• Writing Assignment: Financial Analysis
    190 points

In this assignment, assume you are a savvy financial analyst researching companies in which to invest.
Select a U.S. public-traded company you think might be a good investment and perform a financial analysis. Your analysis should include the following:

  • Company Overview. Conduct research and describe the company, its operations, locations, markets, and lines of business. Collect financial statements for the past three (3) years, fiscal or calendar (please insert these in the appendix). These financial statements must include at least the income statement and the balance sheet.
    INSTRUCTIONS AND TIPS:
  • For the first bullet point you will want to address the following sections as separate sub-headings:
  • Describe the company,
  • Its operations,
  • Its locations,
  • Its markets,
  • Its lines of businesses.
  • The second section of the first bullet point is simply a collection of the financial statements for the firm.You may find the financial statements from Yahoo Finance, Google Finance, and/or directly from the firm.The financial statements should include the balance sheet, the income statement, the cash flow statement, and the statement of retained earnings or the statement of owner’s equity.You may have to research the SEC 10-K company filing or the company’s annual shareholders’ report, both of which may be found under the Investor Relations tab on the company’s website.Please remember to include at least three-years of financial statements.Please include this information in an addendum to your work.You will not earn full credit by simply providing the hyper-links in the paper.Please provide all of the financial statements in the paper.
  • Evaluate the company’s vulnerability to current financial threats such as a recession, higher interest rates, and global competition.

INSTRUCTIONS AND TIPS:

For the second bullet point item you may want to use sub-headings to address the three topics separately.

oWhat are the current financial threats for your company from a recession?,

oFrom a higher interest rate environment?, and

oFrom increased global competition in your market/industry?

Please include a few paragraphs on each of the topics and remember to include references to each topic’s post.

  • Financial Performance. Based on the financial trends of the company, predict how these trends will impact financial performance in future periods. Explain your rationale for this prediction.

INSTRUCTIONS AND TIPS:

For the third bullet point item you may want to use Excel to address the financial trends.Please trend out any 5 ratios showing the figures from 2009, 2010, and 2011; and then forecast the 2012 ratio.Please label all information on a graph and explain which forecasting method you used in forecasting the trend for 2012.You may want to use a 2-period moving average.Please remember to include a brief summation of each of the five ratio’s forecasted figure for 2012.

  • Stock Price Analysis. Given the performance of the stock in the periods presented on the company’s financial statements, discuss how the stock is likely to perform in the future, what type of investor would be drawn to this stock, and make a recommendation to management to improve stock performance.

INSTRUCTIONS AND TIPS:

For the fourth bullet point item you may want to use sub-headings to address the following sections:

Please include the stock price movements on a chart to include 2009, 2010, 2011, and 2012’s amounts.The easiest way to do this is to provide a 5-year graph from Yahoo Finance.

Discuss how the stock is likely to perform in fiscal 2013.Please provide a paragraph or two on your predictions of the stock price and why you believe that the stock price is heading lower, higher, or staying the same in the future.

Address what type of investor would be attracted to this stock and why?Is this a short-term investment or a long-term investment?Is this a dividend growth investment, an under-valuation investment, or a rapid growth investment?You may want to state other reasons why an investor may be attracted to this stock.

Finally, please provide a paragraph recommendation to management on how they could improve the performance of their corporation’s stock.

Submit your analysis in the form of a 6-8 page paper in which you:

  1. Provide a detailed overview of a U.S. publicly traded company. This should be one to two pages in written analysis.
  2. Evaluate the company’s vulnerability to current financial threats such as a recession, higher interest rates, and global competition. This should be one to two pages in written analysis.
  3. Based on the financial trends of the company, predict how these trends will impact financial performance in future periods. Explain your rationale for this prediction. This section should graph at least five ratios for fiscal years 2009, 2010, and 2011 to predict for 2012. The ratios may be graphed in Excel, but the analysis should be provided in a Word document.
  4. Cite at least five (5) quality references.

Your assignment must:

  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

  • Critique financial management strategies that support business operations in various market environments.
  • Estimate the risk and return on financial investments.
  • Apply financial management options to corporate finance.
  • Use technology and information resources to research issues in financial management.
  • Write clearly and concisely about financial management using proper writing mechanics