Financial Reporting and Analysis Assignment
Overview
The group project requires you to select a company (Mc Donald's Corporation) and write a financial analysis document encompassing five areas of analysis: (1) strategic analysis, (2) accounting analysis, (3) financial analysis, (4) forecasting, and (5) valuation. The course readings and case assignments explore each of these areas.
Project Section No. 1
- Chapter 1 in Palepu describes the nature of financial accounting and reporting, and how that information is used in business analysis. The chapter essentially describes the nature and content of this course.
- Evaluation of the financial statements of a company is, in many respects, an attempt to discern whether the enterprise is doing the right things the right way, doing the right things the wrong way, or doing the wrong things. It is not possible, therefore, to competently evaluate the financial statements of a company outside of the competitive context that gave rise to them. Thus, the first component of the group project is a strategic analysis of the company's markets and competition. Chapter 2 in Palepu provides a framework for that strategic analysis.
Project Section No. 2
- The next step in evaluating a company is to assess and, if necessary, recast the information in the financial statements. Chapter 3 provides an overview of this exercise and chapter 4 describes specific areas that may be interest to the analyst.
Project Section No. 3
- After we have gained an understanding of the company's strategic opportunities and challenges, and evaluated (and, if necessary, adjusted) the accounting principles employed in creating the financial reports, we need to find some benchmark against which to measure the company's performance. Financial-or ratio-analysis of the company's performance in comparison to that of its major competitors yields that measurement. Chapter 5 in Palepu provides a background and methods for conducting this analysis.
Project Section No. 4
- Chapter 6 in Palepu provides a basic framework for forecasting corporate performance using financial statements.
Project Section No. 5
- Chapters 7 and 8 in Palepu describe how to use forecasts to value corporate entities.
Criteria for Company Selection - In terms of company selection, you must abide by these five criteria:
1. At least $50 million of pre-tax earnings
2. Consistent earnings power and dividend history
3. Good returns on equity with limited or no debt
4. Management in place
5. Simple, non-techno-mumbo-jumbo business
My part of the project is only the financial analysis which is part 3. The company is mc Donald cooperation.
Attachment:- Assignment File.rar