comparative providing AT LEAST 3 years of financial data. Please locate the FULL annual report – not just the financial data. It should include management commentary as well as financial data.

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Please find at least 2 Internet articles about the company and read through those.

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Submit a PDF copy of the annual report you have chosen along with the two articles selected in DROPBOX.

Once you have completed reviewing the annual report and articles, please complete the following:

Provide a synopsis of the company providing information about the company’s history, product / services, major customers, major suppliers, and leadership. This should be 2-3 paragraphs in length.

Look up the current and historical stock prices for you company for the dates listed below. You should be able to find this information easily on the Internet using. Below are a couple of links you can use to find current and historical stock prices.

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http://www.marketwatch.com/tools/quotes/historical.asp

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http://www.dailyfinance.com/historical-stock-prices/

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http://finance.yahoo.com/stock-center/#mkt-movers

Using the dates below, prepare a graph showing the stock price fluctuation.

a. A current stock price

b. Stock Price at December 31, 2013

c. Stock Price at December 31, 2012

d. Stock Price at December 31. 2011

Below the graph provide a written analysis of the stock price and speculate why the company is seeing changesin their stock value. Reasons can involve company activities, the economy, current events/trends, etc. Thisanalysis should be 1-2 paragraphs in length.

Research and summarize at least two (2) news events (this may include mergers, acquisitions, or political issues) that occurred from 2010 to the present day. This is the purpose of your two required Internet articles. Speculate on the impact, if any, the event had on the company’s stock price. How might this information influence your decision to invest in the company? This section should be 2-3 paragraphs in length.

DELIVERABLES FOR PART 1:

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PDF file of company annual report.

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PDF copies of 2 Internet articles.

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Graph of stock prices

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Word document containing the commentary requested in parts 1, 2 and 3 above.

Section 2: Balance Sheet & Income Statement Analysis – Due Date MARCH 23rd – Worth 25 Points:

Complete the following and submit via Dropbox.

What are the primary assets held by the company based on the Balance Sheet? What does this information tell you about the company as a whole? This section should be 1-2 paragraphs in length.

Look at the company’s financing structure (debt versus equity). How is the company financing its operations and future growth – debt, issuance of common stock, or through operations (Retained Earnings)? How might that influence your investment decision? This section should be 1-2 paragraphs in length.

Complete a Horizontal Analysis of the company’s balance sheet and income statement using EXCEL for at least 2 years of data. All annual reports will provide comparative data. What does this analysis tell you about company trends over the past two years? This section should be 1-2 paragraphs in length.

Complete a Vertical Analysis of the company using at least 2 years of data. Do a Vertical Analysis on both the Income Statement and the Balance Sheet using EXCEL. Use Net Sales as your base figure on the Income Statement and Total Assets as your base figure on the Balance Sheet. What does this analysis tell you about the company over the past two years? This section should be 1-2 paragraphs in length.

DELIVERABLES FOR PART 2:

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Word document containing the commentary requested in parts 1-4 above.

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Excel spreadsheet with Horizontal analysis.

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Excel spreadsheet with Vertical analysis.

Section 3: Ratio Analysis – Due Date APRIL 6th – Worth 25 Points:

Complete the following and submit via Dropbox.

Complete a comparative (at least 2 years) ratio analysis of the company. You should calculate at least two ratios in each of the three financial performance categories – liquidity, profitability and solvency. Discuss the results and trends from year to year. What does this analysis tell you about the financial strength of the company? This section should be approximately 3 paragraphs in length.

DELIVERABLES FOR PART 3:

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Word document containing the commentary requested above.

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Excel spreadsheet with Ratio analysis (Please include formulas).

Section 4: Other Analysis – Due Date APRIL 15th – Worth 25 Points:

Complete the following and submit via Dropbox.

Review the company’s cash flow statement. Is the company’s cash position improving or deteriorating? What is the primary source of cash for the company? If the company has excess cash, how are they investing it? What does the information from the cash flow statement tell you about the company and how might that impact your decision to invest in the company? This section should be 2-3 paragraphs in length.

Review the audit report on both the financial statements and over internal control. Were there any problems with either report? If so, please explain. How might that impact your decision to invest in the company? This section should be 1-2 paragraphs in length.

Finally, review the management’s commentary (discussion and analysis). What information did this provide in terms of the future of the company? Would this information impact your decision to invest or seek employment at this company? This section should be 2-3 paragraphs in length.

DELIVERABLES FOR PART 4:

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Word document containing the commentary requested above.

Section 5: Complete and Finalize the Report – Due Date APRIL 30th – Worth 100 Points:

Please take all of the work and information completed above to prepare a report either recommending or discouraging investment in this company. The report should begin with your recommendation – buy or pass on the investment with some brief explanation of how you arrived at the decision. This should be a new section of the report and not a copy/paste of the material above after taking into consideration all the variables we considered when working on this assignment.

Then you should include each of the sections of the assignment (above) as justification for your decision. Please be sure to incorporate any suggestions that I have made in each part submission into your final paper. I will be looking for them in your final paper.

PAPER SPECIFICATIONS:

The paper should be completed in MS Word and submitted via Dropbox. Please double-space using a generally accepted 12 pt. font (Times New Roman, Arial, Cambria or Calibri). The paper should be a minimum (not including charts and Excel worksheets) of 5 pages in length but can be longer.

Please include the Stock Graph and Excel Worksheets prepared as either tables or illustrations embedded into the report or in an Appendix to the paper.

Please include a cover page for the paper in accordance with APA guidelines (include title of paper, your name, instructor’s name, the class section, and the date of submission on the cover page.)

A Bibliography (reference page) is required at the end of your paper. Please include references for the annual report, the two Internet articles, your stock prices, and any other data you used to complete your analysis and paper.

Proper grammar should be used and the paper should contain no spelling errors. Please use a Spell Check and Grammar Check before submitting the paper. I will take points off for excessive writing errors in your papers.

You should only submit original work. Submissions that are strikingly similar will be considered joint work and all parties submitting the paper will be provided a ZERO on the assignment. To avoid any problems, do not discuss the details of your paper with another class member that is doing the same company as you.

The assignment will be subject to the late penalty guidelines set forth in the syllabus. The exception is the FINAL PAPER due on April 30th. Due to the timing of the assignment, ABSOLUTELY NO LATE SUBMISSIONS will be accepted for SECTION 5 so please do not procrastinate! This project is worth a lot of points and can either boost or hurt your class average. I recommend that you make a strong effort throughout the assignment and spend some time on this.