BUS 504- Introduction to Accounting and Finance
(Spring 2016)

Course Project

Your final course project will be a comprehensive analysis of a company’s financial statements and financial policies. Please utilize all theories, tools, and techniques you have learned in the course.

General Assignments

Based on your analysis of the company’s financial statements, financial policies, financial market performance, and any relevant supplementary information you can obtain about the company and its operating environment, 1) identify areas in which the company is performing well (strengths) and advise of any problem areas (weaknesses); 2) assess how the firm’s strengths and weaknesses affect its credit worthiness and investment potential; 3) assess the company’s major financial decisions and policies and advise of potential strategic changes.

Data

The time period for the analysis should include two to three full year financial statements (five to ten years of summary data for trend analysis). In addition to the financial statements and notes, MD&A, and other materials in the annual and 10-K reports, you should review relevant materials from your company’s website and outside sources such as newspapers, periodicals, books, and various web resources.

Outline

The following outline is provided for guidance, but the analysis should be adjusted, as appropriate, to conform to the individual characteristics of your company.

Suggested Outline for the Financial Statements/policies Analysis

I. Introduction
A. Objective of paper
B. Summary of findings

II. Firm, Industry, and Macroeconomic Environment
A. Description of firm and its management
B. Discussion of industry competitiveness and environment
C. Economic climate and outlook
D. Other factors, e.g. governmental regulations, labor relations, litigation

III. Evaluation and Comparison of Financial Statements and Financial Performance.
(Please perform both internal and external analysis with one or two competing companies)
A. Overview
B. Financial statements and common-sized financial statement analyses
C. Cash flow analysis
(Including calculation and analysis of common-sized cash flow statements)
D. Short-term liquidity
E. Operating and asset management efficiency
F. Capital structure and long-term solvency
G. Profitability
H. Market ratios and stock performance
(Calculate and analyze ratios for D-H.)
I. Quality of your company’s financial reporting
(You’ve done all the work in Part I & II of the project. It is time to present your work in a concise, organized, and professional manner)

IV. Evaluation and Comparison of One of the Financial Policies Listed Below
A. Capital structure
B. Capital budget
C. Dividend policies
D. Raising capital and financial instruments(stocks, bonds and their risk/return)

V. Outlook, Summary, Solutions, and Conclusions
A. Outlook for performance and earnings projection
B. Investment potential (from shareholders’ perspective)
C. Credit assessment (from creditors’ perspective)
D. Suggested changes of main financial policies
E. Suggested strategic changes
F. Summary and conclusions

VI. References

VII. Appendix