Throughout this course, you will prepare a comprehensive financial analysis and proposal (excluding tables, figures, and addenda) that will demonstrate your understanding of key financial concepts, strategies, and practices. After selecting a company to profile, you will construct a comparative financial analysis of your selected company’s financial position with that of a prime competitor, for example, Amazon and Netflix, Microsoft and Oracle, or Bank of America and JPMorgan Chase & Co. Following the nine-step assessment process detailed in Assessing a Company’s Future Financial Health, your financial analysis and proposal will be composed of four separate component assignments in Topics 2, 4, 6, and 8.
Financial Analysis and Proposal Assignment: Overall
In this topic, you will select a publicly-traded company and a chief competitor and submit both names to the instructor for approval by the end of the topic. Note: You will need to have this step finalized before you can complete the assignment detailed below, so it is in your best interest to select and obtain approval as soon as possible.
In your selection process, consider only a company and competitor that are both publicly-traded and which enjoy extensive analytical coverage to ensure access to sufficient financial data to complete this four-part assignment successfully.
As you develop your analysis, research the market at each step for relevant data on your chosen company/competitor, including financial reports and market information. Disclose all assumptions you set forth (e.g., revenue growth projections, expense controls) and provide supporting rationale and quantifiable evidence behind those assumptions. As your financial analysis and proposal develops over the span of the course, you will synthesize the analytical and research data and outcomes of the nine-step assessment process in order to assess 1) the long-term financial health of the chosen company, and 2) the suitability in recommending the company (versus the competitor) as a long-term investment opportunity.
Financial Analysis and Proposal Component 1: Analysis of the Fundamentals
For this assignment, apply the first two steps of the nine-step assessment process detailed in Assessing a Company’s Future Financial Health (i.e., Step 1: Strategy and Step 2: Revenue Outlook) to compose a comprehensive overview of the company/competitor pairing you’ve selected and which has been approved by your course instructor. Use the “Analysis of the Fundamentals” resource provided in the topic materials to present your findings as per below:
- Using the most recent U.S. Securities and Exchange Commission (SEC) 10-K reports for your company and chosen competitor, provide a brief yet succinct comparative analysis for a) the business overall, b) products and services, c) customers, d) goals, e) strategies, f) market positions, g) general risk factors, h) quantitative and qualitative market risk factors, i) competitors, j) competitive technology, k) regulatory considerations, and l) operating characteristics. Use the “Analysis of the Fundamentals” resource provided in the topic materials to present your findings.
- Download most recent annual financial statements for your company and chosen competitor (i.e., balance sheets, income statements, and statement of cash flows). Perform a ratio analysis on the current financial reports, interpret the results, and provide a brief discussion regarding the overall revenue outlook. To successfully complete this assignment, please show all ratio analysis calculations.
Note: You will be required to re-submit this assignment, revised to incorporate all instructor feedback, along with the other three component assignments as one comprehensive submission in Topic 8. To save time later in the course, consider addressing any feedback soon after this assignment has been graded and returned to you.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
You are required to submit this assignment to Turnitin. Please refer to the directions in the Student Success Center.
FIN-650-RS-Analysis of the Fundamentals.docx
Complete the following problems from Chapters 2 and 3 in Financial Management: Theory and Practice:
Topics: Balance Sheet, Income and Cash Flow Analysis, Free Cash Flows
Problems: 2-4, 2-11, 2-12
Topics: DuPont Analysis, Balance Sheet Analysis, Comprehensive Ratio Analysis
Problems: 3-1, 3-6, 3-7, 3-8, 3-12, 3-13, 3-14