I. Corporate and Industry Financial Analysis and Presentation
II. Introduction
Measurement, analysis, and interpretation (Excel): Accurately computes all ratios and other financial metrics relevant to the industry. Apply financial statement analysis to evaluate a firm’s financial performance Research: research and present current information on the firm and the industry.
Decision making: Engage critical thinking skills to select most relevant ratios, identify all data outliers, select 5 qualitative factors impacting the firm, identifies internal weaknesses and external: threats, incorporate relevant current news, accurately identify limitations/shortcomings in the analysis, and highlight data in which the group found questionable/suspicious.
You’re one of the top three candidates for a position at Benson, Cundiff, & Gilbert a financial accounting and brokerage firm in the heart of Washington, DC. You’ve always wanted to live in the District, as locals call it.
Sasha, the head of Human Resources at Benson, Cundiff, & Gilbert called this morning. After a brief discussion, Sasha says, “in preparation for your third interview you will be making a presentation to our Board of Directors and at least one of the three principals, but don’t worry about that, they are eager to meet you.” Easy for her to say, you thought. Further, Sasha says, “we also want to learn how well each candidate works as a team member, so you will prepare and make the presentation with the other three candidates. This will be very useful to those making the hiring decision. Each candidate will be assessed on the process used to create the presentation file and the actual presentation. We’ve done this type of interviewing in the past and sometimes more than one candidate is hired:
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not for the same position but in related jobs. Are you willing to partake in this group interview?” Without giving it a lot of thought because you didn’t want to sound hesitant, you say “Absolutely; what time and where?”
III. Steps to Completion
Conduct a comprehensive financial analysis of a publicly traded corporation and make a presentation to the Board of Directors (professor). Financial analyses will be performed in Excel and the presentation will be prepared in PowerPoint. The Excel file must support the figures in your presentation.
The results of the financial analysis will be presented in a professional quality PowerPoint presentation, with the presenter’s notes under each slide. Step 1: Prepare Excel file
All cells requiring computations must have a formula. Cell formulas should reference other sheets where appropriate. Complete all calculations in one Excel file; multiple sheets are encouraged.
Step 2: Prepare PowerPoint presentation
A. Introduction to the industry in which the corporation operates – this section may
require multiple slides
Common issues/risks all corporations face in the industry
Critical success factors in the industry
Current economic health of the industry
B. Introduction to the corporation – this section may require multiple slides
A brief history
Briefly describe the corporation’s strategy
Identify the corporation’s major competitors
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C. Financial analysis – this section will require multiple slides
Compute the accompanying financial ratios for the 5 most recent years for which a Form 10-K has been filed.
In addition, you should obtain the industry average ratios for the most recent year for the SIC code of the industry in which the corporation operates. The corporation’s ratios for the most recent year will be compared to the industry ratios.
Compute any ratios or metrics which are industry-specific for the 5-year period
Prepare a 5-year trend analysis (also known as a horizontal analysis) of each of the ratios computed in A and C. Note: the corporation data will represent a 5-year trend, the industry data for the most recent period will represent a point in time.
Create tables, graphs, or other media to present your findings. All tables/graphs/etc. included from external sources, those you did not create, must be cited.
Be sure to address any data/ratio outliers (red flags) discovered in your analysis.
Summarize your findings by these financial ratio categories: Liquidity ratios, Efficiency ratios, Leverage ratios, Profitability ratios, Market Value Indicators.
Some ratios may not be applicable to your corporation. For example, inventory ratios may not be applicable for corporations in the service industry corporations. If a ratio is not applicable and not computed for your corporation, explain the reason the ratio is not applicable for this analysis.
D. Qualitative factors
Address issues of a qualitative nature that may impact the financial health of the corporation. For example, pending litigation, disclosures in its annual report, presence or lack of a corporate code of ethics/professional behavior, a corporate hotline, foreign operations, legislation, recent employee strikes, political issues, SASB/environmental issues in the annual report, etc. Check for news articles within the past five (5) years.
E. Risks
Discuss internal weaknesses and external threats to the financial health the corporation faces. See Michael Porter’s Competitive Advantage to learn more about a SWOT analysis.
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F. Summary of analysis
Summarize your findings.
Highlight any items from your analysis for which you are skeptical or have doubt.
Identify any shortcomings in your analysis.
Conduct an online search for any late-breaking information/news, which may be available since the filing of the most recent Form 10-K may have been many months ago. Often, this will be in a subsequent filing of Form 8-K.
G. References
Sources of information used in the project. Use strict APA Style for the Reference list.
IV. Deliverables
A. Excel
Include as many sheets as necessary to perform the required financial statement analysis. Save the file with the Group name as part of the file name. Example: Group 1 Project.xlsx.
B. PowerPoint
Prepare the file in APA Style. You may find this video helpful in determining how to apply APA Style to presentation files: APA formatting for PowerPoint.
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