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Project Descriptions

FINANCIAL RESEARCH PROJECT ------- Worth 20% of the course grade.

Due date is stated in the course schedule.

The students have to complete an individual or group (determined by your professor) financial research project.

The purpose of this assignment is to test the students' ability to research, analyze and present financial

information. The students will be required to research key financial data, analyze the information, apply the

appropriate financial concepts and formulas and prepare a credible management level financial report.

THE PROJECT IS DESIGNED TO BE COMPLETED INDIVIDUALLY BY THE STUDENT (OR A GROUP) AS ASSIGNED BY

YOUR PROFESSOR)

OBJECTIVE

The specific objective of this graded written research exercise is to prepare an "executive level financial report" to

the Chief Financial Officer (CFO) of a mythical company in which you are employed as a financial analyst. This

report will pertain to the financial evaluation of a real, publicly-traded, company. It will require independent

research (web-based or library), careful financial analysis, and the proper application of key financial theories and

formulas.

The company that is to be analyzed for this project is (company selected by instructor). The list of the assigned

companies is posted in the conference area titled “The list of the assigned companies for the project”.

Alternatively, you can request me to approve another publicly traded company. This request must be submitted

before the end of the first week of the course. The request must include:

a. identification of the company by ticker symbol and name

b. a reasonable and appropriate explanation of why you want to examine the alternative company

c. the source of the analyst's report that will be used in the analysis (which must be submitted to me)

d. acknowledgement by you that all of the specific elements of the assignment (see below) will be prepared by

you and included in the final research project report

SITUATION

You are a financial analyst with the mythical High Technology Corporation ("HTC"). HTC is an established

manufacturer of a line of electronic components, which services an international market. HTC is currently a new

fully-integrated wireless communication service for world-wide use. A competitive technical and economic

product evaluation has determined that THE COMPANY THAT IS TO BE ANALYZED FOR THIS PROJECT (COMPANY

SELECTED BY INSTRUCTOR) (a real publicly-traded company) is the best potential candidate for a long-term

commitment. THE COMPANY (COMPANY SELECTED BY INSTRUCTOR) is offering a competitively favorable deal.

However, based on some serious general concerns about the fallout of companies in the industry in general, the

CEO has asked your CFO to conduct a financial analysis of THE COMPANY (COMPANY SELECTED BY INSTRUCTOR) to

determine if it is prudent to commit to this company's communication system. The cost of cutting over to the new

communications system is significant and any interruption in support during the next few years would adversely

affect HTC's performance and profit. Specifically, the question is: will THE COMPANY be financially viable over the

next two to three years?

YOUR SPECIFIC ASSIGNMENT

Your specific assignment is to research, analyze, and prepare a report for the CFO on the actual financial

performance of THE COMPANY THAT IS TO BE ANALYZED FOR THIS PROJECT (COMPANY SELECTED BY

INSTRUCTOR) for the last three years. In addition to reviewing the traditional financial performance indicators, you

are also to review THE COMPANY’S past and current stock performance for the last one year. Your report is to

consist of three parts:

(1) An evaluation of THE COMPANY’S financial performance for the last year. DuPont analysis is required for the

last 3 years.

(2) An evaluation of THE COMPANY’S stock performance for the last one year.

(3) Finally, a specific recommendation, with supporting rationale, as to whether or not THE COMPANY’S recent

trend in financial and stock performance is of sufficient financial strength to warrant entering into a long-term

commitment.

To assist you in your task, the CFO has provided the following general guidance. Since it is recognized that the

industry is undergoing a major contraction, it is very important to comparatively evaluate THE COMPANY’S

financial and stock performance trends against its Industry.

You may wish to include all necessary and relevant financial performance and stock information, trends, and

projections in supporting your recommendation. These factors may include, financial ratio trends and industry

comparatives, capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations,

and management and investment reports - when these documents are available.

REPORT REQUIREMENTS

YOUR SPECIFIC ASSIGNMENT

Research and analyze the following information for THE COMPANY (SELECTED BY INSTRUCTOR).

--Annual Balance Sheets for THE COMPANY for the last three years. --The Income Statements for THE COMPANY the last three years.

-- Annual reports, 10K or 10Q------

--Industry norms -----------

---Analysts’ reports on performance

-- Management reports or press releases

Using this information the students have to develop evaluation of the financial performance for THE COMPANY

(SELECTED BY INSTRUCTOR). (Totally 85% of the assignment grade)

1. Background and Industry (one short paragraph).

2. Select of most significant financial performance results for the company: Compare Revenue, net income,

working capital, total assets for the last three years and other results of your choice of the company

against the industry or main competitor. Present the table with this information in your report. Write

about 1 page of the analysis of these financial performance results. (15% of the project grade)

3. Find financial ratios for the company and its major competitor in the Internet. Write about 1-2 pages of

analysis of the ratio results you received. (15% of the project grade). Compare the ratio results against the

industry or main competitor.

4. Evaluate Return on Equity for the company for the last three years using the DuPont analysis. (10% of the

project grade). Compare the company’s results to a major competitor.

Taking the information from the Income statements and the Balance sheets, calculate the company’s

return on equity using the DuPont technique for the company for three years. Follow the formulas on

pages 437-438 of the textbook. Show your calculation! Write about 1 page of analysis of the results that

you received. Compare the results to main competitor. If the management of the company would like to

improve their return on equity, what should the management of these companies do?

5. Evaluate other areas of financial analysis: capital spending, stock growth, Beta values, credit rating service

valuations (if possible), bond rating valuations (if possible), etc. Make an overall conclusion about financial

performance of the company during the last years. Compare the results that you received against the

industry or main competitor. Summarize the results that you received in 1 page. What are the firm’s

financial strengths and weaknesses? (10% of the project grade)

6. Collect and evaluate the data about stock performance of the assigned company's for the last one year.

Compare the results that you received against the industry or main competitor.

Write about 1 page of analysis of the ratio results you received. (20% of the project grade).

7. Develop a specific recommendation, with supporting rationale, as to whether or not the assigned

company's recent trend in financial and stock performance is of sufficient financial strength to warrant

entering into a long-term commitment. (about 1 page) (15% of the project grade)

PRESENTATION OF PAPER AND WRITING (15%) of the project grade):

-Organization, Format and Presentation of Paper including the Title page, Introduction, Body, and Summary (4% of

the project grade)

Use of Tables, Figures and Other Graphics to Summarize and Support Analysis Presented in the Paper (3% of the

project grade)

Logical and Smooth Flowing Transitions and Relationships Among Sections of the Written Report (3% of the project

grade)

Research Sources and Significance of Research Information and Data, Use of APA Citation Methodology (5% of the

project grade)

Your final report is to be an executive-level financial report, directed to the CFO. This report should be about 6-10

double-spaced typewritten pages (without tables and graphs). Include suitable comparative, quantitative and

qualitative analyses and conclude with a specific and supported recommendation on the projected financial

viability of THE COMPANY THAT IS TO BE ANALYZED FOR THIS PROJECT (COMPANY SELECTED BY INSTRUCTOR) for

the next several years.

Essential research data, financial calculations and other documentation as necessary to support your

recommendation should be referred to in summary form in your report and attached in detail as enclosures. All

major sources should be referenced. There is no set limit to the size of the enclosures, but it is recommended that

only essential enclosures be attached. You should use references and bibliography to identify any remaining

supporting documents you wish to include.

The Individual Research Report must be posted to the LEO Student Assignments as a Attachments are limited to a

maximum two files in doc, docx., xls. xlsx., or rtf. formats. OTHER FORMATS ARE NOT ACCEPTABLE, will not be

reviewed and graded.

If these formats are not available, use the following option:

File - Save As – in the bottom of the window for saving file you see “save as type” – choose type Rich Text Format

for doc. file, and previous option of Excel for Excel file.

Pdf. files will not be accepted and graded.

All works must be Word processed. Handwritten and scanned work will not be accepted and graded.

This report is an individual effort and must be researched, developed and prepared by you. All questions related

to this assignment, should be referred to the mythical CFO (i.e., your instructor).