- Each group should select a single company (e.g. Proctor & Gamble, General Electric, Johnson & Johnson, Intel, and Apple Computer) with easily accessible public information concerning its financial statements as well as information on its business overviews, financial statements, common stock, and bonds. Team work is strongly encouraged and students have the choice of forming a small team with 3-5 members. Of course, you also have the choice of working independently if you prefer.
- Provide a brief description and history of the company, and analyze its competitive position and growth opportunities.
- Business Description:
- Provide a brief description of the firm’s business.
- Identify the business segment within the industry (i.e., telecommunications equipment, semiconductor, software)
- Identify whether the subject firm is producing end-product or component.
- Identify the primary revenue sources for the firm (i.e., license fees, products sales, service revenue).
Industry Analysis:
- Provide an overview of the industry drivers, including key risk factors and key success traits.
- Industry risk factors are generally those out of the direct control of management. For example: high threat of new entrants, significant buyer power, increasing government regulation, rapidly changing technology.
- Analyze your firm’s competitive position and growth opportunities.
Accounting & Financial Analysis
Historic Financial Analysis
- Analyze quarter-to-quarter performance that reflects the operating trends.
- Does the firm’s historic financial performance support management’s future goals and strategies for the business?
- Has the financial statement changed as a result of planned goals and strategies or for other reasons?
- Is the firm’s historic financial performance in line with the industry norms?
| Template for Fiscal Year Ended | 4Q2019 | 1Q202020 | 2Q2020 | 3Q2020 | 4Q2020 | Industry / Peers |
| Net Revenue | ||||||
| Gross Margin % | ||||||
| SGA % | ||||||
| Operating Income | ||||||
| Net Income | ||||||
| Leverage / Debt Ratio | ||||||
| Working Capital | ||||||
| Current ratio Quick ratio | ||||||
| Inventory turnover ratio | ||||||
| ROA, ROE, ROI |
Income Statement Analysis
- Discuss revenue recognition policies and compare them to industry practice.
- Discuss recurring revenue generation variability during the year or even during quarterly periods. Highlight any risks inherent in such variability.
- Gross margin deterioration tends to be an early warning sign of trouble ahead for technology companies – discuss if appropriate.
- Discuss changes in trends; unusual or extraordinary items
- Analysis by business segment
Balance Sheet Analysis
- Identify off-balance sheet exposure and identify impact to leverage and repayment.
- Discuss access to a variety of capital markets segments to support business plan assumptions about need for growth capital.
- Major changes in assets/liabilities
- Significant trends in liquidity, working capital and balance sheet ratios. Analysis by business segment
Cash Flow Statement Analysis
- Amount of cash generated; Use of cash receipts
- Availability of funds to finance capital expenditures, expansion of business activity, dept repayment or future dividends.
- Earnings and/or asset quality
Financial Ratio Analysis
- Analyzing your firm’s financial statements for the most recent three years. Compute your firm’s Current Ratio, Quick Ratio, Account Receivables Turnover, Total Asset Turnover, Inventory Turnover, Fixed Assets Turnover, Gross Profit Margin, Operating Profit Margin, Net Profit Margin, Return on Total Assets, Return on Common Equity, Debt to Equity Ratio, and Interest Coverage. For the same years, use ratios from either the industry or a similar firm as a benchmark for comparison.
- Compute the Weighted Average Cost of Capital (WACC) of the firm, taking into consideration of costs of equity, debt, and preferred stocks.
- Using Free Cash Flow (FCF) approach to equity valuation, compute the value of your firm’s common stock. Compare your calculated value to the current price. From the viewpoint of an investment / security analyst, evaluate the common stock of your company as a potential investment for your clients.
- For your firm’s common stock, collect the Friday closing price for the last 12 months and compute the weekly percentage price changes (ignoring dividends) and the standard deviation (s) of these weekly rates of return. Do the same for a market index, e.g., the Standard & Poors 500 index, QQQ, or DASDAQ. Plot the computed returns on a graph and use least-squares regression to construct a line of best fit. The slope of this line is an estimate of the beta for the stock.
- Prepare a brief description of at least one bond for your company, including such factors as its credit rating, bond’s call feature (if applied), collateral, interest dates, sinking fund provisions, and refunding provisions. Note: bond information can be found on yahoo finance (bond), E-trade. Also you can try NASD or Bloomberg websites for bond information.
- Bond Valuation: Using current price and information on coupon interest and maturity date, compute a yield to maturity (YTM) for your company’s bond. Compute the duration for your company’s bond.
- Discuss / describe how the firm achieves consistent revenue and earning growth through the uses of financial options / derivative tools / off-balance sheet financing (e.g. foreign exchange hedging, interest rate risk management, and off-balance sheet financing like joint partnership). Off-balance sheet exposure may be substantial for certain technology companies (including high-tech and bio-tech firms) due to standby letters of credit or synthetic leases. Identify off-balance sheet exposure and identify impact to leverage and repayment. Hint: See Annual Report of the firm.
- Prepare a typed group report (< = 15 pages)including all of the items listed above. Summarize and organize your data so that it is easy to follow. The individual tasks involved in this project should be allocated among the members of your group as equally as possible. However, it is very important that each group member understands each part of the project in order to benefit fully from this assignment. The preliminary deliverable (PowerPoint slides) is due 14th session.
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So, there is an Applied Financial Analysis & Security Research Course Project / Corporate Security Research Paper expected to be completed for a Seminar in Investments Finance MBA class. It is a group project and divided into 4 parts. I have my section highlighted in Yellow in the Full Instructions Word Document File titled “Course Project – Applied Financial Analysis & Security Research FULL INSTRUCTIONS” and pasted below.
Financial Ratio Analysis
- Analyzing your firm’s financial statements for the most recent three years. Compute your firm’s Current Ratio, Quick Ratio, Account Receivables Turnover, Total Asset Turnover, Inventory Turnover, Fixed Assets Turnover, Gross Profit Margin, Operating Profit Margin, Net Profit Margin, Return on Total Assets, Return on Common Equity, Debt to Equity Ratio, and Interest Coverage. For the same years, use ratios from either the industry or a similar firm as a benchmark for comparison.
- Compute the Weighted Average Cost of Capital (WACC) of the firm, taking into consideration of costs of equity, debt, and preferred stocks.
PLEASE SEE THE FULL INSTRUCTIONS FOR THE FULL EXPLANATION ON THE COURSE PROJECT.
There is also a sample project shared with the class uploaded titled “Course Project 1” shared by the professor. It was originally written by an undergraduate student but I’m requesting 100%, A-Rated, graduate level writing.
The company selected by my group is Taiwan Semiconductor Manufacturing Company (TSMC). The link on the Taiwan Semiconductor Manufacturing Company (TSMC) is below and you can retrieve further information on it online.
I have an excel sheet with the required Calculations and Computed Information of TSMC’s Financial statements. Some of the information was simply transferred to the excel sheet from various online sources. I have the links of multiple of where I retrieved the information from. There should be 13 required Financial Ratios specified for the Analysis. The Microsoft Excel File also contains Industry Averages retrieved through various AI Tools.
Using the Financial Ratios Information I created 6 Excel Charts comparing the Financial Ratio Information over the period of three years making sure to include a comparison of the Industry Averages (i.e. industry averages over the three-year period are included as well).
I have also uploaded two DOCX Files. One contains the Microsoft Excel Charts Pasted onto the Word Document File. The other DOCX File Contains the Financial Ratio Data in Microsoft Word Table. The Financial Ratios are also labeled.
First, there are the liquidity Ratios, then the Efficiency / Turnover Ratio, Profit Margin (%), Profitability Ratios (%) and then there are the Leverage Ratios.
Next There is a WACC Calculation, using real word data on TSMC (Taiwan Semiconductor Manufacturing Company).
What I need help completing is the written analysis of the Financial Ratio Analysis section with connections to Finance for a Seminar in Investments Finance Class. I would like better quality work than what the professor provided. You can reference the “Course Project 1” PDF. It has a written Analysis section on 1) Liquidity Ratios, 2) Financial Leverage Ratios 3) Debt to Equity Ratios 4) Interest Coverage Ratio 5) Management Efficiency Ratios & 6) Profitability Ratios on “Proctor & Gamble”
I also need a written Analysis on the WACC (Weighted Average Cost of Capital) Calculation like much like the sample.
Take the Column & Bar Charts from the Word Document Files and paste them either above or below the written financial analysis for each section. Paste any of the Microsoft Word Tables as you see fit.
The Course Project needs to have a typed page count greater than or equal to 15 pages. I will begin by placing an order for 2 pages for my section of written/typed information. If the group decided that we need more writing, I will pay for a third page. But if you, the writer, thinks that I need a third page for you to convey all of your thoughts I’m ready to pay for a third page now.
Feel free to reach out to me with questions at any time. Also, Please include Page # or Paragraph # in Parenthetical In-text citations along with year of the publication/source.
