MULTI-MODULE COMPREHENSIVE PROBLEM ASSIGNMENT
Background:
The purpose of this comprehensive project is to use a variety of resources to research a corporation. You will also prepare a written paper describing your corporation and summarizing the findings you have developed in the first three parts of the project.
Instructions: First choose a company to research. The company must be publicly traded, not the company where you currently work. Your selection may be a competitor of the company you currently work for, a company related to a hobby of yours, a possible stock investment, or simply sound interesting. Each student will select a different company; however companies may be within the same industry.
Required Part I - Module Five
A. Research and then describe your company's primary business activities. Include:
1. A brief historical summary,
2. A list of competitors,
3. The company's position within the industry,
4. Recent developments within the company/industry,
5. Future direction, and
6. Other items of significance to your corporation.
B. Include information from a variety of resources. For example:
1. Consult the Form 10-K filed with the SEC.
2. Review the Annual Report and especially the Letter to Shareholders
3. Explore the corporate website.
4. Select at least two significant news items from recent business periodicals
C. Submit a written report that is 2-4 pages long. The report should be well written with introductory and concluding paragraphs. References must be appropriately cited. Be sure to address all of the points in Section A above, using all of the resources listed in Section B.
Format: Double-spaced, one-inch margins, using a 12-point Times New Roman font. Include a complete bibliography.
Required Part II - Module Six:
The purpose of the second part of the comprehensive project is to compute financial statement ratios. A. Based on formulas given in Appendix B, compute the following ratios in Excel for two years.
1. Debt ratio
2. Gross profit margin
3. Free cash flow
4. Times interest earned
5. Accounts receivable turnover
6. Inventory turnover
C. Prepare a DuPont Analysis of ROE for two years, including computations of
1. Return on Sales
2. Asset Turnover
3. Return on Assets
4. Financial Leverage
5. Return on Equity
D. Briefly evaluate the ratio trends. Indicate on your worksheet whether each ratio is:
1. stronger / weaker
2. quicker /slower
3. more / less liquid
4. more / less risk
E. Submit a report. Write a 2-4 page report evaluating trends in all of the above ratios. Discuss whether your company's profitability, efficiency, liquidity, and solvency are improving or deteriorating.
Format: Double-spaced, one-inch margins, using a 12-point Times New Roman font.
Required Part III - Module Seven:
The purpose of the third part of the comprehensive project is to use resources available to obtain industry averages for commonly used ratios. Additionally you will compare company ratio results to industry averages.
A. Obtain the four-digit primary SIC (Standard Industrial Classification) Code and industry title for your company. Record the primary SIC code and industry title at the top of the Ratio Analysis Worksheet.
B. Obtain industry averages for commonly used ratios in the current period. Industry average information is reported by industry title or SIC code.
C. Look up the following industry-average ratios:
1. Current ratio
2. Debt ratio
3. Gross profit margin
4. Times interest earned
5. Accounts receivable turnover
6. Inventory turnover
7. Return on Sales
8. Asset Turnover
9. Return on Assets
10. Financial Leverage
11. Return on Equity
Note that some industry averages may
not apply to your company.
D. Submit a report. Write a 2-4 page report comparing the above ratios to industry averages. Discuss whether your company's profitability, efficiency, liquidity, and solvency are better than, or worse then, its peers.
Format: Double-spaced, one-inch margins, using a 12-point Times New Roman font.
Required Part IV - Module Eight:
A. Prepare a well-written titled "Would You Advise a Friend to Invest in This Company?" based upon your research and analysis of this company's financial information. Identify 3-5 significant points that justify your conclusion. Support your points with a comprehensive explanation incorporating sound reasoning.
B. Submit a report that is 4-5 pages long. The report should be well written with introductory and concluding paragraphs. References must be appropriately cited.
Format: Double-spaced, one-inch margins, using a 12-point Times New Roman font.