Company Analysis Project

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Hi Students:
This can be done individually or with up to 1 partner (groups of 2 max). We will go into Financial Statement Analysis in class together, but detailed resources
are listed below if you want to start early.
For part 2 of this project I’d like you to:
1. Select 2 publicly traded companies of your choosing. These companies MUST be:
o Competitors
o In the same Industry
o Have financial statements presented in English (does NOT need to be a US-based company though) AND must be registered with and posted on
the SEC search database (EDGAR).
• You MUST use the MOST RECENT annual 10-K filing
• Do NOT use a 10-Q (quarterly filing) because you must compare ANNUAL 10-K financial statements of two companies
2. Select a combination of at least 5 Ratios/financial statement line items (specific lines in the financial statement like cash or income) to analyze
from BOTH these companies (5 items for each company)
o These ratios must include AT LEAST one ratio from THREE OR MORE of the below categories (you cannot ONLY analyze based on the
Profitability Ratios for example, you must diversify your analysis):
Profitability Ratios (6 ratios total to choose from)
• Asset Turnover Ratios (4 ratios total to choose from)
Liquidity Ratios (3 ratios total to choose from)
Solvency Ratios (3 ratios total to choose from)
• Market Ratios (2 ratios total to choose from)
• See Ch. 13 slides for details on all these ratios and Ch. 13 Lecture for more elaboration.
o Up to 2/5 of the items you’re analyzing can be specific financial statement line items (depreciation, R&D expense, etc.)
o I recommend you think of what ADDS VALUE, not what is the easiest to calculate – if your analysis doesn’t add value, you won’t receive a
good score.
1

o
These ratios must include AT LEAST one ratio from THREE OR MORE of the below categories (you cannot ONLY analyze based on the
Profitability Ratios for example, you must diversify your analysis):
Profitability Ratios (6 ratios total to choose from)
• Asset Turnover Ratios (4 ratios total to choose from)
Liquidity Ratios (3 ratios total to choose from)
Solvency Ratios (3 ratios total to choose from)
• Market Ratios (2 ratios total to choose from)
See Ch. 13 slides for details on all these ratios and Ch. 13 Lecture for more elaboration.
o Up to 2/5 of the items you’re analyzing can be specific financial statement line items (depreciation, R&D expense, etc.)
o I recommend you think of what ADDS VALUE, not what is the easiest to calculate – if your analysis doesn’t add value, you won’t receive a
good score.
3. Deliver your analysis in the form of a Report with the following criteria:
o 0.75-1pg, 12pt, Times New Roman or Arial font
• This can be either single or double-spaced, but should not exceed 1pg. I do not care about APA/MLA format.
• Your goal should be to answer the below questions:
• As an investor, what company would you recommend investing in (and why – the analysis/justification is most important)?
• What recommendations do you have for the management of one of or both of the companies?
o On the 2nd page and subsequent pages of the report, please show:
• Links to your financial statements in EDGAR
• Write out and show your calculations for ALL of your ratio calculations FOR BOTH companies and CLEARLY SEPARATE THE COMPANIES so I
can tell which numbers go with which companies.
• Include screenshots of the Balance Sheet & Income Statement for BOTH companies (or at least screenshots of the relevant portions where
you’re pulling your numbers from for your calculations).
4. If you want additional guidance – you can view this guided video where I walk you through searching companies in EDGAR, etc.
Don’t stress this too much – I basically just want you to learn how to look up and research real-world financial statements and show me you’re able to actually
think critically about what the numbers you’re seeing represent and mean. As long as you can take a solid logical position on the company, I will be kind
with awarding points – I DO NOT expect you to be financial experts and make a perfect argument or recommendation – even Wall Street doesn’t
always get it right.
NOTE: NO LATE SUBMISSIONS CAN BE ACCEPTED DUE TO THE FACT I CAN’T ASSIGN WORK GOING INTO FINALS WEEK.

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Explanation & Answer:
3 pages

Tags:
economics

company analysis

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