Financial analysis of a company with-in a selected industry

Financial analysis of a company with-in a selected industry

Select an industry and a company within the selected industry to complete a comprehensive analysis.
Develop a well-written paper focusing on fundamental and technical research. The goal is to obtain
a better understanding of the financial analysis process by studying public information and market
data to make informed investment decisions.

~Course Project Requirements: Your Course Project consists of valuing a firm using fundamental and
technical analyses and presenting your investment recommendation. Your course project will consist
of a 5-6 page paper following APA format and will include at least one graphic
(refer to the line chart under technical analysis below). The project should include a title page,
introduction, analysis, graphic(s), conclusion, and reference page.

~Fundamental Analysis: You will prepare a top-down fundamental analysis that covers economic, industry,
company, and financial analysis. The analysis should parallel the type of
analysis conducted by a professional security analyst (although not with the same degree of rigor).

~Economic analysis; Your paper must cover current monetary-fiscal policy, government policy,
economic indicators, inflation, gross domestic product growth (GDP), unemployment, and any foreign trade
and world events that are currently affecting the securities markets.
~Industry analysis; Your paper must cover the life-cycle phase your chosen industry is in,
the implications of such, and the industry structure (including but not limited to economic factors,
competitive factors, and government regulation).
~Company/financial analysis; Choose a specific company within your chosen industry
in which you would like to invest. Value the firm using a dividend valuation model, an earnings
valuation model, and the P/E ratio. Forecast earnings per share for the next two years.
Using the most recent two years of financial statements (annual report or 10-k), perform a ratio
analysis using the 20 ratios presented in Chapter 8(Located at bottom of attachment). (You do not need to calculate these ratios,
but must properly cite your sources.) The analysis should comment on the most recent year’s ratios
and on any trends between the two years, in addition to research industry norms for the profitability,
asset-utilization, liquidity, debt-utilization, and price ratios, and analyze your selected firm’s
performance against the industry.
Technical analysis: (Chapter 10) Using one of the readily available charting resources on the Internet,
prepare a line chart on the company’s price and volume movement. Discuss the overall movement of the
stock price and the relationship of the stock price to volume. Using a straight line of best fit through
the data, comment on the stock price that you project for the future.

Investment recommendation: Based upon the fundamental and technical analysis, present your investment
recommendation, tying together the results and data from your fundamental and technical analysis and
supporting your investment recommendation with your results and data.

Grading RubricsBack to Top
Content – 86%
Points
% of grade

~Economic Analysis
25
16% of grade
~Industry Analysis
25
17% of grade
~Company Analysis
29
19% of grade
~Technical Analysis
25
17% of grade
~Valuation and Investment Recommendation
25
17% of grade
~Total
129
86% of grade

~Editing – 14%
~Points Deduction (per occurence)
%
~Spelling Error
-3 points
~Punctuation/Grammatical Error
-3 points
~Sentence Meaning Unclear
-3 points
~Total (not to exceed)
21 points
14% of grade
~Total
150
100%

~Ratios~
We divide 20 significant ratios into six primary groupings:

A. Profitability ratios:
1. Gross profit margin.
2. After-tax profit margin.
3. Return on assets.
4. Return on equity.

B. Asset-utilization ratios:
5. Receivables turnover.
6. Inventory turnover.
7. Fixed-asset turnover.
8. Total asset turnover.

C. Liquidity ratios:
9. Current ratio.
10. Quick ratio.
11. Net working capital to total assets.

D. Debt-utilization ratios:
12. Long-term debt to equity.
13. Total debt to total assets.
14. Times interest earned.
15. Fixed charge coverage.

E. Price ratios:
16. Price to earnings.
17. Price to book value.
18. Dividends to price (dividend yield).

F. Other ratios:
19. Average tax rate.
20. Dividend payout.