Using Bloomberg/Yahoo Finance/ Mergent or the companyâs website, collect the following information on the assigned company:
PART A- COMPANY INFORMATION
Company name
Business description
Industry and major competitors
Key management personnel – Chief Executive Officer (CEO), Chief Financial Officer (CFO), Chief Operating Officer (COO), Vice Presidents of Marketing, Get research paper samples and course-specific study resources under homework for you course hero writing service – Manage ment, Accounting, etc.
Company standard industrial classification (SIC) code, major products/services and markets and key industry trends and performance statistics.
Company stock symbol, stock exchange where the stock is traded, and company ownership (key investors and shareholders).
Stock Exchange where the stock is traded.
The companyâs annual financial statements, which include the income statement, balance sheet, and statements of cash flows for each of the last five (5) fiscal years (use year-end data). Provide the detailed income statement, balance sheet, and statement of cash flows (not summary reports).
Financial ratios for the company for each of the last five (5) fiscal years (use year-end data).
Financial ratios forthe industry (industry ratio information can be found using the internet, Value Line, etc.).
PART B – Based upon the data collected in section A, complete the following
1. A description of the company defining its main and secondary lines of business, key management, stock symbol, and SIC Code.
2. Using income statements and balance sheets for the firm, analyze the firmâs financial performance over the last three years. The write-up should include information on changes in sales revenue, and income, and highlight any performance trends. The write-up should also include information on the firmâs balance sheet, including any significant changes in the firmâs asset composition, or capital structure (debt/equity composition) and the reasons for the changes. Trend, common size, and percent change analysis are all useful tools in your analysis of the financial performance of the company.
3. Analyze the firmâs statement of cash flows for the most recent period and compare the firmâs cash flow performance to the prior two periods.
4. Using ratios collected, perform a ratio analysis of the firm and its industry. The ratio analysis should highlight trends of the company, and the strengths and weaknesses of the company. Again trend analysis is a useful tool in your analysis of the ratio performance of the firm.
5. Forecast a five-year Balance Sheet and Income Statement for the company using each of the methods listed below (a total of 3 Income Statements and 3 Balance Sheets). This is an External Funds Needed Analysis. Specify how you will finance (balance) the firmâs shortfall/surplus.
a. Historical growth rates
b. Analyst projected growth rates (You may use the IBES consensus estimates from THOMSON ONE for the analyst estimate).
c. Sustainable growth rate
6. Given your financial forecast in B.5., generate a 5-year forecast for the following two variables for your company (choose one of the above forecasting methods):
a. The free cash flow to the firm (FCFF).
b. The free cash flow to equity (FCFE).
Please provide a hard copy (printed) of your report and a soft copy of the report on Canvas. Please make sure you keep a soft and hard copy of your report for your records.
PART C – Based upon the data collected in section A and B, complete the following
1. Using monthly return data for the last five years for your company, compute the following three variables:
a. The beta for your company.
b. An average return on your companyâs stock.
c. The standard deviation/stand alone risk for your company.
2. Use the data derived in C.1., compute the cost of equity for your company. Also estimate your companyâs WACC. Provide all your assumptions.
3. Generate a what-if analysis for the WACC based upon changes in the listed assumptions.
4. Compute the value of your company based on your analysis. Compare your value estimate to the actual market value of your company (based on closing stock price) on Friday, April 19, 2013.
5. Based upon your stock price forecast for the company, provide an investment recommendation for the stock and justify your recommendation.
6. Complete a report incorporating the work completed in Parts B and C. This report should be type written and no more than eight (8) pages long. The write-up should incorporate the business information collected, an analysis of past performance of the firm, and a discussion of the projections and valuations generated in your analysis. Projections and other spreadsheet analysis should not be included in the body of the report, but provided as an exhibit. Please provide a hard copy (printed) of your report and a soft copy of the report on Canvas. Please make sure you keep a soft and hard copy of your report for your records.
PLEASE ATTACH THE DATA COLLECTED IN SECTION A TO THE REPORT.
