FINA 408 Individual Final Company Analysis Project
The most recent data should be used in your analyses (i.e., data from the most recently-filed Form 10-K, proxy statement, etc.). Cite any sources used other than the company’s SEC filings. The following is an outline for the first two sections of your individual project:
Governance and Communication Analysis
Answer and discuss the importance of the following:
Who is the company’s current CEO? Is he or she also the Chair of the Board?
Who serves on the board’s Audit Committee? How many members are Financial Experts? What experience qualifies them for that designation?
What was the CEO paid last year? What portion of his or her total pay was in the form of bonus? In the form of stock-based awards? What performance measures were used to determine the CEO’s pay?
Who or what entity holds the highest percentage of the company's stock? Are most of the beneficial owners reported individuals or institutions?
How many common shares are outstanding? Is there more than one class of common stock outstanding? If so how many votes do each share of each class get?
Listen to a recording of an analyst call (AKA earnings call or quarterly conference call) for your company. Listen to about 15-20 minutes of the call and summarize your observations, including any questions that you might have wanted to ask the CEO/CFO, etc.
Industry and Strategy Analysis
Porter’s Five Forces
Rivalry among existing firms
Threat of new entrants
Threat of substitutes
Value Chain Analysis
Industry Value Chain
Focus of your company
Company Strategy Analysis
Is your company following a Low Cost Leader or a Product/Service Differentiation Strategy?
How should this impact their financials?
Accounting and Financial Analysis
Recasted Income Statement (3 years)
Recasted Balance Sheet (3 years)
Common Size Income Statement (3 years)
DuPont Analysis (1 year)
Profitability Analysis Ratios (3 years)
Return on Assets (ROA)
Return on Equity (ROE)
Gross profit margin
Accounts Receivable Turnover and Days’ Receivable
Inventory Turnover and Days’ Inventory
Accounts Payable Turnover and Days’ Payable
Non-Financial Risk Analysis
Review the Risk Factors section of the company’s most recent 10-K and discuss the three factors mentioned which, in your opinion, may have the most significant impact on the future of the company
Financial Risk Ratios (3 years)
Interest coverage ratio
Sustainable Growth Rate
Calculate the company’s dividend payout ratio (if applicable and Sustainable Growth Rate)
Weighted Average Cost of Capital (from FINA 300)
Use the CAPM to compute the required rate of return on equity capital for the company.
Determine the cost of debt (if any) and the cost of preferred stock (if any)
Compute the weighted average cost of capital for the company as of the start of the next fiscal year.
Forecasted Income Statements
Calculate projected net income for the company for the next five years based on forecasted income statements.
Explain the process and assumptions used to make the forecasts for each line item of the forecasted income statements.
|Due By (Pacific Time)||05/10/2015 12:00 am|
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