Paper Assignment: Evaluation of Corporate Performance
The 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 recommending whether or not to purchase the company stock.
The completed report should include:
• An introduction to the company, including background information.
• A financial statement review.
• Pro Forma financial statements (Balance Sheet and Income Statement) for the next two fiscal years, assuming a 10% growth rate in sales and Cost of Goods Sold (COGS) for each of the next two years.
• A ratio analysis for the last fiscal year using at least two ratios from each of the following categories:
o Liquidity
o Financial leverage
o Asset management
o Profitability
o Market value
• Calculate Return on Equity (ROE) using the DuPont system.
• Assess management performance by calculating Economic Value Added (EVA).
• Evaluate the soundness of the company's financial policies (e.g. capital structure, debt, leverage, dividend policy, etc.) based on the material covered during class.
• A synopsis of your findings, including your recommendations and rationale for whether or not to purchase stock from this company.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.