ACCT2-SPR17: Financial Analysis Project

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ACCT2-SPR17: Financial Analysis Project

Online research:

Go to: http://morningstar.com

Select a PUBLIC Company (U.S.-based (not foreign) that you would like to research;

Insert company name or stock symbol into “Quote” box at top of page

Note 1: If more than one company name/stock symbol results from search, click on                                                      the company you have chosen. Make sure it is NYSE or NASDAQ.

Note 2: If company name does not work, it may be owned by another company;

(Google: “name of company”+parent) or choose another company

Note 3: Do NOT choose a financial institution (bank, insurance company, brokerage       firm, etc.)   

Note 4: Recommend choosing large, profitable companies

Click on Financials tab

– Make sure you set:

Statement Type:         ANNUAL

Data Type:                  RESTATED

Period:                         5 YEARS

Show Report Dates:   DESCENDING

 

PRINT INCOME STATEMENT

 

Click on Balance Sheet tab

PRINT BALANCE SHEET

– Make Sure Detail of Current Assets is shown (arrow pointed down)

 

PRINT CASH FLOW STATEMENT

Click on “Quote”tab

PRINT OVERVIEW Page(s)

PRINT COMPANY PROFILE

Print-outs of five pages (Income Statement, Balance Sheet, Cash Flow Statement, Overview and Company Profile) MUST be submitted

Complete the attached worksheets.

Due Date: Wednesday, April 19, 12:45pm; no e-mail submissions

Maximum score equals 10 points. Late submissions will be accepted with loss of 1 point per class late.

Assignment is to be done on an INDIVIDUAL basis; assignment points for any “group” work will be split among the group

Name___________________________________

Company Name__________________________

(1)        Vertical Analysis

(a) Calculate Vertical Analysis of Income Statement for the last TWO years (most current and next most current). Calculate percentages to one decimal place. (e.g. 26.4%).            Dollar amounts may be shown, but are not required. Ignore all subtotals and lines with zero data. Write in any non-zero lines not on the form.

 

Current Year                      Prior Year                     FAV(UNF)

Revenue                                                         100.0%                                         100.0%

Cost of Revenue

Research & Development expense

Sales, General &Admin. expense

Depreciation & Amortization exp.

Restructuring, merger expense

Other operating expenses

Interest expense

Other income (expense)

Provision for income tax expense

Net income from Discontinued Oper.

Other income (expense)

Net Income

(b) Based on your vertical analysis, state the major reasons for the change in net income

     as a percentage of revenue and whether the change was favorable or unfavorable.

• Ratios

(a) Calculate the following ratios for the last TWO years and indicate whether the trend was favorable or unfavorable (two decimal places for times ratios (e.g. 1.42X) and for percentage ratios (e.g.12.85%).

.                                                                                                                                                       FAVORABLE                                                              Current Year             Prior Year                  (UNFAVORABLE)

Liquidity/Solvency Ratios

1-Current Ratio (X)

(Current Assets / Current Liabilities)

2- Acid-test Ratio (X)

(Total Cash investments +

Receivables / Current

Liabilities)

3-Accounts Receivables Turnover(X)

(Revenues/ Average

Receivables)

 

 

 

 

4-Inventory Turnover(X)

(Cost of Revenue /

Average  Inventories)

 

 

 

 

5-Debt Ratio (%)

(Total Liabilities / Total Assets)

 

 

End of                             End of                             Incr. (Decr.)         Balance Sheet                                      Current Year                Prior Year                        $                %

 

6- Total Cash

7- Total Current Liabilities

 

Overall Conclusion on Liquidity/Solvency based on above Ratios and Balance Sheet data

FAVORABLE                                                                     Current Year       Prior Year                   (UNFAVORABLE)

 

Profitability Ratios

 

• Gross Margin (%)

(Gross Profit / Revenue)

 

 

• Profit Margin (%)

(Net Income / Revenue)

• Return on Common

Stockholders’ Equity (%)

(Net Income / Average Total

Stockholders’ Equity)

4-    Return on Total Assets (%)

(Net income / Average Total Assets)

5-   Basic Earnings per share ($)

(given on Income Statement)

Incr (Decr)

Income Statement                         Current Year                       Prior Year                       $               %

5- Revenue

6- Net Income

Overall Conclusion on Profitability based on above Ratios & Income Statement data.

(3)        Cash Flow

From the Statement of Cash Flow (FOR CURRENT YEAR ONLY):

Net Cash From (Used by) Operating Activities      _______________

Net Cash From (Used by) Investing Activities        _______________

Net Cash From (Used by) Financing Activities      _______________

Effect of exchange rates                                           _______________

 

Net Change in Cash                                                  _______________

 

Identify the Major Cash From (Used by) Investing Activities (2-3 items):

(NOTE: Click on arrows to view details)

(NOTE: EXCLUDE Sales and Purchases of Investments)

Item                                                    Amount

Identify the Major Cash From (Used by) Financing Activities (2-3 items):

(NOTE: Click on arrows to view details)

Item                                                    Amount

How would you characterize the “quality” of the Company’s cash flow for the CURRENT YEAR? Why?

(4) Miscellaneous Data:

Over Last Five Years

Total Common Stock repurchases ($Millions)                                ______________

 

Current Year

Income Tax Rate (%)

(Provision for income taxes / Income before taxes)                         ______________

 

 

Executive Compensation (Click on Insiders) ($)                                  Current Year

Name                                                        Compensation

CEO___________________________________                          ______________________

 

CFO___________________________________                          ______________________

(5) Bonds (Click on Bonds Tab)

 

 

Morningstar Credit Rating                                                             ____________

 

Amount of Bonds Outstanding                                                        ____________

 

 

Capital Structure:

Most Recent:

Debt %                                                                                           ____________

 

Equity %                                                                                        ____________

 

Is Most Recent Capital Structure more or less

risky than Historical Average for this company? Why?

# of Individual Bond Issues listed (approx.)                                   ____________

 

Range of Maturity Dates (from “year x” to “year y”)                   ____________

 

Range of Coupon (Contract) Rates (from x% to y%)                    ____________

 

Largest Single Bond Issue Amount                                                 ____________

 

Are most bonds trading at discount, premium or mixed?           ____________

 

Are most bonds callable?                                                                  _________

 

Debt/Equity ratio: (X)

Firm (Company) ratio                                                                      _________

 

Industry ratio                                                                                    _________

Is Company favorable or unfavorable to industry?                      _________

 

 

Debt/Assets (X)

Firm (Company) ratio                                                                      _________

 

Industry ratio                                                                                    _________

Is Company favorable or unfavorable to industry?                     _________

(6)        Stock Analysis:

Click on Quote tab-Overview Page:

Stock Symbol (1-4 letter abbreviation)                                                     __________

Stock Exchange (XNYS=New York or XNAS=NASDAQ)                    __________

Shares Outstanding                                                                                     __________

Market Capitalization (Market Value of Company)                               __________

Latest Price of Stock                                                                                    __________

52 Week High                                                                                               __________

52 Week Low                                                                                                __________

Based on the 52 week data, is the current price of the stock (circle one)

Inexpensive (closer to the 52 week low)

Expensive (closer to the 52 week high)

Neither (approximately halfway between 52 week high and low)

 

Morningstar Rating (1 to 5 stars)                                                                __________

 

Wall Street Recommendation (1=Sell to 5=Buy)                                        __________

 

Dividends:

Latest Dividends Amount (quarterly, per share)                                       __________

Dividend Yield (%)                                                                                       __________

If the current Dividend Yield for the overall stock market is 2.0%, is your company a high dividend or low dividend stock compared to the overall stock market?

            PE Ratio (Price/ Earnings TTM)                                                                 __________

If the current PE ratio for the overall stock market is 25X, is your company a “growth” stock or a             “value” stock compared to the overall stock market?

 

 

In Stock Price Chart Section:

Click on 1Y(1 Year)                                      Stock Market Price per Share                 Increase (Decrease)

Current                   April 2016                       $                    %

_______                   _______                      _____        _____

 

If the average stock on the stock market is up 15% since April 2016, how would you describe your company’s stock price performance over the last year compared to the average stock?

Click on Quote tab-Company Profile:

Business Description:________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

Company headquarters (State)                                                                                ____________                        Number of employees                                                                                               ____________            Auditor                                                                                                                       ____________

Industry                                                                                                                     ____________

Fiscal Year Ends                                                                                                       ____________

(7)     Summary Conclusion:

Based on all of your attached analysis, summarize (bullet-point) the most important recent financial trends/developments of the Company and your overall conclusion.