The specific objective of this graded written research exercise is to prepare an "executive level financial report" to the Chief Financial Officer (CFO)

The specific objective of this graded written research exercise is to prepare an "executive level financial report" to the Chief Financial Officer (CFO) of a mythical company in which you are employed as a financial analyst. This report will pertain to the financial evaluation of a real, publicly-traded, company. It will require independent research (web-based or library), careful financial analysis, and the proper application of key financial theories and formulas. The company that is to be analyzed for this project is to be a company selected by instructor. Alternatively, you can request approval of another publicly traded company. This request must be submitted before the end of the first week of the course. The request must include identification of the company by ticker symbol and name a reasonable and appropriate explanation of why you want to examine the alternative company the source of the analyst's report that will be used in the analysis (which must be submitted to me) acknowledgement by you that all of the specific elements of the assignment (see below) will be prepared by you and included in the final research project report SITUATION You are a financial analyst with the mythical High Technology Corporation ("HTC"). HTC is an established manufacturer of a line of electronic components, which services an international market. HTC is currently a new fully-integrated wireless communication service for world-wide use. A competitive technical and economic product evaluation has determined that THE COMPANY THAT IS TO BE ANALYZED FOR THIS PROJECT (COMPANY SELECTED BY INSTRUCTOR) (a real publicly-traded company) is the best potential candidate for a long-term commitment. THE COMPANY (COMPANY SELECTED BY INSTRUCTOR) is offering a competitively favorable deal. However, based on some serious general concerns about the fallout of companies in the industry in general, the CEO has asked your CFO to conduct a financial analysis of THE COMPANY (COMPANY SELECTED BY INSTRUCTOR) to determine if it is prudent to commit to this company's communication system. The cost of cutting over to the new communications system is significant and any interruption in support during the next few years would adversely affect HTC's performance and profit. Specifically, the primary question is: will THE COMPANY be financially viable over the next two to three years? YOUR SPECIFIC ASSIGNMENT Your specific assignment is to research, analyze, and prepare a report for the CFO on the actual financial performance of THE COMPANY THAT IS TO BE ANALYZED FOR THIS PROJECT (COMPANY SELECTED BY INSTRUCTOR). In addition to reviewing the traditional financial performance indicators, you are also to review THE COMPANY’S past and current stock performance. Your report includes three parts: (1) An evaluation of THE COMPANY’S financial performance for the last three years. (See detailed description below) (2) An evaluation of THE COMPANY’S stock performance for the last one year. (See detailed description below) (3) Finally, a specific recommendation, with supporting rationale, as to whether or not THE COMPANY’S recent trend in financial and stock performance is of sufficient financial strength to warrant entering into a long-term commitment. To assist you in your task, the CFO has provided the following general guidance. Since it is recognized that the industry is undergoing a major contraction, it is very important to comparatively evaluate THE COMPANY’S financial and stock performance trends against its Industry or major competitor. SUGGESTED WEBSITES www.marketwatch.com -To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page. www.morningstar.com - To find the information for your company you need to type the stock symbol in the Quotes window to get into the company’s page. www.money.cnn.com -To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page. www.finance.yahoo.com - To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page. www.nyse.com – Click on Data, then click on Stocks (under Quotes), and type the name of the company or the stock symbol in the window “Keyword or symbol” to get into the company’s page. www.nasdaq.com - To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page. Company’s websites YOUR SPECIFIC ASSIGNMENT Using the information from the websites the students have to develop evaluation of the financial and stock performance for THE COMPANY (SELECTED BY INSTRUCTOR). (Totally 85% of the assignment grade) -1—Background and Industry (one short paragraph). -2—Analysis of the most significant financial performance results. (15% of the project grade) Select of most significant financial performance results for the company. Create a table that contains the THE COMPANY’S financial performance resultsfor the last three yearsand for the major competitor or industry for the last year: Revenue, net income, working capital, and other financial performance results of your choice. Present the table with this information in your report. Write about 1 page of the trend analysis of these financial performance results. -3— Financial ratio analysis. (15% of the project grade) Find financial ratios for the company for the last 1-3 years and its major competitor for the last year in the Internet. Present the ratios as the table(s) in your project. Write about 2 pages of analysis of the ratio results that you found. Compare the ratio results against the industry or main competitor. In your analysis you should answer the following questions: How liquid is the company? How is the company financing its assets? Is management generating a substantial profit on the company’s assets? -4- Evaluate Return on Equity for the company for the last three years using the DuPont analysis. (10% of the project grade) Taking the information from the Income statements and the Balance sheets, calculate the company’s net profit margin, total assets turnover equity multiplier, and return on equity using the DuPont formula for the company for three years.Show your calculation! ROE = Net profit margin x Total assets turnover x Equity multiplier = Net income/Sales x Sales/Total assets x Total assets/Common equity You can use Revenue instead of Sales. b. Compare the results to main competitor. For the major competitor you can use ratios from the Internet or calculate them for the last year. Write about 1 page of analysis of the results that you received. In your report please answer the question: If the management of the company would like to improve their return on equity, what should the management of these companies do? -5- Evaluate other areas of financial analysis: capital spending, Beta values, credit rating service valuations (if possible), bond rating valuations (if possible), etc. (10% of the project grade)