Corporate Finance Research Project
Overview
After completing your CMBA degree, you will very likely be in a position to help increase the fundamental value of your company. All the courses of the CMBA have been designed to give you the financial tools and analytical skills required to be successful managers. In FIN 6406, a research project has been designed to help prepare you for this challenge in the workplace. In this application assignment, you will utilize aspects of what you have learned to produce a financial quarterly trend analysis of one company. This is a group project and one report per group is to be submitted.
For this two-phased research project, you will select a publicly traded company to investigate over the course of the following weeks. You may choose a company where you are currently employed, a company where you might seek employment, a company you've read about, or a company that piques your interest. For instance, you may research Starbucks (stock symbol SBUX) because you drink a latte every day, Toyota (TM) because you drive their cars or have been following the news, or Amazon (AMZN) because you are interested in their electronic reading experience, the Kindle.
You will select your company by the third week of the course. After you choose your company, you should submit it for approval. Only students who have made an incorrect choice will be notified. If you do not hear from your Academic Coach, assume that your company has been approved and proceed with your research. You will research sources, such as Yahoo! Finance and MSN Money, for the financial highlights and trading information on your selected company. Using these sites, you will compute the ratios for the four most recent quarters of your chosen company. An Excel template will be provided for you to compute these ratios.
In Week 6, you will complete the research project by submitting the final results in a formal report. Create your report as a Word document, which you will then attach. This report will include your ratio computations, a financial trend comparison, an industry-performance comparative financial analysis, and a comparative SWOT analysis. Most important, you will make decisions about what you as an investor have to lose or gain by investing in your selected company. You will also assume the role of a member of the Board of Directors of a bank that will consider whether to extend the company a line of credit. In this culminating activity, the knowledge you have gained and the skills you have practiced will be applied in a report similar to those you will eventually execute on a regular basis.
The Guidelines for this Research Project follow.
Part One: Company Selection
In this first phase of the research project, you will provide the following information necessary to begin your research:
1. The name of the publicly traded company you will investigate
2. A brief paragraph (25 - 50 words) describing why you chose that particular company
3. The three sources you will use to research the financial health of the company and its competitors
The three parts of the Company Selection assignment are described in detail below. A workspace is also provided so you can submit each part in this document.
1. Publicly Traded Company
You may choose a company where you are currently employed, a company where you might seek employment, a company you've read about, or a company that piques your interest. For instance, you may research Starbucks (stock symbol SBUX) because you drink a latte every day, Toyota (TM) because you drive this automobile or Amazon (AMZN) because you are interested in their electronic reading experience, the Kindle.
Type the name of the company you will research in the box below. Include the stock symbol for the company as in the examples above.
2. Reasons for selecting this company.
Write a brief paragraph (25 - 50 words) describing why you chose that particular company in the box below. The box will expand as you type.
3. Research Sources
List the three sources you will use to research the financial health of your selected company and its competitors. Look for sources of free data, such as Yahoo Finance and MSN Money for the financial highlights and trading information. You will be using the data from these sites to compute the ratios for the four most recent quarters of your chosen company, computations that you will include in your final project. List the sources in the box below.
Part Two: Ratio Analysis
In this second phase of the research project, you will provide the following information. Use the Excel spreadsheet posted in the Content section of Blackboard to input quarterly financial data for your chosen company. Produce a report which includes an analysis of the financial position of the company. Create your report as a Word document by copying the Excel spreadsheet into the document. This report will include your ratio computations, a financial trend comparison and an industry-performance comparative financial analysis.
Section A - Computations
Using the following Excel template, compute the ratios for the four most recent quarters of your chosen company. Sources of free data include Yahoo Finance and MSN Money. Research at least three Web sites to obtain the most accurate and reliable information. By using at least three sources, you will be able to select the financial information from two of the sources with the most closely corresponding information.
Section B - Financial Trend Comparison
For each of the five ratio categories: Liquidity, Asset Utilization, Profitability, Debt Utilization, and Market Values, write a paragraph regarding the trend and implications about the future financial health of the company.
Section C - Comparative Financial Analysis of the company compared to the industry performance.
Write a paragraph regarding your company's comparative performance to the industry average for the most recent year.
Section D - Complete a Comparative SWOT ANALYSIS for your company:
- Strengths
- Weaknesses
- Opportunities
- Threats
Section E - Business ethics, as defined by Corporate Finance (2009) text authors' Ehrhardt and Brigham, "are a company's attitude and conduct toward its employees, customers, community, and stockholders" (p.7). In this section, provide an analysis of the ethics of your company that answers the following questions:
- Is there a well defined code of ethics or code of conduct?
- Is there evidence of continued and repeated emphasis by the Board of Directors or the CEO, of the importance of ethical conduct to the corporation and its business ventures?
- What processes are in place (if any) that make it safe and easy for employees or other interested parties to report ethical lapse?
Include documentation from your research that supports your analysis of the ethics of your company.
Section F - Conclusion and Decisions
Based on the analyses above, arrive at a conclusion by writing a paragraph for each of the following three decisions. You must support your conclusions with reasoned statements as to why or why not.
Decisions
1. Would you place a personal deposit of one million dollars or more in the publicly traded stock of this company?
2. Would you invest $500,000 in the debt (bonds) of this company?
3. If you were a member of the Board of Directors of a bank and you sat on that Bank's Credit Committee, would you grant a one million dollar line of credit for Overnight or Term Federal Funds to this company?
Attachment:- Assignment Files.rar