Application report | Business & Finance homework help
Length and Format: Prepare a 5-page report using proper APA writing style, proper in text citations, and include: Cover Page, Body, and Works Cited Page. Topic: Ratio Analysis. The Ratio Analysis (aka Fundamental Analysis) Application Report will ask you to conduct a financial ratio analysis of two corporations of your choosing. Imagine that you are a Financial Analyst who was asked by the Chief Financial Officer (CFO) of your company to recommend an investment in either the common stock of a competitor in your industry, or a company that supplies goods to your own firm. Your CFO intends to strategically invest $10 Million into the common stock of an outside company. The CFO will use your analysis to select the company in which to invest. Assignment: Write a Report. Prepare a report that focuses strictly on demonstrating the efficiency and effectiveness of your target firms by comparing management teams over a 3-year period using ratio (aka fundamental) analysis. Conduct a fundamental analysis (aka ratio analysis) of the companies, and recommend one of them. Explain which company represents a superior investment choice over the other based upon your analysis. ** Both of your target firms should operate in the same industry and business sector as one another. Meaning compare 2 banks, or two technology firms, or two auto makers, etc.** Use the income statements, balance sheets, and statement of cash flows of your target firms to find data for your analysis. Write the body of your report according to the format below (cite at least 3 outside sources, inclusive of the course text): 1. Write a brief but thorough Industry / Sector Outlook 2. Perform Ratio (Fundamental) Analysis of the two firms you’ve selected (***see below***) 3. Based on your comparative analysis, why has one firm been more successful than the other? 4. Which senior management team is more effective and efficient in running the respective corporations over the last three years? 5. Finally, which firm do you recommend for the investment? Page 2 of 2 Ratio / Fundamental Analysis. Report, and/or calculate, the following financial ratios that you have learned in previous course units: • Two Liquidity ratios with interpretation • Two Asset Management ratios with interpretation • Two Debt Management ratios with interpretation • One or two profitability ratios with interpretation • One or two Market Value ratios with interpretation Describe the significance of these numbers- What do they tell us? You should provide a 3-year benchmark and trend analysis of each ratio for each firm and compare it to the industry average. Present your ratio analysis in a MS Excel data table (columns and rows). *Extra credit will be granted if you generate proper charts and/or graphs that provide context and clarity to your analysis
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