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# Financial Analysis

Anonymous

*label*Business

*timer*Asked: Nov 17th, 2016

**Question description**

This analysis has to be done in 3 days, with proper APA format.

Assigned Corporation is MAT - MATTEL
Financial Analysis Paper
The course project will require each student to complete a thorough financial
analysis of an assigned publicly traded corporation. The project deliverables will
be:
Structured Word Document (not a PDF) in proper APA Format.
Refer to the following links for APA guidance.
o https://owl.english.purdue.edu/owl/resource/560/01/
o https://owl.english.purdue.edu/owl/resource/560/18/
Supporting Excel spreadsheets including formulas and
calculations.
Prior to Week 1 students will be given a publicly-traded corporation to research.
Your assigned corporation will be posted in Blackboard in “My Grades and My
Assigned Corporation”. Project requirements must include the following analysis:
a. Description of the corporation: its products, markets, subsidiaries (if
any), risks, public highlights, and financial highlights. (Week 2 Discussion
Board).
b. Overall trend assessment of the company’s balance sheet and income
statement for the last three to five years. (Week 2 Discussion Board).
Including graphs and/or charts receives preferred grading.
c. Provide ratios fully calculated using your assigned corporations actual
balance sheet and income statement data within formulas in excel. Also
provide an analysis discussion of the same ratio trends (3 page “text”
minimum) included in a word document. Ratio categories must include
i. Short Term Solvency aka Liquidity
ii. Long Term Solvency aka Financial Leverage
iii. Asset Management aka Turnover
iv. Profitability
v. Market Value
Select and analyze at least three ratios from each category, 15 ratios
minimum. A three-year ratio analysis is the minimum expectation. A
five-year analysis receives preferred grading.
d. Trend analysis of the company’s stock price, PE ratio, and EPS trends for
the last three to five years with comparisons of each to competitors.
e. Evaluation of the firm’s posted Beta (do not calculate Beta, it will be
posted in financial websites such as money.msn.com online) in relation to
competitors.
f. Assessment of the firm’s capital structure (D/E Ratio) including any
significant changes in the firm’s capital structure over the last three to
five years.
(Continued on next page)
g. Excel calculation of the WACC (weighted average cost of capital)
including independent calculations of each of the following variables.
Cost of Equity using both the SML (aka CAPM) Approach and the
Dividend Growth Model Approach with a discussion explaining which
approach you prefer for WACC and why (Section 14.2 of the text
provides advantages and disadvantages for each approach). All of these
variables are defined in Chapter 14. There is an Eastman Chemical
WACC calculation example on pages 468 – 471 in the text.
WACC = (E/V)*Re + (P/V)*Rp + (D/V)*Rd * (1-Tc)
Corporate
tax rate
% of financing
that is equity
Cost of
equity
% of
financing
preferred
stock
Cost of
Preferred
Stock
% of
financing
that is
debt
Cost of
debt
h. Assessment of the firm’s statement of cash flows and determination of the
firm’s free cash flow over the last three to five years. (Week 6 Discussion
Board).
i. Closing summary of the firm’s financial health in relation to the overall
economy and within its industry. In your own words explain why or why
not someone should invest in this firm. Also show current analyst
recommendations as a guide with a discussion of supporting facts and
financial data.
A Draft Financial Analysis Report worth 30 Points will be submitted in Week 4.
For full credit, the draft must indicate significant progress on the following items:
10 Points - Draft Ratio Analysis calculations in Excel with at least five of the
ratio trends calculated (not just input) using formulas in Excel. (related to c
pg 7 above).
5 Points - Draft of the written ratio trend analysis (related to c pg 7
above) provided in Word.
5 Points - Draft of the Stock Price, PE, and EPS trend analysis compared to
competitors, with current beta comparison to competitors. A trend is not
required for beta. Excel calculations are not required for this particular
draft. (related to d and e pg 7 above).
10 Points - Draft WACC Calculations in excel with at least one method of RE
and the Bond Table for RD. (related to g above).
These Week 4 drafts are not a substitute for a COMPLETE paper in Week 7. A
complete paper incorporating the above key components is still required to be
submitted in week 7.
Project deliverable details:
a. Financial analysis Word file is to be a minimum 10 pages in length
as outlined in the rubric below. The cover page and supporting
reference appendices are not included in the 10 page minimum.
Page minimums are written text not including charts, graphs,
tables, or other images.
b. APA Paper Format: including but not limited to proper APA
headers, proper APA page numbers, and APA references with
hanging indent.
c. Supporting financial data will be prepared using Excel, including
mathematical formulas within the cells. The Excel data must be
clearly referenced as appendices in the related written discussion
in the Word file.
d. Additional materials such as graphs, charts, maps, etc. add clarity
and will earn preferred grading. Small items are to be nested
within the discussion. Large reference materials will be included
as properly referenced APA appendices. Appendix A contains the
income statement, balance sheet, and statement of cash flows.
Appendix B contains the ratio analysis. Appendix C has the full
WACC calculation with Cost of Equity using both the CAPM and
the Dividend Growth Model. Additional appendices are OK.
Reference page includes all references cited within the paper using APA format
including hanging indent for references. Safe Assign will be used to ensure proper
citing of academic references.
A Complete Financial Analysis Report worth 100 Points will be submitted in Week
7.
Related
Final Project Grading Criteria Rubric
Total
Points
Work
Week 2 Description of firm’s products, markets, subsidiaries (if any), risks,
5
Disc Bd public and financial highlights. (1-page written text minimum)
Week 2 Financial Statement Trend Assessment (1-page written text minimum)
10
Disc Bd Referencing Appendix A: Income Statement and Balance Sheet
Ratio calculations in Excel with supporting Word trend analysis (3-page
30
written text minimum) including at least three ratios from each of the
Week 4 following categories: (a) Short Term Solvency aka Liquidity, (b) Long
Draft
Term Solvency aka Financial Leverage, (c) Asset Mgmt aka Turnover,
Paper
(d) Profitability and (e) Market Value. A three-year ratio analysis is the
minimum expectation. A five-year analysis receives preferred grading.
Referencing Appendix B: Ratio Analysis Results
Week 4 Stock price, PE, and EPS trend analysis with each compared to their
10
Draft
competitors and the market (2-page written text min). A three-year
Paper
trend analysis minimum, five-year analysis receives preferred grading.
Also a current analysis of beta. Use posted Beta, do not calculate Beta.
Word Capital structure analysis (D/E ratio from Appendix B) and Word
15
WACC analysis contrasting Cost of Equity using the CAPM model vs.
the Dividend Growth Model with a discussion explaining which model
Week 4 was used for WACC and why. (1 page written text min). WACC
Draft
calculations in Excel with (a) Cost of Equity calculated in both Dividend
Paper
Growth Model and CAPM (aka SML), (b) Cost of Debt calculated from
Bond Table weighted average, and (c) Preferred Stock (if any).
Referencing Appendix C: WACC calculation including weighted average
Bond Table for Debt Calculations, Equity from both Dividend Growth
Model and CAPM Model, and Preferred Stock.
Week 6 Statement of Cash Flows Analysis & Free Cash Flow Analysis (1-page
10
Disc Bd written text min). Significance of Positive/Negative values. Reference
Appendix A Statement of Cash Flows. Excel Free Cash Flow Calculation
Conclusion: Critique of the firm - highlighting items in your paper.
5
Critique or support of Analyst Recommendations with backup (1-page
written text minimum)
Excel documentation concise, clear, supports narrative and calculation
5
requirements
Perfect spelling, punctuation, grammar; APA format; Appendices
10
Included & Clear
Appendix A: Income Statement, Balance Sheet, Cash Flow Statement
Appendix B: Mathematical Ratio Analysis Results
Appendix C: Full WACC calculation including weighted average Bond
Table for Debt Calculations, Equity from Dividend Growth Model,
Equity from CAPM/SML Model, and Preferred Stock (if any) calculated.
Total
100
Additional Preferred-Grading Points per Dr. Martin
?

## Tutor Answer

Nov 17th, 2016

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