Faculty & Staff > Project Description Project DescriptionBusiness Finance, 221Project DescriptionDr. C. C. Mount Spring 2004
FINANCIAL RATIO ANALYSIS
Each student will prepare a financial ratio analysis on a publicly held company.The ratio analysis will be both a cross-sectional and trend analysis.The ratios used in the analysis are constructed using balance sheet and income statement data contained in a company's published annual report and other readily available sources.Each student will obtain an annual report for the company that he/she has chosen to analyze. The library has compiled a collection of hard copy annual reports and has an online database (Mergent) of company information for use in this assignment.Another option is to visit the company?s website. Most publicly held corporations now publish their financial statements on their websites.It is permissible to download the financial statements from a company?s website for inclusion in the report provided the statements are ?Audited Financial Statements.?
A cross-sectional analysis involves computing several financial ratios for a company then comparing these ratios to those representing the associated industry norm and/or major competitor.This portion of the analysis is useful for assessing whether a company's financial performance is better or worse than the selected norm. A cross-sectional analysis requires the collection of industry data.To facilitate this part of the assignment, students will work in industry teams.This means that students should identify a team of no more than three members and select three companies from the same industry.Each student will prepare an individual report for the company he/she has chosen but should work collectively when generating and presenting industry data.The industry description and the industry ratios used in each student?s report should be the same for the three companies.
A trend analysis involves computing selected ratios for a company for several years and examining the pattern of these ratios over time.This portion of the analysis is useful for determining if a company's financial performance is deteriorating or improving.Trend analysis should be conducted for all the firm's ratios that deviate form the industry norm, both positive and negative.A trend analysis should cover a minimum five-year period.Annual reports generally contain three years of historical data. If the minimum five years of data is not reported, additional research will be necessary.
Students will work in teams of three when preparing and presenting their reports.The team will identify three companies that operate in the same industry, but each team member will prepare an individual report on his/her specific company.Teams should work together in researching and analyzing the industry environment, and the industry analysis component of the written report should be the same for all companies.
Class presentations will be organized by industry teams. The team will decide how to present the industry information and each student will individually present his/her specific company analysis.Students should carefully coordinate the class presentation, as a well-organized delivery will enhance your grade.
The written report should be well organized, clearly and concisely written, and free of spelling and typographical errors.In short, the report should be a document you would be proud to present to your boss.The body of the report must be word-processed and include a summary table of the cross-sectional ratio analysis and other tables or graphs as needed to report information discovered in the research that is important to the analysis.Calculations for the financial ratios for the current year should be included in an appendix along with a copy of the firm's financial statements.Calculations need not be typed.
The Writing Center is available for students who feel they need to improve their writing skills or would like assistance in organizing the report.The Writing Center tutors will not write the report.The tutors will, however, review drafts and suggest revisions when appropriate.
The oral presentation should be professional.A PowerPoint presentation is required and other appropriate visual aids and/or handouts to enhance your presentation and engage your audience are recommended. Look, dress and present professionally.When presenting your report, you may use note cards but DO NOT READ YOUR WRITTEN REPORT OR THE NOTE CARDS TO THE CLASS.This is a presentation, not a reading.If you read from the report during the presentation, you will receive a zero grade for the presentation.If you are not comfortable in front of a audience, practice your presentation before your friends or peers.Effective oral presentation skills will enhance your success in the business world.Begin building these skills now.
PROJECT EVALUATION
Division of Business and Economics Writing Policy: A minimum twenty-five percent of the grade on ALL written assignments is based on the writing skills evidenced in the writing assignment. Those skills are evaluated using the written report evaluation criteria attached to this policy. Effective: Fall 2003
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