Company Name: A Financial Analysis€¦ · Web view2020. 6. 9. · Company Name: A Financial Analysis [Author Name(s), First M. Last, Omit Titles and Degrees] [Institutional Affiliation(s)]

Running head: [Shortened Title up to 50 Characters]1

Company Name: A Financial Analysis

[Author Name(s), First M. Last, Omit Titles and Degrees]

[Institutional Affiliation(s)]

[Shortened Title up to 50 Characters] 2

Abstract

[The abstract should be one paragraph of between 150 and 250 words. It is not indented.

Section titles, such as the word Abstract above, are not considered headings so they don’t use

bold heading format. Instead, use the Section Title style. This style automatically starts your

section on a new page, so you don’t have to add page breaks. Note that all of the styles for this

template are available on the Home tab of the ribbon, in the Styles gallery.] You will write this

section during the final submission

Keywords: [Click here to add keywords.]


[Be sure to remove all red comments before final submission]

[Update tables by right clicking on each table and choosing update all]

Table of Contents

Abstract................................................................................................................................2

Table of Tables.................................................................................................................5

Table of Figures...............................................................................................................5

Company Name: A Financial Analysis................................................................................6

Company Overview.............................................................................................................6

History.............................................................................................................................6

Current Market.................................................................................................................6

Strategic Analysis................................................................................................................6

SWOT..............................................................................................................................7

Weaknesses..................................................................................................................7

PESTLE...........................................................................................................................7

Strategic Summary...........................................................................................................8

Financial Statements and Ratios..........................................................................................9

Liquidity..........................................................................................................................9

Asset Management...........................................................................................................9

Debt Management..........................................................................................................10

Profitability....................................................................................................................10


Financial Statement Overview.......................................................................................10

Stock Analysis....................................................................................................................11

Stock Price Trends.........................................................................................................11

Investor Return..............................................................................................................13

Performance Forecast....................................................................................................14

Stock Analysis Summary...............................................................................................14

Comparative Analysis........................................................................................................15

Overall Company Performance.....................................................................................15

Overall Industry Performance........................................................................................15

Overall Market Perforamnce.........................................................................................15

Example Investment......................................................................................................15

Conclusion.........................................................................................................................16

References..........................................................................................................................17


Table of Tables

Table 1 - Liquidity Ratios................................................................................................................9

Table 2 - Asset Management............................................................................................................9

Table 3 - Debt Management...........................................................................................................10

Table 4 - Profitability.....................................................................................................................10

Table of Figures

Figure 1 - XYZ 5-Year Stock Performance (gurufocus.com,2017)...............................................12

Figure 2-NASDAQ 5 Year Perforamnce (marketwatch.com, 2017).............................................13


Company Name: A Financial Analysis

You will write this section last for the final submission. This will be a 3 – 4 paragraph

summary of the paper. This section will introduce each of the main headings (company

overview, strategic analysis, financial analysis, stock analysis, comparative analysis). The title

above remains un-bolded and centered as the first heading to the paper.

Company Overview

All headings are appropriately placed in the following template. Leave headings at their

current level. Level 1 headings indicate main sections or chapters. Level 2 headings introduce

sub-sections. Level 3 headings begin main paragraphs. Note, level 3 headings include a period

and begin the paragraph immediately following the heading without moving to the next line.

Level 1 and 2 headings should always be followed by a brief transition paragraph or summary of

the next section.

Introductory paragraph. Summarize the section in 1 – 2 paragraphs including the history,

current market, and the overall image of the organization.

History

Provide a brief overview of the company, how it was founded, when it became publically

traded, etc.

Current Market

Include a brief 2 – 3 paragraph description of the current market the organization operates

in (e.g. Apparel, Sporting Goods, Travel and Entertainment, etc). Also describe the regional

market (Global, U.S. Only, etc). Describe which stock market the company is traded on. Include

at least 3 – 4 of the top competitors in the market.

Company Summary


This is the concluding paragraph for Company introduction and overview. This

paragraph will transition to the strategic analysis. Provide a similar overview as the introductory

paragraph and highlight the next perspective is an analysis of the external and internal factors

and influences of the organization.


Strategic Analysis

Introductory Paragraph, again 1 – 2 paragraphs highlighting the key examinations

included in the strategic analysis. The strategic analysis herein incorporates two perspectives, an

examination of the company’s strengths, weaknesses, opportunities, and threats (SWOT) as well

as a broader market examination using the PESTLE analysis (political, economic, social,

technological, legal, and environmental).

SWOT

The assessment or review of the strengths we (SWOT) – Use Case Data Part 1. May use

level three headings for SWOT as illustrated below. Be sure to cite information. The

information can come from a number of sources and should not be a reference to another SWOT

created for the company.

Strengths. Highlight 2 – 3 key strengths. This may be a short paragraph or only one or

two sentences. The same applies for weaknesses, opportunities and threats below..

Weaknesses. Note, this is a level 3 heading. Notice how the paragraph begins right after

the period and continues without moving to the next line.

Opportunities.

Threats.

Following threats make sure to summarize the overall section and transition to PESTLE.

Explain in 1 – 2 sentences what the perspective difference is between SWOT and PESTLE

PESTLE

The assessment or review of the PESTLE factors – Use Case Data Part 1

This format should be very similar to the SWOT. Level 3 headings for each and 2 – 3

highlights. Short paragraphs of 2 – 3 sentences.


Political.

Economic.

Social.

Technological.

Legal.

Environmental.

Following environment summaries the PESTLE analysis

Strategic Summary

Each main chapter (level 1 heading) will be concluded with a brief summary of that

section.

Provide a 1 – 2 paragraph summary of the SWOT and PESTLE. Compare and contrast

key elements of SWOT and PESTLE. Are there similarities, differences, perspectives, etc?


Financial Statements and Ratios

Transition paragraph introducing the difference between financial ratio analysis and

strategic analysis. What is financial ratio analysis and what does it provide by way of examining

the organization? This section uses Company Data Collection Worksheet 2

Liquidity

Discuss the overall trend in liquidity ratios. What do the liquidity ratios illustrate

generally?

Include the table as illustrated below and be sure to label it as a table using the references

tab in MS Word. A Table of Tables will then be added after the Table of Contents. Note the

format of the table is not a copy and paste from the spreadsheet. Use the proper boarders and

formatting for tables according to APA style as well.

Two paragraphs for each level 2 heading in this section. 1st paragraph describes the ratios

and what they indicate. Be sure to cite where you obtained your definitions. Do not quote

definitions, paraphrase and describe the ratios.

2nd paragraph identifies trends and patters (example: As illustrated in Table 1 – Liquidity

ratios, the company’s Current Ratio shows a 35% change from 2015 to 2016). Use the years and

data collected in class during the financial ratio segment. Be sure to cite the data source.

2014 2015 Change 2016 ChangeCurrent Ratio Quick Ratio Cash Conversion Cycle

Table 1 - Liquidity Ratios


Asset Management

Repeat the same layout and discussion as liquidity. Reference data collection sheet Case

Part 2 – Financial Ratios

2014 2015 Change 2016 ChangeInventory Turnover Ratio Days Inventory Outstanding Days Sales Outstanding (DSO) Total Asset Turnover (TAT)

Table 2 - Asset Management

Debt Management

Repeat same style. Reference data collection sheet Case Part 2 – Financial Ratios

2014 2015 Change 2016 ChangeDebt Ratio Debt to Equity Days Payables Outstanding Interest Coverage

Table 3 - Debt Management

Profitability

Repeat the same style. Reference data collection sheet Case Part 2 – Financial Ratios

2014 2015 Change 2016 ChangeProfit Margin on Sales Gross Margin Basic Earning Power Return on Assets (ROA)Return on Equity (ROE)

Table 4 - Profitability

Financial Statement Overview

Summarize and discuss the overall results shown above. How do they compare to each

other? E.g. The Company shows an overall increasing trend in debt but counters the rising debt

with increasing profitability.


Stock Analysis

Overview of the stock analysis section. 2 – 3 paragraphs. Each of the sections Pricing,

Performance, and Value Forecast may include charts created by you (not image copied from

website). Use the references – Figure label and include a Table of Figures. Each section should

include discussion on (a) company results, (b) Industry or competitor results (may choose

one main competitor), and (c) Market results (gurufocus has market results).

Stock Price Trends

Introduce the pricing section. Overview the method and the data included in the pricing

section. This should be 2 – 3 sentences to transition the Stock Price Analysis Do not include a

table here – describe the trends and results compared to your competitor company. **Rows

from Valuation Worksheet completed in class. 1 – 2 paragraphs for each of the following :

Method. Describe your method for collecting data and analyzing below. Example: The

high, low, and closing stock prices for all trading dates between 2013 and 2015 was collected

from Nasdaq.com. The maximum, minimum and average closing prices for each year are

leveraged below to evaluate growth forecasts. All references to growth rate were calculated

using a five year compound growth formula.

Pricing. Describe the pricing and growth trends over five years compared to your

competitor (no table). How does growth rate compare? How does average five-year prices

compare? Were there any big declines or increases worth mentioning? Use the data table to

describe and highlight key points.

The stock price trend for XYZ illustrated in a 5-Year pattern in Figure 1. Discuss the

overall trends (reference the stock analysis article for verbiage).


Figure 1 - XYZ 5-Year Stock Performance (gurufocus.com,2017)

The primary competitor ABC stock prices are illustrated in Figure 2 – ABC 5-Year Stock

Performance. Compare and contrast stock prices from your company with the competitor

company.

Figure 2 – ABC 5-Year Stock Performance (gurufocus.com,2017)

Figure 3 – Nasdaq Composite 5-year Performance, illustrates the changes in the overall

market. (Define what Nasdaq composite is). Compare and contrast with the NASDAQ


performance. “When compared with the NASDAQ performance over the same period of time a

(similar/different/contrasting,etc) trend can be seen in Figure 3 – NASDAQ 5-Year Performance.

Figure 3-NASDAQ 5 Year Perforamnce (marketwatch.com, 2017)

Investor Return

Introduce the investor return section here. Provide an overview the ratios included and

the difference between price model above and the investor return analysis.

Each level 3 heading below should include 1 – 2 paragraphs with (1) description of the

ratio and what it is used to evaluate and (2) highlights of the company compared to industry or

competitor) do not include any tables or charts in this section:

Earnings Per Share. Discussion of row 14*** including average, growth, competitor

and market (market growth over 5 years -0.7% - gurufocus.com). What is EPS and what does it

indicate or measure? How does the company compare to competitor on EPS?

Dividends Per Share. Repeat format for EPS. Mention, if no dividends (growth in EPS

indicates no dividends because of reinvesting) (decline in EPS indicates no dividends because no

profit)

Book Value Per Share. Use row 16. Repeat format for EPS

Price Earnings Ratio. Row 18


Dividend Yield. Row 21

Payout Ratio.

Return on Equity. Row 25

Performance Forecast

Transition to forecast section with 1 – 2 sentences describing the three methods included.

Identify the differences between market, price and dividend valuations.

Complete and discuss a value forecast based on earnings and based on dividends. 1 – 2

paragraphs for each level 3 heading. Do not include the formulas, tables, or charts here. Use

descriptive writing to explain how each model is calculated and what it indicates or suggests.

Market Closing Price Model. Price forecast for next year (Market Value). Price 2018

(or most recent year) * (1 + compound growth rate).

Earnings Model. for next year – calculate using row 31

Dividends Model. If your company does not have dividends, reference indicators or

statements (cited) as to why. Do they reinvest? Did they not have profit available to common

shareholders? Etc.

Forecast. Likelihood of consistency in forecasts based on trends – reference the trends

illustrated in the price charts are the forecasts likely consistent or likely overvalued/undervalue?

Example: Based on the trends illustrated and discussed above for the company pricing, the

stock price is likely undervalued as trends show a steady increase. Additionally, the five year

forecast includes the start-up year with low pricing.

Stock Analysis Summary

2 – 3 paragraphs summarizing the above findings and transitioning paper to next section.


Comparative Analysis

This will be the final concluding section of the paper. This section should incorporate

discussion on the prior four sections including: company overview, strategic analysis, financial

analysis and stock analysis. This section should be no more than 3 pages.

Overall Company Performance

Explain, based on the four prior sections the company’s overall performance (growth,

decline, up and down, etc) and what factors indicate or support this conclusion. This section

should be 2 to 4 paragraphs comparing and contrasting each of the prior sections.

Overall Industry Performance

Same as the company, but compare and contrast the industry (identified in company

overview) and/or top three competitors. Be sure to include overall (steady, growth, decline, etc)

and the factors indicating or supporting this conclusion.

Overall Market Perforamnce

Same as industry and company performance but this time assess the overall performance

of the stock market (e.g. NASDAQ).

Example Investment

Explain the background for your example investment (this is outlined in the Module 4

instructions). The example investment illustrates how the company, industry, and market

performance relate to investment outcomes. In this example, the investor has an income greater

than living expenses. The example investor has a liquid net worth of $1,000,000… etc (continue

from Module 4 Instructions).

Based on the analysis provided herein, XYZ would likely return a _____ to _____

percent on investment. With a 100,000 investment in common stock, the investor can expect an


annual return of _________. Over five years, assuming an annual average growth of ____, the

investor would have a total return of ______.

If the investor were to hold the funds in a savings account at 5% interest per year for five

years instead of investing in XYZ common stock, the investor would have a guaranteed return of

________. The savings account is the risk free option ensuring that the investor would be able to

confidently expect the return of $_______.

The stock return is (greater or lower) but also has (more / less) risk than the savings

account return. Based on the analysis of this report and the example investment comparison, the

__________ option would return the highest return over five years.

Conclusion

Provide a 3 – 4 paragraph conclusion for the entire paper. What was discussion and what

was concluded. What do you still not know or have to assume? Why?

This should be similar to the introduction at the beginning of the paper, but include

specific information and data that the reader should notice.


References

Last Name, F. M. (Year). Article Title. Journal Title, Pages From - To.

Last Name, F. M. (Year). Book Title. City Name: Publisher Name.


General Notes:

Citations - Political (Smith, 1996)

According to Smith (1996)

General –

No bullet lists

Use paragraphs

Explain why it is a weakness, strength, etc.

Leave out personal opinion – state fact and support with citation

Example: I was reading a study….

Instead: The Disney financial assessment (2016) indicates that….

Avoid contractions – don’t, didn’t, won’t, isn’t

Avoid slang or acronyms

Documents

Company Name: A Financial Analysis€¦ · Web view2020. 6. 9. · Company Name: A Financial Analysis [Author Name(s), First M. Last, Omit Titles and Degrees] [Institutional Affiliation(s)]