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P ROJECT D ES CRIP TION

Project Introduction:

This project signifies a milestone for you in your quest to earn an associate’s degree in the Business Accounting

Technology program. The focus of a financial analysis is to help management identify potential issues in the

organization. A horizontal analysis compares the income statement and balance sheet information of different periods

for the same organization. A vertical analysis uses the relationships among financial statement data elements to detect

trends. A ratio analysis uses the relationships among various financial elements to measure liquidity, efficiency, and

solvency. In this project, you need to carry out a financial analysis and comparisons for three different companies.

Course Objectives Tested:

1. Analyze the logic behind the determination of interest rates and the required rates of return in the capital

markets.

2. Compute a firm’s debt ratio to ascertain how the firm is financing its assets.

3. Calculate the present and future value of an investment and an annuity.

4. Demonstrate how portfolio diversification can affect the expected return and the riskiness of investments.

5. Compute the present and future value of a bond under conditions of varying market interest rates.

6. Research and use the guidelines for capital budgeting to evaluate investment proposals. Measure a project’s

free cash flows.

7. Calculate the cost of debt capital, preferred stock, and common stock.

P ROJECT S UBMIS S ION P LA N

Description/Requirements of Project Evaluation Criteria

Assessment Preparation Checklist:

Perform the following tasks to prepare for this assessment:

 Review the topic “Project Reckoner” in Week 6 online

lesson.

 Read Chapters 1–6, pp. 1–187, from your textbook,

Foundations of Finance: The Logic and Practice of

Financial Management. These chapters will help you

while you are completing your research and compiling

the ratios. The financial analysis will further enhance

 Did you analyze the trend for each

ratio during the three year timeframe?

 Did you compare the three company’s

ratios properly?

 Did you provide sufficient rationale to

justify your analysis of ratios for each

company?

 Did you effectively and completely

answer all the questions contained in

project detail three?

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Description/Requirements of Project Evaluation Criteria

your conceptual understanding of the material.

Title: Financial Analysis

1. Identify three companies from the Standard and Poor’s

500 Companies found in the ITT Tech Virtual Library. Two

of the companies should be in the same industry Global

Industry Classification Standards (GICS) while one should

be from a different industry segment.

2. Obtain the financial information for the selected

companies for the last three years by visiting the

individual company website and utilizing the Investor or

Investor Report link, which is where the financial

statements are located. You can also visit the SEC

website (www.sec.gov) to find the reports as well as

each company needs to submit the reports on an annual

basis. Calculate various financial ratios for each of the

three companies and add information to an Excel

spreadsheet.

3. Answer the following questions for each company:

a. What is the trend of each ratio during the three year

timeframe?

b. Is the trend favorable or unfavorable to the

company and give the rationale?

c. How does the company’s ratios compare to those of

the other same industry company chosen?

d. How does the company’s ratios compare to those of

the same industry chosen?

e. How does the company’s ratios compare to those of

the other industry company chosen by you earlier?

f. From an investor’s standpoint, which company

would you deem most financial viable and the best

investment? What is your rationale?

 Did you use APA formatting for the

entire paper?

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Description/Requirements of Project Evaluation Criteria

Submission Requirements:

 Submit your answer for the questions, including the ratio

analysis in a two page Microsoft Word document.

 Font: Arial; 12-point and double-spaced.

 Include a “References” page highlighting the resources

used from the textbook, the ITT Tech Virtual Library, and

credible websites to substantiate your answers. All

citations should be in APA format. See ITT Tech Virtual

Library> Reference (tab)> Frequently Used Categories>

Grammar, Writing and Style> APA Formatting and Style

Guide for help in APA formatting.

Due: Week 6

Grading Weight: 20%

End of Project Description