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FIN3400 – Company Analysis Project #1
Overall Objective:
Students will research the financial fundamentals of a public company and its market equity
performance.
Company Analysis Project #1: Company Fundamental Analysis (Due week 6)
Outcomes:
Demonstrate effective communication in writing and orally.
Demonstrate the use of appropriate technology in problem solving and solution presentation.
Demonstrate a working knowledge of quantitative and qualitative reasoning and their role and
value in the practice or consideration of business.
4. Able to conduct basic fundamental analysis by applying principles and formulas to company’s
earnings, financial position, and cash flows.
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3.
Select a public company and obtain its most recent annual financial statements. You should be able to
download them from your company’s Website (it is usually contained in the Investor’s page). Yahoo
(www.finance.yahoo.com) also provides financial statements for most companies. However, please be
aware that Yahoo has a standardized format for all financials and it may be confusing. Morningstar
has abbreviated financial statements that can be helpful. I strongly recommend studying the financial
statements published for the company for they are relevant to their nature of operations and particular
financial activities. For the sake of completeness, choose a company that has long-term debt, pays
dividends, and, has been public for at least six years. The company’s annual report will provide you
with extensive information on the company’s operations, investments, and, financing activities.
Use report format with headings and subheadings. Cite and list all sources used in your research.
Please use APA report guidelines. Make sure that you have visuals exhibiting all formulas and
calculations. Tables and graphs are highly encouraged.
In your written report, provide the following information within a narrative style. Please use headings
and subheadings to guide the reading of your report. Be sure to include the topics below.
1. Company’s overview:
a. Company’s History. Highlight the main events (when and who founded it, when it became
public, mergers, acquisitions, and most recent events). How has the company changed over
the years in terms of its size, the type of products and services it offers, etc.?
b. Nature of the Operations. Briefly describe the products/services your company offers. Make
sure you highlight the main sources of revenue and its global market penetration (if any).
c. Corporate Citizenship. Briefly describe the company’s Code of Conduct/Ethics social
responsibility, and philanthropic programs. In your opinion, is the company’s code of ethics,
social responsibility and philanthropic programs extensive enough?
2. Financial Performance:
a. Earnings performance: Discuss the success of the company’s operations for the last two years
(2013 and 2014 or 2014 and 2015 if the information is available). Cite Sales growth rate, and
Profit Margin financial ratios to describe the company’s performance for the last two years.
Please provide relevant ratios in a table with the corresponding data.
b. Financial Position: Discuss the company’s financial position. Who are the main financial
stakeholders? For solvency use the Current Ratio, for asset management use the Total Asset
Turnover Ratio and for debt capacity use the debt/equity ratio. All ratios should be for the last
two years. Who are the company’s major stockholders?
c. Market Performance: Describe the company’s stock market performance for the last two years.
Obtain the closing price for the end of the year and calculate the Price/Earnings and Market
Value ratios and use these ratios in your narrative.
d. Analyze the Statement of Cash Flows for the most recent year. Where did the cash come from?
Where is the cash spent on?
3. Conclusions:
a. Each student writes his/her own conclusion. State your conclusion based on the research and
analysis provided in your report. Has this company performed successfully in the last few
years? Why? In which areas has the company done well? Which areas are deficient? In your
opinion, is the company’s code of ethics, social responsibility and philanthropic programs
extensive enough? Would you invest in this company? Why or Why not?
Recommended Sources:
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www.finance.yahoo.com
www.money.cnn.com
www.bloomberg.com
www.sec.gov
Company Website
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