FINANCIAL ANALYSIS- OPTIONAL INSTRUCTIONS
You want to choose a publicly traded company. (Note: Be sure to have your public company chosen by the end of Unit 1). Be sure that it is large enough so it contains a lot of easily found financial information.
You will write your Final Analysis paper that includes the following:
Executive Summary: Introduce your company and its current status.. How are they performing? Are they profitable? Are they gaining or losing market share? Have they introduced new products?, etc.
SWOT Analysis: Please include a comprehensive SWOT analysis about your chosen company. You should include 4-5 items under each heading (Strengths, Weaknesses, Threats, and Opportunities).
Recommendations & Justifications: You will use the Recommendations below (or make up some of your own) and justify whether the firm should go along with the recommendation.
Concluding thoughts: include what the potential is for your chosen company if they are able to execute your recommendations and the ramifications if they do not.
Your Unit 3- Assignment 2 will consist of completing the Executive Summary and SWOT Analysis. For your Unit 6- Assignment 2 you will complete the Recommendations & Justifications and Concluding thoughts.
As a financial consultant, what recommendations would you propose to current company management based on your findings? This added value content should include conclusions and recommendations for the firm going forward (as if you were a consultant for the firm). Adding value means having detailed conclusions and recommendations.
Having detailed RECOMMENDATIONS and being able to JUSTIFY them are VERY IMPORTANT!
Typical recommendations and conclusions that you will probably use include:
• Should the firm increase capital expenditures to increase competitiveness?
• Should the firm increase growth by acquiring other companies for synergies or grow internally?
• Should the firm risk increasing their leverage (debt) to increase earnings and return on capital or keep the leverage the same (or even decrease it?)
• Should the firm increase/decrease marketing spending?
• Should the firm increase/decrease R&D spending?
• How should they go about controlling costs including labor, health care, and pension liabilities? (GM and Ford need help in this department).
There are many more recommendations you can offer. (Note: feel free to add more recommendations or change some of the ones above that fit your chosen company. Note that you want a minimum of at least 6 recommendations.)
Feel free to be creative. If you make these recommendations, you want to list WHAT the recommendation is and JUSTIFY WHY the firm should embrace it (and how it benefits the firm). You are the chief financial consultant so you have full rein to make any recommendations.
Feel free to use reference and be sure to cite them (APA) format if you do. References are not required though as the paper could be written entirely in your own words.
I listed 6 common recommendations above and they are included in your Final Paper template. Feel free to use these and/or make up some of your own. The key is that you want to JUSTIFY any recommendation that you make.
For example, if you recommend that a company should increase their capital expenditures, then justify why. Common justifications could that they need to increase capital expenditure to support their R&D spending, to expand domestic operations, or to expand internationally. You want to support your recommendations with thorough justifications.
If you use references, then be sure to cite them using APA formatting.
The format of your paper could be to list each Recommendation and Justify each one like below:
Recommendation #1: Should the firm increase capital expenditures to increase competitiveness?
Justification: Yes because to remain competitive, they need to invest in technologies to keep up with their main competitors. They also plan to expand internationally, so investing into these new markets and the learning curve involve will involve spending at least ? billion dollars. etc, etc, etc.
Recommendation #2: Should the firm increase growth by acquiring other companies for synergies or grow internally?
Justification: I feel that my company should grow internally. Due to my industry, acquiring a competitor involves integrating a different culture into our firm.
Also, the companies are selling for such a high premium currently that it odes not justify buying our competitors. Finally, since our stock price is down currently and interest rates are high, it would be very expensive to borrow to finance the purchase. etc, etc, etc.