Project #97165 - Finance Paper

THE COMPANY IS IBM

---- FINANCIAL RESEARCH PROJECT -------

 SITUATION:

OBJECTIVE

The specific objective of this graded written research exercise is to prepare an "executive level financial report" to the Chief Financial Officer (CFO) of a mythical company in which you are employed as a financial analyst.  This report will pertain to the financial evaluation of a real, publicly-traded, company. It will require independent research (web-based or library), careful financial analysis, and the proper application of key financial theories and formulas.

The company that is to be analyzed for this project is (company selected by instructor).

Alternatively, you can request me to approve another publicly traded company. This request must be submitted before the end of the first week of the course. The request must include

identification of the company by ticker symbol and name

b. a reasonable and appropriate explanation of why you want to examine the alternative company

c. the source of the analyst's report that will be used in the analysis (which must be submitted to me)

d.  acknowledgement by you that all of the specific elements of the assignment (see below) will be prepared by you and included in the final research project report

 

SITUATION

You are a financial analyst with the mythical High Technology Corporation ("HTC"). HTC is an established manufacturer of a line of electronic components, which services an international market. HTC is currently a new fully-integrated wireless communication service for world-wide use.  A competitive technical and economic product evaluation has determined that THE COMPANY THAT IS TO BE ANALYZED FOR THIS PROJECT (COMPANY SELECTED BY INSTRUCTOR) (a real publicly-traded company) is the best potential candidate for a long-term commitment.  THE COMPANY (COMPANY SELECTED BY INSTRUCTOR) is offering a competitively favorable deal.  However, based on some serious general concerns about the fallout of companies in the industry in general, the CEO has asked your CFO to conduct a financial analysis of THE COMPANY (COMPANY SELECTED BY INSTRUCTOR) to determine if it is prudent to commit to this company's communication system.  The cost of cutting over to the new communications system is significant and any interruption in support during the next few years would adversely affect HTC's performance and profit. Specifically, the question is: will THE COMPANY be financially viable over the next two to three years?

 

YOUR SPECIFIC ASSIGNMENT

Your specific assignment is to research, analyze, and prepare a report for the CFO on the actual financial performance of THE COMPANY THAT IS TO BE ANALYZED FOR THIS PROJECT (COMPANY SELECTED BY INSTRUCTOR).  In addition to reviewing the traditional financial performance indicators, you are also to review THE COMPANY’S past and current stock performance. Your report includes three parts:

(1) An evaluation of THE COMPANY’S financial performance for the last year. DuPont analysis and analysis of significant financial performance results are required for the last three years. (See detailed description below) 

(2)An evaluation of THE COMPANY’S stock performance for the last one year.

(3)  Finally, a specific recommendation, with supporting rationale, as to whether or not THE COMPANY’S recent trend in financial and stock performance is of sufficient financial strength to warrant entering into a long-term commitment.

To assist you in your task, the CFO has provided the following general guidance. Since it is recognized that the industry is undergoing a major contraction, it is very important to comparatively evaluate THE COMPANY’S financial and stock performance trends against its Industry.

You may wish to include all necessary and relevant financial performance and stock information, trends, and projections in supporting your recommendation. These factors may include, financial ratio trends and industry comparatives, capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations, and management and investment reports - when these documents are available.

REPORT REQUIREMENTS

YOUR SPECIFIC ASSIGNMENT

Research and analyze the following information for THE COMPANY (SELECTED BY INSTRUCTOR).

--Annual Balance Sheets for THE COMPANY for the last three years.

--The Income Statements for THE COMPANY the last three years.

-- Annual reports, 10K or 10Q------

 --Industry norms -----------

---Analysts’ reports on performance

-- Management reports or press releases 

Using this information the students have to develop evaluation of the financial performance for THE COMPANY (SELECTED BY INSTRUCTOR). (Totally 85% of the assignment grade) 

-1—Background and Industry (one short paragraph). 

-2—Select of most significant financial performance results for the company: Compare Revenue, net income, working capital, total assets for the last three years and other results of your choice of the company against the industry or main competitor. Present the table with this information in your report. Write about 1 page of the analysis of these financial performance results. (15% of the project grade)

-3—Find financial ratios for the company and its major competitor in the Internet. Write about 1-2 pages of analysis of the ratio results you received. (15% of the project grade). Compare the ratio results against the industry or main competitor.

-4- Evaluate Return on Equity for the company for the last three years using the DuPont analysis. (10% of the project grade). Compare the company’s results to a major competitor.

Taking the information from the Income statements and the Balance sheets, calculate the company’s return on equity using the DuPont technique for the company for three years. Show your calculation!

Write about 1 page of analysis of the results that you received. Compare the results to main competitor. If the management of the company would like to improve their return on equity, what should the management of these companies do? 

-5- Evaluate other areas of financial analysis: capital spending, stock growth, Beta values, credit rating service valuations (if possible), bond rating valuations (if possible), etc. Make an overall conclusion about financial performance of the company during the last years. Compare the results that you received against the industry or main competitor.  Summarize the results that you received in 1 page. What are the firm’s financial strengths and weaknesses? (10% of the project grade)

-6- Collect and evaluate the data about stock performance of the assigned company's for the last one year. Compare the results that you received against the industry or main competitor.

Write about 1-2 pages of analysis of the ratio results you received. (20% of the project grade).

-7- Develop a specific recommendation, with supporting rationale, as to whether or not the assigned company's recent trend in financial and stock performance is of sufficient financial strength to warrant entering into a long-term commitment (about 1 page) (15% of the project grade)

 

PRESENTATION OF PAPER AND WRITING 

-Organization, Format and Presentation of Paper including the Title page, Introduction, Body, and Summary (4% of the project grade)

Use of Tables, Figures and Other Graphics to Summarize and Support Analysis Presented in the Paper (3% of the project grade)

Logical and Smooth Flowing Transitions and Relationships Among Sections of the Written Report (3% of the project grade)

Research Sources and Significance of Research Information and Data, Use of APA Citation Methodology (5% of the project grade)

Your final report is to be an executive-level financial report, directed to the CFO. This report should be about 8 double-spaced typewritten pages (without tables and graphs). Include suitable comparative, quantitative and qualitative analyses and conclude with a specific and supported recommendation on the projected financial viability of THE COMPANY THAT IS TO BE ANALYZED FOR THIS PROJECT (COMPANY SELECTED BY INSTRUCTOR) for the next several years.

Essential research data, financial calculations and other documentation as necessary to support your recommendation should be referred to in summary form in your report and attached in detail as enclosures.  All major sources should be referenced.  There is no set limit to the size of the enclosures, but it is recommended that only essential enclosures be attached. You should use references and bibliography to identify any remaining supporting documents you wish to include.

The Individual Research Report must be posted to the D2L Student Assignments as a Attachments are limited to a maximum two files in doc, docx., xls. xlsx., or rtf. formats. OTHER FORMATS ARE NOT ACCEPTABLE, will not be reviewed and graded.

If these formats are not available, use the following option:

File - Save As – in the bottom of the window for saving file you see “save as typeâ€Â – choose type Rich Text Format for doc. file, and previous option of Excel for Excel file. 

 Pdf. files will not be accepted and graded.

All works must be Word processed. Handwritten and scanned work will not be accepted and graded.

This report is an individual effort and must be researched, developed and prepared by you.  All questions related to this assignment, should be referred to the mythical CFO (i.e., your instructor).   

All works must be Word processed. Handwritten and scanned work will not be accepted and graded.

This report is an individual effort and must be researched, developed and prepared by you.  All questions related to this assignment, should be referred to the mythical CFO (i.e., your instructor). 

*****************************************************

Evaluation Rubric for the Research Project.

An evaluation rubric is available for the research project. The evaluation rubric outlines the specific requirements and elements of the project. It is suggested that the rubric be used as a guideline for the content, preparation, and completion of the project.

The rubric will be used for the evaluation and grading of the final research project.

 

1. Financial statements analysis of the assigned company  (15%)

Virtually no effort to develop financial statements analysis of the assigned company; not worthy of credit.

Only  a superficial effort to develop financial statements analysis of the assigned company

The project contains some financial statements analysis of the assigned company, but should be considerably more developed

Good effort is made to develop financial statements analysis of the assigned company

Excellent and very thorough development and articulation of financial statements analysis of the assigned company

2. Financial ratio trend analysis of the assigned company and industry comparatives. (15%)

Virtually no effort to develop financial ratio trends analysis of the assigned company and industry comparatives;  not worthy of credit

Minimal effort to develop financial ratio trends analysis of the assigned company and industry comparatives.

Some effort made to develop financial ratio trends analysis of the assigned company and industry comparatives, however the result are not explained and analyzed.

Good effort to develop financial ratio trends analysis of the assigned company and industry comparatives, the result are well explained and analyzed

Excellent and successful effort to implement financial ratio trends analysis of the assigned company and industry comparatives; very clear linkages between financial retio results and  investment decisions and recommendations;

3. DuPont analysis of the assigned company. Compare with main competitor. (10%)

Virtually no effort to develop DuPont analysis of the assigned company  not worthy of credit

Minimal effort to develop DuPont analysis of the assigned company.

Some effort made to develop DuPont analysis of the assigned company, however the result are not explained and analyzed.

Good effort to develop DuPont analysis of the assigned company, the result are well explained and analyzed

Excellent and successful effort to implement DuPont analysis of the assigned company very clear linkages between DuPont analysis and  investment decisions and recommendations;

4. Other areas of financial analysis: capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations, etc. (10%)

 Virtually no effort to develop the analysis of the other areas of financial analysis: capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations; unworthy of much credit

Minimal effort to develop  analysis of the areas of financial analysis: capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations

Some effort made to analyze other areas of financial analysis: capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations but gaps are obvious

Very good effort to  analyze other areas of financial performance: capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations

Outstanding effort to to  analyze other areas of financial analysis: capital spending, stock growth, Beta values, credit rating service valuations, bond rating valuations

5. The evaluation of the assigned company's stock performance for the last year. (20%)

No effort to develop the  evaluation of the assigned company's stock performance for the last year.

Some effort made to develop evaluation of the assigned company's stock performance for the last year, but analysis is very short and limited

Good effort made to develop the evaluation of the assigned company's stock performance for the last year,  however the result are not explained and analyzed.

Good effort made to develop  the evaluation of the assigned company's stock performance for the last year, the result are well explained and analyzed

Excellent and accurate  evaluation of the assigned company's stock performance for the last year; very clear linkages between stock performance results and  investment decisions and recommendations;

6.        The student developed specific recommendation, with supporting rationale, as to whether or not the assigned company's recent trend in financial and stock performance is of sufficient financial strength to warrant entering into a long-term commitment. (15%)

Little or no effort to explain linkages between the assigned company's  financial and stock performance  to warrant entering into a long-term commitment

Some effort made to explain relationships of the assigned company's  financial and stock performance to warrant entering into a long-term commitment, the analysis is poor and incomplete.

Some effort made to explain relationships the assigned company's  financial and stock performance to warrant entering into a long-term commitment, but there are significant gaps in the analysis

Very good effort made to explain relationships the assigned company's recent trend in financial and stock performance to recommend entering into a long-term commitment.  There are no significant gaps in the analysis

Outstanding and very thorough effort to explain relationships the assigned company's recent trend in financial and stock performance. The results are sufficient to warrant entering into a long-term commitment.

PRESENTATION OF PAPER AND WRITING

 

 

 

 

7. Organization, Format and Presentation of Paper including Introduction, Body, and Summary (4%)

There appears to be no logical organization of the paper's contents

Presentation has numerous blemishes and there may be a general lack of organization

Paper has some blemishes in presentation and may have some weaknesses in organization

Paper is neatly presented without major blemishes and is generally well-organized

Paper is extremely neat and has no blemishes; its organization is outstanding and very easily followed

8. Use of Tables, Figures and Other Graphics to Summarize and Support Analysis Presented in the Paper (3%)

Use of tables, figures and other graphics in support of paper is unworthy of credit

Tables, figures and other graphics do not provide much support for the paper; they may have inadequate labels; and numbering sequence is inadequate

Tables, figures and other graphics provide marginal support for the paper; some labels may be incomplete; there may be some problems with the numbering sequence

Tables, figures and other graphics are descriptive and provide solid support for the paper; they are properly labeled and numbered

Tables, figures and other graphics are very descriptive and provide exceptionally strong support for the paper; there are no errors in labels or in the numbering sequence

9. Logical and Smooth Flowing Transitions and Relationships Among Sections of the Written Report (3%)

No effort made to provide appropriate transitions

Paper makes minimal use of transitions

Some transitions used in paper

Good transitions used in most sections

Very effective transitions are used throughout the written analysis

RESEARCH APPROACH AND USE OF APPROPRIATE PROFESSIONAL SOURCES OF INFORMATION AND DATA

 

10. Research Sources and Significance of Research Information and Data, Use of APA Citation Methodology, use of double spaced, with one-inch margins, and use 12-point Times New Roman font. (5%)

No obvious effort to use professional and supporting research sources

Little effort made to use appropriate professional and supporting research sources which may be accompanied by inadequate documentation

Some effort to identify and use appropriate and professional and supporting research sources with some documentation

Good effort to identify and use appropriate and professional and supporting research sources; appropriate and professional use of APA documentation, use of double spaced, with one-inch margins, and use 12-point Times New Roman font.

Excellent and successful effort to identify and use appropriate and professional research sources including Library Search Engines, Websites, S&P, SEC, stock exchanges, Morningstar, NYSE, Competitors, 10K Report, analyst reports, news releases, articles, etc.; appropriate and accurate documentation

 

Subject Business
Due By (Pacific Time) 12/06/2015 05:00 pm
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