The Research Project Assignment is worth 20%
of the course grade.
Due date is stated in the Class &
Assignment Schedule (End of Week 7).
THE PROJECT IS DESIGNED TO BE COMPLETED INDIVIDUALLY BY EACH STUDENT.
OBJECTIVE:
The specific objective of this graded written
research exercise is to prepare an “executive level financial report”
to a potential investor. This report will involve the financial evaluation of a
real, publicly-traded, company. It will require independent research (web-based
and library), careful financial analysis, and the proper application of key
financial theories and formulas.
The companies that may be
analyzed for this project are Yahoo (YHOO), IBM (IBM), Target (TGT), Oracle
(ORCL), or Deere (DE).
SITUATION
You are a financial analyst with a large
investment banking firm. Your work involves preparing financial research
reports and recommendations for clients of the firm. This project represents such a report.
YOUR
SPECIFIC ASSIGNMENT
Your specific assignment is to research,
analyze, and prepare a report for the clients on the actual financial
performance of THE COMPANY THAT IS TO BE ANALYZED FOR THIS PROJECT. 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)
A comprehensive review of THE COMPANY’S financial performance for the last 3
years. A DuPont analysis is also required. (See detailed description
below)
(2)
An evaluation of THE COMPANY’S stock performance for the last year.
(3)
Finally, a specific recommendation, with supporting rationale, as to whether or
not THE COMPANY’S recent trends in financial and stock performance are of
sufficient financial strength to warrant entering into a long-term investment
commitment.
To assist you in the task, the CFO has
provided the following general guidance.
It is very important to comparatively evaluate
THE COMPANY’S financial and stock performance trends against its Industry
and/or principal competitors.
You should include all necessary and
relevant financial performance and stock information, trends, and projections
in supporting your recommendation. This information may include, financial
ratio trends and industry comparisons, 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 and Statements of Cash
Flows for THE COMPANY the last three years.
— Annual reports, Form 10K Reports
–Industry norms
—Analysts’ reports on performance
— Management reports or press releases,
investor conference calls
Using this information students will develop the
evaluation of the financial performance for THE COMPANY. (85% of the
assignment grade)
1.
Required Subheading: Background Information
Background and Industry (one short paragraph).
2.
Required Subheading: Financial Performance Results
Select the most significant financial
performance results for the company: Compare Revenue, net income, cash flows, working
capital, total assets for the last three years and other results for the
company against the industry or main competitors. Present a table with this
information in the report. Write about 1 page of analysis for these financial performance results. (15% of the
project grade)
3.
Required Subheading: Financial Ratio Analysis
Evaluate financial ratios for the company (the
Mergent database available through the Library is a good source). Write about 1-2 pages of analysis of the ratio data. (15% of the project grade).
Compare the ratio results against the industry or main competitors.
4.
Required Subheading : Return on Equity
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. This involves taking the information from the
Income statements and the Balance sheets to calculate the company’s return on
equity using the DuPont formula. Show your calculations! Write about 1 page of analysis of the results that you prepared. Compare the
results to main competitors. If the management of the company would like to
improve its return on equity, what should the management do?
5.
Required Subheading: Other Financial Indicators
Evaluate other significant financial
performance indicators including: capital spending, stock growth, Beta values,
credit rating service valuations (if possible), bond rating valuations (if
possible), etc. Present an overall conclusion about the financial performance
of the company during the last 3 years based on these indicators. Compare the
results that you developed against the industry or main competitors.
Summarize the results in 1 page by
explaining the firm’s financial strengths and weaknesses?
(10% of the project grade).
6.
Required Subheading: Stock Performance
Collect and evaluate the data about stock
performance of the assigned company for the last year. Compare the results
against the industry or main competitors.
Write about 1-2 pages of analysis of
the results. (20% of the project grade).
7.
Required Subheading: Investment Recommendation
Develop a specific recommendation, with
supporting rationale, as to whether or not the assigned company’s recent trends
in financial and stock performance, and projected performance, are of
sufficient financial strength to warrant entering into a long-term investment commitment
(write about 1 page) (15% of the project grade)
PRESENTATION OF PAPER AND WRITING (15%) of the
project grade):
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).
The final report is to be an executive-level
financial report, directed to the client. The report should be about 6 – 8
double-spaced typewritten pages (not
counting the tables and graphs).
Essential research data, financial
calculations and other documentation that is necessary to support the
recommendation should be referred to in summary form in the report and included
in the report as attachments. All major references sources must be referenced.
The Individual Research Report must be posted
to the LEO Student Assignments. Attachments
are limited to a maximum two files in doc, docx., xls. xlsx., or rtf. formats.
OTHER FORMATS ARE NOT ACCEPTABLE and will not be reviewed and graded.
Pdf. files will not be accepted or graded.
All work must be Word processed. Handwritten
and scanned work will not be accepted and graded.
The report is an individual effort and must be
researched, developed and prepared by you.
*****************************************************
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.
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