My companies are Amazon and Netflix
Throughout this course, you will prepare a comprehensive financial analysis and proposal (excluding tables, figures, and addenda) that will demonstrate your understanding of key financial concepts, strategies, and practices. After selecting a company to profile, you will construct a comparative financial analysis of your selected company's financial position with that of a prime competitor, for example, Amazon and Netflix, Microsoft and Oracle, or Bank of America and JPMorgan Chase & Co. Following the nine-step assessment process detailed in Assessing a Company's Future Financial Health, your financial analysis and proposal will be composed of four separate component assignments in Topics 2, 4, 6, and 8.
Financial Analysis and Proposal Assignment: Overall
In this topic, you will select a publicly-traded company and a chief competitor and submit both names to the instructor for approval by the end of the topic. Note: You will need to have this step finalized before you can complete the assignment detailed below, so it is in your best interest to select and obtain approval as soon as possible.
In your selection process, consider only a company and competitor that are both publicly-traded and which enjoy extensive analytical coverage to ensure access to sufficient financial data to complete this four-part assignment successfully.
As you develop your analysis, research the market at each step for relevant data on your chosen company/competitor, including financial reports and market information. Disclose all assumptions you set forth (e.g., revenue growth projections, expense controls) and provide supporting rationale and quantifiable evidence behind those assumptions. As your financial analysis and proposal develops over the span of the course, you will synthesize the analytical and research data and outcomes of the nine-step assessment process in order to assess 1) the long-term financial health of the chosen company, and 2) the suitability in recommending the company (versus the competitor) as a long-term investment opportunity.
Financial Analysis and Proposal Component 1: Analysis of the Fundamentals
For this assignment, apply the first two steps of the nine-step assessment process detailed in Assessing a Company's Future Financial Health (i.e., Step 1: Strategy and Step 2: Revenue Outlook) to compose a comprehensive overview of the company/competitor pairing you've selected and which has been approved by your course instructor. Use the "Analysis of the Fundamentals" resource provided in the topic materials to present your findings as per below:
1. Using the most recent U.S. Securities and Exchange Commission (SEC) 10-K reports for your company and chosen competitor, provide a brief yet succinct comparative analysis for a) the business overall, b) products and services, c) customers, d) goals, e) strategies, f) market positions, g) general risk factors, h) quantitative and qualitative market risk factors, i) competitors, j) competitive technology, k) regulatory considerations, and l) operating characteristics. Use the "Analysis of the Fundamentals" resource provided in the topic materials to present your findings.
2. Download most recent annual financial statements for your company and chosen competitor (i.e., balance sheets, income statements, and statement of cash flows). Perform a ratio analysis on the current financial reports, interpret the results, and provide a brief discussion regarding the overall revenue outlook. To successfully complete this assignment, please show all ratio analysis calculations.
Note: You will be required to re-submit this assignment, revised to incorporate all instructor feedback, along with the other three component assignments as one comprehensive submission in Topic 8. To save time later in the course, consider addressing any feedback soon after this assignment has been graded and returned to you.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
Part 2
For this assignment, apply the following two steps of the nine-step assessment process detailed in Assessing a Company's Future Financial Health(i.e., Step 3: Investments in Assets and Step 4: Economic Performance)to compose further assessment of the company/competitor pairing analysis as below:
1. Review the Management's Discussion and Review (MDR), aka the Management's Discussion and Analysis (MDA) section, which can be obtained from the SEC 10-K reports. Develop pro-forma financial statements for your company/competitor for the next 5 years. Pro-forma financial statements require us to make conservative assumptions about future growth; as such, your discussion must justify and support any assumptions you have made in developing the pro-formas.
2. Discuss current strategy (ies) used by the company/competitor and any relevant future investments required to support the business unit (s) strategy(ies) to achieve higher ROI and market position.
3. Perform a ratio analysis on the two pro-forma financial statements you've developed (company and competitor), and provide a discussion regarding future profitability and competitive performance as well as any significant changes you observe. To successfully complete this assignment, please show all ratio analysis calculations.
Note: You will be required to re-submit this assignment, revised to incorporate all instructor feedback, along with the other three component assignments as one comprehensive submission in Topic 8. To save time later in the course, consider addressing any feedback soon after this assignment has been graded and returned to you.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
Part 3
Throughout this course, you have researched a wealth of data and analytics to construct a comprehensive financial analysis and proposal (excluding tables, figures, and addenda) of a chosen company following the nine-step assessment process detailed in Assessing a Company's Future Financial Health.
There are three parts to the final component assignment of the Benchmark - Financial Analysis and Proposal.
Part I
Apply the final two steps of the nine-step assessment process detailed in Assessing A Company's Future Financial Health (i.e., Step 8: Stress Testing and Step 9: Financing and Operating Plan for Current Year) to compose further assessment of the company/competitor pairing analysis as below:
1. Perform stress testing under scenarios of likely adversity and value your firm using appropriate valuation techniques on the pro forma financial data analysis you constructed earlier in the course.
2. Compare your results from step #1 against the current stock price of your chosen company and competitor. Construct an argument in favor of investing in either the chosen company, or the competitor, with sufficient supportive detail and/or data to make your case.
Part II
Access the three prior component assignments, with instructor feedback incorporated, that you submitted in Topics 2, 4, and 6. Integrate these three assignments into the final Benchmark - Financial Analysis and Proposal submission along with the Component 4 assignment in this topic (Part One) to provide a comprehensive analysis inclusive of all nine steps that flows from start to finish. Note: You may need to re-write certain sections or statements in order to provide a cohesive flow to your submission. Assume this is a real-world proposal you will be presenting and revise or "polish" your work accordingly.
Part III
Develop a 250-word "introduction" to your analysis and proposal that can serve as an overview in the event that you do present this to a single or group of potential investors. Consider factors that might impede an individual's ability to focus on the information, and present only key and other potentially relevant points this individual or group needs to know.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.