We have time for this project but I have to let my professor know the companies for the project in 30 hours. So please check the instructions and message me the companies. 

I uploaded a word document which explains the project. The powerpoint is a good example to understand the project.

This is really a continuation of material from FIN 305 as I am asking you to analyze a company using the traditional tools of ratios and a common size Income Statement.  Additionally, in item III G. you will see that I have asked you to evaluate the firm’s capital structure (the proportion of debt vs.. equity).

Your report must be a PowerPoint presentation – use as many slides as necessary but please don’t get carried away.  Also remember that PowerPoints are not meant to be “paragraph after paragraph” of writing, but rather the highlights of your findings which will be mostly in bullet-point format.  You may need to explain some of your findings in more detail of course and I am looking for an analysis that would include the “so what” of your findings.

What you should do this week is select the two publicly-traded companies you will be using for your project.  Note that they should NOT be financial institutions.  Also please do not use Wal-Mart, K-mart, Coke or Pepsi.  I’ve seen too many of these!

The time period for the analysis should include a minimum of three full years (five is better) plus

interim statements for the most recent year. In addition to the financial statements and other

material in the annual and/or 10K reports, you should review relevant materials from other

sources mentioned in class or found in your text.

FIN 306 Individual Project

Structured External Assignment

Assumption:

You are a financial analyst working for a major investment house. You have been given a major corporation (actually it’s your choice*) to analyze for its investment potential

*Do NOT choose a financial organization, stay with manufacturing or retail companies that are publicly traded.

Assignment:

Based on your analysis of the firm’s financial statements and any relevant supplementary information you can obtain about the firm and its operating environment. Consider using Value Line as one of your sources. Identify areas in which the company is performing well (strengths) and advise your boss of any problem areas (weaknesses).

Include in your analysis an assessment of how the firm’s strengths and weaknesses affect its credit worthiness and investment potential.

Data:

The time period for the analysis should include a minimum of three full years (five is better) plus interim statements for the most recent year. In addition to the financial statements and other material in the annual and/or 10K reports, you should review relevant materials from other sources mentioned in class or found in your text.

For comparison data use whomever you consider to be your major competitor.

Remember – your must use both financial ratios
and

a common-sized income statements.

Outline:

The attached outline is provided for guidance, but the analysis should be adjusted, as appropriate, to conform to the individual characteristics of the firm.

Note to students: please remember do not select a financial institution for your company.

Suggested Outline for Financial Statement Analysis – PowerPoint Presentation

For PowerPoints items in Sections 1 & 2 should be 1 slide each. For section 3 it’s your call. Cover those important ratios and significant issues found in the common-sized income statement and in your analysis of the capital structure of the firm. Remember however that PowerPoint slides are not meant to be an eye chart. If you have more than 6 typed lines on one slide – you needed another slide!

I. Introduction

II. Firm, Industry and Environment (please be brief,
this IS a finance and accounting course not a history class!)

A. Description of firm and its management

B. Discussion of the competitive environment

C. Economic climate and outlook

D. Other factors as appropriate, e.g. governmental regulations, labor issues, litigation pending

III. Evaluation of Financial Statements (note key word is “evaluation”)

A. Overview

B. Short-term liquidity

C. Activity Ratios

D. Financial Leverage (Debt Ratios)

E. Profitability and Market Ratios

F. Common-sized Income Statement Analysis

G. Discussion of the Company’s capital structure

IV. Outlook, Summary and Conclusions

A. Outlook for performance (investment potential, credit assessment, etc.)

B. Strengths

C. Weaknesses

D. Summary and Conclusions

IMPORTANT! Be sure to give credit to any source you use. While this is not an APA exercise, the rules for plagiarism definitely apply.

Michelle Fleming

Dell

1

Dell
American multinational computer technology corporation
Intense competitive environment
Many merges and acquisitions have given competitors advantages
Foreign competitors are penetrating free markets
Poor economic climate has only slightly negatively affected Dell
Government’s focus on electronic waste may affect Dell’s costs

Financial Source

3

Consolidated statement of financial position
Assets
Liabilities & Stockholders’ Equity

Financial Source

Short Term liquidity
HP Financial Source

Activity ratios
HP Financial Source

Financial Leverage
HP Financial Source

Profitability ratios
HP Financial Source

8

Market Ratios
HP Financial Source

9

Common-Sized income statement

Financial Source

10

Capital structure
Long-term borrowing cannot be used to finance operations indefinitely
Debt as a proportion of total assets and equity was relatively stable

Unpredictable average payment period
Increased long-term debt
Decreased debt ratio
Investors willing to pay more for Dell
Increased profitability ratios
Dell
Strengths
Weaknesses

Recommend to invest in dell
Increased Revenue
Assets covering debts
Favorable investment potential