Analysis of a company using data from its annual report. Analyze the strengths and weaknesses of the company and write a report either recommending or not recommending purchase of the company stock.
The completed report should include:
- An introduction to the company, including background information.
- A complete and thorough financial statement review.
- Pro Forma financial statements (Balance Sheet and Income Statement) for the next two fiscal years, assuming a 10% growth rate in sales and Cost of Goods Sold (COGS) for each of the next two years.
- Complete ratio analysis for the last fiscal year using at least two ratios from each of the following categories:
b. Financial leverage
c. Asset management
e. Market value
- Calculate Return on Equity (ROE) using the DuPont system.
- Assess management performance by calculating Economic Value Added (EVA).
- Review of the soundness of the company’s financial policies (e.g. capital structure, debt, leverage, dividend policy, etc.) based on the material covered during class.
- A synopsis of your findings, including your recommendations and rationale for whether or not to purchase stock from this company.