Your team is required to analyze the future business and economic prospects of a major, publicly traded corporation using financial concepts and techniques as well as the concepts and techniques from other business areas. Make sure any statements you make in your analysis are consistent with the knowledge base of finance. Also please include your calculations (including spreadsheets), data sources (be specific, including date and page number(s)), and assumptions (explain your rationale) in the appendices.
While your analysis should be geared toward finance, nobody, of course, can make business decisions using solely finance techniques and concepts, so where applicable, incorporate techniques and analysis from other business fields.
The following is a list of the minimum requirements for your project. Additional credit will be given for creativity and analysis beyond the minimum requirement. If you have any questions, please e-mail them to your instructor.
(1) EXECUTIVE SUMMARY:
Provide a one (1) page executive summary which summarizes your findings and provides a recommendation whether to buy or not to buy the stock and the debt securities of the company (two separate decisions).
(2) COMPANY INTRODUCTION:
Provide a one page (1) introduction to your company including: company history, strategy, main products & services, primary markets & customers, major competitors, industry overview, and other relevant information.
(3) FINANCIAL ANALYSIS:
Conduct a two-year financial analysis of your company using financial ratios. Include a Du Pont analysis. (You can refer to your Essentials of Business I Corporate Annual Report project for the appropriate ratios.) Comment on the financial health of the company. Please look at ratio trends and compare to industry average.
(4) WEIGHTED AVERAGE COST OF CAPTIAL (WACC):
Estimate the components of the cost of capital for your company using market data.