Evaluation of Corporate Performance
The Final Paper will involve applying the concepts learned in class to an analysis of a company using data from its annual report. Using the concepts from this course, you will analyze the strengths and weaknesses of the company and write a report either recommending or not recommending purchase of the company stock.
For help with reading an annual report access this handy guide from Money Chimp.
The completed report should include:
-An introduction to the company, including background information.
-A complete and thorough financial statement review.
-Pro Forma financial statements (Balance Sheet and Income Statement) for the next fiscal year, assuming a 10 percent growth rate in sales and Cost of Goods Sold (COGS) for the next year.
-Complete ratio analysis for the last fiscal year using at least two ratios from each of the following categories:
- Liquidity
- Financial leverage
- Asset management
- Profitability
- Market value
- Debt
- Per-Share
- Measures of relative value (P/E, P/B)
- Activity
- Cash Flow
-A calculation of Return on Equity (ROE) using the DuPont system.
-Assessment of management performance by calculating Economic Value Added (EVA).
-A synopsis of your findings, including your recommendations and rationale for whether or not to purchase stock from this company.
-Evaluate the financial risks associated with operating internationally. If your chosen company does not operate internationally, evaluate what the financial risks could be if they were to expand internationally.