Corporate Finance Final

Week 5 – Final Project

 

Corporate Performance Report

 

In the business world, it is imperative that each person be able to  determine and make recommendations regarding the viability of any  purchase, as well as justify the claims made to upper management.  Whether the purchase is equipment, stock, or another company, the same  techniques and skills are called into play.

The Corporate Performance Report will require you to apply pertinent  business concepts to the analysis of a chosen company using data from  the company’s annual report as well as other sources. Using different  business concepts and real-world techniques, you will analyze the  strengths and weaknesses of the company and write a report for upper  management either recommending or not recommending purchase of the  company stock. Just as you would in any business situation, you will be  required to revise and improve the pieces of your report as you progress  and your final product will be something that could be used in the real  business world.

The completed report must include the following sections and content.

Executive Summary (Completed in Week Five)**

  • Create an Executive Summary for your report that can be used as the  first page of the final product to provide general information for upper  management
    • Provide a synopsis of your findings, including your recommendations  and a rationale for whether or not to purchase stock from this company.

Introduction to and Background on the Company (Completed in Week One)**

  • Analyze your chosen company’s current business and financial  conditions and create a brief introduction to your company that includes  the following.
    • The mission of the company
    • A descriptions of the company’s current business operation, competitors, financial condition
    • General information that explains why the company interesting to you as an analyst.

Financial Statement Review (Completed in Week Two)**

  • Evaluate the financial performance of your company by creating a complete financial statement review.
    • Review all three accounting statements and compare each of these statements to previous statements for the past three years.
    • Describe any positive or negative trends that emerge from the  accounting statement data and comparisons, providing a detailed  explanation of the factors that lead to these trends.
    • Assess potential weaknesses in the financial statements for your company.

Market Summary and Value Calculation (Completed in Week Four)**

  • Summarize how your company compares to the overall market based on researched competitive market data.
  • Summarize what 3-5 market analysts are currently saying about the company.
  • Calculate the value of the company’s financial assets by completing  ratio analyses for the company for the last three fiscal years within  the following bulleted categories. Provide a rationale as to whether  each ratio is favorable or signals potential trouble for the company  justifying your observations with evidence from the data and your  findings.

(Note: Your report must include a minimum  of 2 ratios from each bulleted category, with a minimum of 10 total  analyses. The greater the number of relevant ratio analyses you can  provide, the stronger your business case will be to either purchase or  not purchase the stock.)

  • Categories for ratio analysis
    • Liquidity
    • Financial leverage
    • Asset management
    • Profitability
    • Market value

Financial Returns and Capital Constraints (Completed in Week Three)**

  • Formulate the expected financial returns and associated risks by completing the following calculations.
    • Calculate the Return on Equity (ROE) using the DuPont system.
    • Calculate the Constant Growth Stock Valuation (CGSV) and compare it to the current stock price.
  • Research your company’s industry and evaluate what type(s) of  capital constraints your company must consider in order to be  competitive in the market. Explain the appropriate financial techniques  that would be used in this evaluation.
  • The Corporate Performance Report 
  • Must be eight to ten double-spaced pages in length (not including title  and references pages) and formatted according to APA style
  • Must include a separate title page with the following:
  • Title of paper
  • Student’s name
  • Course name and number
  • Instructor’s name
  • Date submitted
  • Must use at least five scholarly and/or industry sources.
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