Business finance

CBUS 341 - PROJECT Page 1

CLARK ATLANTA UNIVERSITY

SCHOOL OF BUSINESS ADMINISTRATION

DEPARTMENT OF FINANCE

CBUS 341 BUSINESS FINANCE PROJECT

FALL 2017

PROJECT DEADLINE: DUE WEDNESDAY, NOVEMBER 15, 2017 FOR MONDAY/WEDNESDAY CLASS

AND THURSDAY, NOVEMBER 16, 2017 FOR TUESDAY/THURSDAY CLASSES. THE PROJECT IS DUE

AT THE START OF CLASS ON THE DATE SPECIFIED.

Each student has been assigned a company for analysis (see the list attached). Please check to ensure the company has

all needed information. If the company no longer exists or you are not able to obtain information for the period

required, please meet with your instructor to be assigned a different company.

PART I. DATA COLLECTION – 25 POINTS.

Using Bloomberg, Yahoo Finance, or any other reputable financial source, collect the following information for the

company. In all cases, the source of the data must be properly cited.

COMPANY INFORMATION

1. Company Name 2. Business Description 3. Key Management (Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer

(COO), Vice Presidents of Marketing, Management, Accounting, etc.

4. Company Standard Industrial Classification (SIC) Code. 5. Company Stock Symbol. 6. Stock Exchange where the stock is traded.

FINANCIAL STATEMENT AND STOCK PRICE INFORMATION

Using Bloomberg, Yahoo Finance, or any other reputable financial source, collect the following information for the

company for each of the last three fiscal years (use year-end data). In all cases, the source of the data must be

properly cited. All data must be copied from the actual source and provided as exhibits to the project.

Your data must include the logo (Yahoo Finance, Bloomberg, etc.) and date pulled (if from the internet). If

data does not include this identifying information you will received no credit for this project, and will make a

grade of zero (0).

1. The company’s annual financial statements, which include the income statement, balance sheet, and statements of cash flows. Provide the detailed income statement, balance sheet, and statement of cash flows.

2. Financial ratios for the company and the industry (industry ratio information can be found using the internet, Value Line, etc.). Refer to Chapter 3, page 64 of Essentials of Corporate Finance, 9th Edition, by Ross

Westerfield and Jordan for a list of the ratios required. Please highlight on the data sheet each ratio collected.

3. Stock Price per share. Please highlight on the data sheet each ratio collected. 4. Earnings per share. Please highlight on the data sheet each ratio collected. 5. Dividends per share. Please highlight on the data sheet each ratio collected. 6. Total number of shares outstanding. Please highlight on the data sheet each ratio collected. 7. Price-Earnings Ratio. Please highlight on the data sheet each ratio collected. 8. Total Market Value of Equity. Please highlight on the data sheet each ratio collected. 9. Stock Beta. Please highlight on the data sheet the Beta collected.

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RECENT ARTICLES

Provide two articles published within the last year on the company. The articles can come from magazine and/or

newspaper publications and can be printed from the internet. Do not use press releases from the company. Provide a

typed bibliography for each article citing the source and publication date. All articles must include date and where

published and provided as exhibits to the project. If the article does not include this identifying information

you will received no credit for this project, and will make a grade of zero (0).

PART II. PROJECT REPORT – 75 POINTS.

Each project should include a typed cover page that states the following:

1. Student Name 2. Name of Course and Course Number 3. Course Time and Section 4. Name of Company 5. Name of your Professor

Based upon the data collected in Part I, complete a type written, double-spaced report (maximum of 5 pages) that

covers the points listed below. The report must be written in your own words with proper citation as needed.

1. A description of the company defining its main and secondary lines of business, key management, stock symbol, and SIC Code.

2. Using the company’s income statements analyze the firm’s financial performance over the last three years. Specifically, for the past three years conduct a trend analysis using the variables provided below. The trend

analysis should be in the form of a table and provided as an exhibit to the report. Using the data from your trend

analysis, discuss how the company has performed over the period. Please use language that compares the

company’s performance over time (EXAMPLE: “Company A’s 2015 revenue increased by 5% over 2014’s

revenues).

2014 2015 2016

Total Revenue

Cost of Goods Sold

Net Income

3. Using the company’s balance sheets, analyze the firm’s financial performance over the last three years. Specifically, for the past three years conduct a trend analysis using the variables below. The trend analysis should

be in the form of a table and provided as an exhibit to the report. Using the data from your trend analysis, discuss

how the company has performed over the period. Please use language that compares the company’s

performance over time (EXAMPLE: Total Assets increased by 5% in 2015 due to a ten day increase in

days sales outstanding and to the purchase of $100 million in new property, plant and equipment.”).

2014 2015 2016

Current Assets

Total Assets

Total Liabilities

Total Stockholder’s Equity

4. Using the information provided below, analyze the firm’s statement of cash flows for the most recent period and

compare the firm’s cash flow performance to the prior two periods. In particular, identify the major sources or

uses of cash over the period. Please use language that compares the company’s major sources of cash inflows

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and outflows over time (Example: “Over the last 3 years, the major source of cash inflows for the company

was from financing activities, while operating activities generated cash outflows resulting from the net

income losses of the company over the last three years. In addition, the company’s recent acquisitions also

resulted in negative cash from investing activities over the three year period analyzed.”

2014 2015 2016

3-year

Total

Cash Flows from Operating Activities

Cash Flows from Investing Activities

Cash Flows from Financing Activities

Change in Cash

Ending Cash

5. Using the information collected in Section B, complete a three (3) year ratio analysis for the company. The ratio analysis should include the following ratios specified in Chapter 3 of your textbook, and the company information

requested in section B, parts 3-8. The spreadsheet should be provided as an exhibit at the end of the write-up and

is not included in the 5 page maximum for the report. Using the ratios specified below, discuss how the company

has performed over the three year period and compare its performance to the industry. Please use language that

compares the company’s performance over time and also to the industry. (EXAMPLE: “Company A’s

profitability has increased over the last three years as indicated by a 40% increase in the net profit margin

from 3% in 2014 to 5% in 2016. In addition, the company’s 3-year average net profit margin of 4% also

exceeds the industry average of 3%.”). Your discussion must include a discussion of each of the five ratio

groups discussed in class (Liquidity, Profitability, Efficiency-Asset utilization, Leverage and Market).

Ratio Analysis 2014 2015 2016

3-year

Average

3-year

Industry

Average

Current Ratio

Cash Ratio

Gross Profit Margin

Operating Profit Margin

Net Profit Margin

Return on Assets

Return on Equity

Total Asset turnover

Day’s Sales Outstanding

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Ratio Analysis (cont.) 2014 2015 2016

3-year

Average

3-year

Industry

Average

Day’s Inventory

Debt Ratio

Times Interest Earned Ratio

Price/Earnings Ratio

Market–to–Book Ratio

6. Using the Company’s Beta, discuss the riskiness of the company relative to the market.

7. Write a 1-2 paragraph summary of the recent articles concerning your firm. The write-up should explain why the information in the article is important to the company and how it impacts the company.

8. Based upon your review of the company, provide your opinion on the future performance expectations of the company. Please justify your recommendation.

*Extra Credit opportunity (10 points).

Complete your output tables for items 2, 3, 4 and 5 of the project report using excel. Your excel file should be a

part of final submission. For example, your ratios (item 4) should be calculated in excel, using the financial

statements you downloaded for your company already. Use a different tab (worksheet) for the ratio output,

and complete your ratio calculations by linking the financial statements to the ratio calculation cells.

PLEASE ATTACH THE DATA AND ARTICLES COLLECTED IN PART I TO THE END OF THE

REPORT.

Attached is the rubric that will be used to grade the project. Please refer to the rubric to ensure that you have fully

captured all elements that need to be completed for full credit on this project.

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CBUS 341 – BUSINESS FINANCE

RUBRIC FOR COMPANY ANALYSIS PROJECT

FALL 2017

Student Name: Company Name:

PART I.

DATA COLLECTION

(25 POINTS) Points Available

Points

Received Comments

Company Information

1 Company Name 1

2 Business Description 1

3 Key Management 1

4 SIC Code 1

5 Symbol 1

6 Exchange where Stock is Traded 1

Subtotal: 6

Financial Statement and Stock

Price Information

1 Income Statement 2

2 Balance Sheet 2

3 Statement of Cash Flows 2

4 Financial Ratios 8

5

Total Number of Shares

Outstanding 1

6 Beta 1

7 Total Market Value of Equity 1

Subtotal: 17

Recent Articles

1 Article 1 1

2 Article 2 1

Subtotal: 2

Data Collection Total Points: 25

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PART II.

DATA ANALYSIS

(75 POINTS)

Points

Available

Points

Received Comments

Project Report

1 Description of the Company. 5

2 Analyze the firm's financial

performance over last 3 years

using Income Statements.

8

3 Analyze the firm's financial

performance over last 3 years

using Balance Sheet Statements.

8

4 Analyze the firm's statement of

cash flows over last 3 years

5

5 Analyze the firm’s financial

performance over the last three

year’s using Ratio Analysis.

25

6 Beta Analysis. 5

7 Review the 2 articles collected on

the firm.

5

8 Opine on the future performance

expectations of the firm.

4

Subtotal: 65

Report Quality: Correct citation,

formatting, grammar, adherence

to directions

10

Report Total Points: 75

Project Total Points: 100

Extra Credit Assignment: 10

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COMPANY ASSIGNMENT LIST

STUDENT NAME COMPANY NAME

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40