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Final Project Requirements

Your financial analysis report will be driven by a rigorous ratio analysis, and aggressively supplemented with your written analysis, interpretation, and evaluation of the data.

Your research should be strategically driven by two probing questions:
-Would you invest your financial capital in the selected firm as a shareholder?
-Would you invest your human and intellectual capital in the firm as an employee?

Steps in preparation of financial analysis report:
  1. Select a publicly held company.
  2. Select a benchmark firm to compare your company against. The benchmark firm is typically the largest competitor.
  3. Obtain the firm’s balance sheet, income statement, and statement of cash flows for the past 5 years. Download or read the firm’s annual report.
  4. Go to: http://www.sec.gov/edgar/searchedgar/webusers.htm
    Research EDGAR’s database for additional SEC report filings: 8-k, 10-Q.
  5. The following table is the type of Excel or Word table that should be used to gather and report your ratio and financial performance data. Note the 5 financial diagnostic categories that should be used in your analysis.
    Use 2-3 ratios per diagnostic category. Place your ratio calculations in the table for your selected companies—primary company and benchmark competitor. Using 5 diagnostic categories, and 3 ratios to assess each category, results in 15 ratio measures per company that will be compared side by side.
  6. To validate your research, 5 years of data are required.
  7. Financial analysis report template follows.
Financial diagnostic categories Chosen company vs. Benchmark competitor
1.) Liquidity of short-term assets -Current ratio
-Cash ratio
-Quick ratio
-Current ratio
-Cash ratio
-Quick ratio
2.) Long-term debt-paying ability -Debt ratio
-Debt-equity ratio
-Times interest earned
-Debt ratio
-Debt-equity ratio
-Times interest earned
3.) Profitability -Net income/sales (profit margin)
-Net income/assets (ROA)
-Net income/shareholder equity (ROE)
-Net income/sales (profit margin)
-Net income/assets (ROA)
-Net income/shareholder equity (ROE)
4.) Asset utilization/ management efficiency -Total asset turnover
-Inventory turnover measures
-Accounts receivable turnover
-Total asset turnover
-Inventory turnover measures
-Accounts receivable turnover
5.) Market measures -Price/earnings ratio
-Earnings per common share
-Dividend payout
-Price/earnings ratio
-Earnings per common share
-Dividend payout
  • Financial Analysis Summary. Based on your research and ratio analyses and calculations, comment on the following questions:

-How well has management added value?
-Is the company`s financial performance improving?
-Would you invest your financial capital in the selected firm as a shareholder? Why or why not?
-Would you invest your human and intellectual capital in the firm as an employee? Why or why not?

Question Set #18

Views: 1136
Company Selected: Barnes and Noble
Word Count: 2451 words including References
File Format: Microsoft Word Document
Editable: Yes

Worksheets: 2 worksheet
File Format: Microsoft Excel Workbook
Editable: Yes
Attachment: Click here to download