Financial Analysis Summary: Section 9 should be a minimum of 800–1000 words, not counting titles, abstract and references. In this unit all files for the financial analysis report from Units 1, 3, and 5 should be submitted.

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Assignment 2: Financial Analysis Report - Final Project

Complete the financial analysis report in a white paper which is due in Unit 5 along with all the

previous sections submitted in weeks 1and 3.

Your white paper will be driven by a rigorous ratio analysis, and aggressively supplemented

with your written analysis, interpretation, and evaluation of the data.

Your research should be strategically driven by two probing questions:

● Would you invest your financial capital in the selected firm as a shareholder?

● Would you invest your human and intellectual capital in the firm as an employee?

The final paper should contain your entire work. You must submit sections 1–9 in Week

5.

Completed in Unit 1: Sections 1–6, the financial statements, can be submitted as a separate

file in pdf. format, or included in the Word® file.

Completed in Unit 3: Sections 7–8, the ratio calculations can be submitted as a separate

Excel® file or included in the Word® file.

Completed in Unit 5: Section 9 should be a minimum of 800–1000 words, not counting titles,

abstract and references. In this unit all files for the financial analysis report from Units 1, 3, and

5 should be submitted.

Sections of the white paper:

Due in Unit 1:

1. Select a publicly held company.

2. Select a benchmark firm to compare your company against. The benchmark firm is

typically the largest competitor.

3. Obtain the firm’s balance sheet, income statement, and statement of cash flows for the

past 3 years. Download and read the firm’s annual report to get a sense of this company.

4. State why you chose the companies you did.

5. What are the differences between the two companies?

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6. State why you would or would not invest in this company versus the competitor (i.e.

benchmark firm). The Annual Report and the financials of the competitor should not be

submitted.

Due in Unit 3:

7. Go to: http://www.sec.gov/edgar/searchedgar/webusers.htm

Research EDGAR’s database for additional SEC report filings: 8-k, 10-Q.

8. The following table is the type of Excel or Word table that should be used to gather and

report the ratio and financial performance data that reflect the most current full year’s

annualized financial ratio data. Note the 5 financial diagnostic categories that

should be used in your analysis. Use 2–3 ratios per diagnostic category. Place your

ratio calculations in the table for your selected companies — primary company and

benchmark competitor. Using 5 diagnostic categories, and 3 ratios to assess each

category, report the 15 ratio measures per company that will be compared side by side.

There are many different ratios that you can use. Here are some examples:

(a) Liquidity of short-term assets: Current, Quick, Cash Ratios; (b) Long-term

debt paying ability: Long-term Debt/Equity, Interest Coverage, Debt service,

Time Interest Earned Ratios; (c) Profit: Gross Margin, Operating Margin, Net

Margin, ROA, ROE and (d) Asset utilization/management efficiency: Inventory

turnover, Day Sales inventory, Receivables turnover, Fixed asset turnover,

Total asset turnover Ratios; e. Market measures: P/E, PEG, Dividend Yield,

P/B.

• To validate your research, use the most current full year’s annualized data.

Use the existing table provided or create a table in Word or Excel.

Unit 3 Section 8. Strategic Financial Analysis

Financial diagnostic categories

Chosen company vs. Benchmark competitor

1.) Liquidity of short-term assets

-Current ratio

-Cash ratio

-Quick ratio

-Current ratio

-Cash ratio

-Quick ratio

2.) Long-term debt-paying ability

-Debt ratio

-Debt-equity ratio

-Times interest earned

-Debt ratio

-Debt-equity ratio

-Times interest earned

3.) Profitability -Net income/sales (profit margin)

-Net income/sales (profit margin)

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Due in Unit 5:

9. Financial Analysis Summary: Section 9 should be a minimum of 800–1000 words, not

counting titles, abstract and references. In this unit all files for the financial analysis report from

Units 1, 3, and 5 should be submitted.

Based on your research, ratio analyses, and calculations regarding the most current full year’s

annualized financial data, comment on the following questions:

● How well has management added value?

● Is the company's financial performance improving?

● What are the key strengths and risks for this company?

● Would you invest your financial capital in the selected firm as a shareholder?

Why or why not?

● Would you invest your human and intellectual capital in the firm as an employee? Why or

why not?

Submit Section 9 in APA format and citation style per the most recent APA edition together with

all your previous work from Units 1 and 3 should be submitted to the Unit 5 Assignment 2

Dropbox.

Unit 5 Financial Analysis Report — Final White Paper: Grading Rubric

Criteria

Level 4 Level 3 Level 2 Level 1 Earned:

(Excellent) (Good) (Fair) (Poor)

-Net income/assets (ROA)

-Net income/shareholder equity (ROE)

-Net income/assets (ROA)

-Net income/shareholder equity (ROE)

4.) Asset utilization/management efficiency

-Total asset turnover

-Inventory turnover measures

-Accounts receivable turnover

-Total asset turnover

-Inventory turnover measures

-Accounts receivable turnover

5.) Market measures

-Price/earnings ratio

-Earnings per common share

-Dividend payout

-Price/earnings ratio

-Earnings per common share

-Dividend payout

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Criterion 1:

(20 pts.)

Writing and

800–1000

words, spelling,

grammar, and

the most recent

edition for APA

format and

citation style

including a title,

abstract, and

references

Consistently and ably uses properly structured paragraphs, sentences, grammar, and spelling. Includes the title, abstract, and references pages and mostly uses the most recent edition APA format and citation style.

Consistently and ably uses properly structured paragraphs, sentences, grammar, and spelling, with some minor errors. Includes the title, abstract, and references pages and partially uses the most recent edition

Inconsistently uses properly structured paragraphs, sentences, grammar, and spelling. Document includes quite a few errors. Includes the title, abstract, and references pages with several errors in format and APA style. Partially uses the most recent edition APA format and citation style but there are several errors.

Does not consistently y use properly structured paragraphs, sentences, grammar, and spelling. Document includes glaring errors. Does not include all of the title, abstract, and reference pages in APA format and only attempts to use the most recent APA citation style and format in the paper.

Mechanics and structure

20 16 14 12

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Criterion 2: (50 pts.) • Thoroughly applies financial ratios to analyze company’s financial position in relation to a benchmark competitor. • Applies the results of a thorough financial ratio analysis to make an investment decision. He/she explains why or why not to invest as an employee and as a shareholder regarding a publicly held company based on the checklist questions and criteria.

Thoroughly applies 30 financial ratios correctly to the analysis of a publicly held company and a benchmark competitor (25 pts.) Uses the result of the ratio analysis to explain the decision to invest in the company as a shareholder and as an employee, in a thoroughly informative and thoughtful manner. (25 pts.)

Applies 24–27 financial ratios correctly to the analysis of a publicly held company and a benchmark competitor in a somewhat thorough manner (21 pts.) Uses the results of the ratio analysis to explain the decision to invest in the company as a shareholder and as an employee, in a somewhat informative and thoughtful manner. (21 pts.)

Partially applies 21–23 financial ratios correctly to analyze a publicly held company and a benchmark competitor (17 pts.) Uses financial ratio analysis to explain a decision to invest in the company or not in a general manner from the employee’s and the investor’s viewpoint. (18 pts.)

Applies financial 18–20 ratios correctly to analyze a publicly held company and a benchmark competitor but does so with some errors (15 pts.)

Uses financial ratio analysis to generally support a decision whether to invest or not, but only from an investor’s viewpoint. (15 pts.)

Content 50 42 35 30

Criterion 3: (30 pts.) Critical thinking

and analysis

Response exhibits strong higher-order critical thinking and analysis (e.g., evaluation). Paper shows original thought.

Response exhibits limited higher-order critical thinking and analysis (e.g., application of information). Paper shows some original thought.

Response exhibits simplistic or reductive thinking and analysis but does demonstrate comprehension. Paper shows no original thought.

Response exhibits simplistic or reductive thinking and analysis and demonstrates limited knowledge of the subject matter.

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Critical thinking and analysis

30 24 21 18

Total (100 pts.) Less than poor = 0 pts.

Earned: