Part Two A: Numerical Analysis
Section A
Computations
In this second phase of the research project, you will provide the following information necessary
to begin your research. Use the Excel spreadsheet posted in the Content section of Blackboard
to input quarterly financial data for your chosen company. Quarter 4 should correspond to the
most recent yearend data for the company as is produced in the company’s 10K report. Using
the 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.
Part Two B: Analysis
Create your complete analysis report as a Word document by copying the relevant sections of
the Excel spreadsheet into the document. This report will include your ratio computations, a
financial trend comparison and an industry-performance comparative financial analysis.
Include a synopsis of the major ratios computed in Part Two-A as well as the following sections:
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. You do not have to address every single category, just enough
to determine the overall trend.
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
(or its closest competition for the most recent year. Many times it is not possible to find the
industry averages for several of the categories. Supplement this analysis by looking at the
results of the company’s closest competitor. You do not have to address every single category,
just enough to determine the overall situation.
Section D
Graphical Analysis
Describe the financial trend and comparative financial analysis graphically. Be creative here, a
picture is worth a thousand words! Under each chart write one sentence summarizing the
financial trend and comparative analysis from above.
Section E
Ethics
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). 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.
Part Three: Individual Report Conclusion and Decisions
Based on the analyses above, arrive at an investment conclusion by writing a paragraph for each
of the following three decisions. You must support your conclusions with reasoned logical
statements as to why or why not. Note, your decisions should reflect your own personal situation,
in other words you should “Know your client”, and in this case, you are the client.
Section F
Conclusions
Feel free to include a synopsis of a SWOT analysis here and should be individualized based on
your investment horizon. (SWOT: Strengths, Weaknesses, Opportunities, Threats).
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?
Section A
Computations
In this second phase of the research project, you will provide the following information necessary
to begin your research. Use the Excel spreadsheet posted in the Content section of Blackboard
to input quarterly financial data for your chosen company. Quarter 4 should correspond to the
most recent yearend data for the company as is produced in the company’s 10K report. Using
the 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.
Part Two B: Analysis
Create your complete analysis report as a Word document by copying the relevant sections of
the Excel spreadsheet into the document. This report will include your ratio computations, a
financial trend comparison and an industry-performance comparative financial analysis.
Include a synopsis of the major ratios computed in Part Two-A as well as the following sections:
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. You do not have to address every single category, just enough
to determine the overall trend.
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
(or its closest competition for the most recent year. Many times it is not possible to find the
industry averages for several of the categories. Supplement this analysis by looking at the
results of the company’s closest competitor. You do not have to address every single category,
just enough to determine the overall situation.
Section D
Graphical Analysis
Describe the financial trend and comparative financial analysis graphically. Be creative here, a
picture is worth a thousand words! Under each chart write one sentence summarizing the
financial trend and comparative analysis from above.
Section E
Ethics
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). 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.
Part Three: Individual Report Conclusion and Decisions
Based on the analyses above, arrive at an investment conclusion by writing a paragraph for each
of the following three decisions. You must support your conclusions with reasoned logical
statements as to why or why not. Note, your decisions should reflect your own personal situation,
in other words you should “Know your client”, and in this case, you are the client.
Section F
Conclusions
Feel free to include a synopsis of a SWOT analysis here and should be individualized based on
your investment horizon. (SWOT: Strengths, Weaknesses, Opportunities, Threats).
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?
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