BUS 504 – Course Project Part I

When analyzing/assessing a company, it is important to compare it to its own past (Internal/Trend Analysis) and to its competitors and industry norm/leaders (External Analysis).
(Note: Analyze means you should find out not only what happened, but also how and why it happened, whether it is good or bad and its impact to the future)

Internal Comparison:

1. Graph and analyze your company’s trends in sales, expenses, earnings, financial leverages (level of debt), and other important accounts reported in the summary data of its annual report.
2. Study and analyze your company’s Balance Sheet, Income Statement, and relevant notes provided in its 10K filing. Calculate and analyze growth rates of major accounts of your company’s Balance Sheet and Income Statement, and analyze significant changes.
3. Prepare and analyze your company’s common-sized Balance Sheet and common-sized Income Statement for the past two- three years. You may reference some analysis in its 10K’s Management Discussion and Analysis (MD&A).
4. Study and analyze your company’s Statement of Cash Flows. Common-size and analyze the Total In/Out Cash Flows and Operating In/Out Cash Flows. Then conduct analyses including important points in assessing the ability of your company to generate cash flows and the appropriate use of cash flows for the past 2-3 years. For example, were there significant differences of your company’s cash flows from year to year? Were cash flows from operating activities sufficient enough to cover investing and financing activities? If they were not, how did the company finance its investing and operating activities? From where did the company generate most of its inflows and to where the company use most of its cash outflows? Compare the signs, trends, growth, and volatilities of your company’s operating cash flows vs. net incomes? Also predict your company’s ability to generate operating cash flows and fulfill cash obligations in the future.
5. Finally, please use above analysis to summarize your company’s financial/cash flow status (from Balance Sheet/Statement of Cash Flow) and financial/cash flow performance (from Income Statement/ Statement of Cash Flow) for the past two- three years.

External Comparison:

1. Select one or two of your company’s competitors . Perform the same analysis indicated above for the selected competing company (ies).
2. Compare and analyze your company and its competitors’ financial/ cash flow position and financial/ cash flow performance for the past two- three years.

Together

1. Analyze and summarize your company’s strengths and weaknesses relative to its competing firm(s) by utilizing your internal and external comparison results.

Due Date: August 6th

I want to see if you know how to conduct analyses. So both your excel work and written text should be turned in. You may turn in simple bullet point summaries to illustrate your written analysis, however.