This course project requires you to download a company’s most recent 10K report and do a comprehensive financial statement analysis in excel. The curse include the following analysis:
(1) Pick one company from the Dow Jones Industry Average Index (Goldman Sachs)
(2) Write a brief introduction of the company. Identify two competing companies. (Competitors do not need to be on Dow Jones industry average index)
(3) Obtain your 10K report for your company and the competitors from SEC and Edgar (https://www.sec.gov/edgar/searchedgar/companysearch.html) or other sources (such as Bloomberg) and do a comprehensive financial statement analysis in excel . You can use the interactive mode to download the financial statements in excel. (Here is a YouTube video that shows you how to obtain 10K report of a company: https://www.youtube.com/watch?v=3owcO0vu7rQ)
(4) Perform a detailed financial statement analysis in excel:
4.1. Profitability Analysis (module 3): calculate and compare the ROA, ROE and RNOA for your company and the competitors. Use Dupont Analysis to break down ROE into profit margin, asset turnover and financial leverage and make a comparison between your company and the competitors.
4.2. Asset Recognition (module 6): Find the following information about your company as well as the competitors:
a. Inventory Method
b. Depreciation and Amortization Method
c. Calculate the following ratios and compare them among your company and the competitors:
Inventory turnover, PPE turnover, PPE percent use
4.3 Equity Recognition (Module 8): find the following information about your company and the competitors
A. Total shares and dollar amount of stock issuance
B. Number of shares bought back and value of those shares.
C. dividend payments for the past fiscal year.
4.4. Credit Analysis (Module 4):
a. Calculate the following ratios and compare them among your company and the competitors.
Current Ratio, Quick Ratio, Total Liability to Equity, Total Debt to Equity, Times Interest Earned Ratio, EBITDA Coverage Ratio, Cash from Operation to Total Debt Ratio, Free Operating Cash flow to Total Debt Ratio.
b. The credit rating from at least one of the credit rating agencies for your company as well as the competitors.
C A brief discussion about your company’s liquidity risk and solvency risk compared with its competitors.
4.5 Forecasting (Module 11): forecast your company’s next year income statement based on the following assumptions: assume the revenue will grow by 2%, the operating expenses are assumed to maintain the same percentage out of revenue, and non-operating items are assumed to be the same amount. This does not need to be done with competitors.
4.6 Equity Analysis and valuation (Module 15): using the competitors’ book value multiple and net income multiple to estimate the equity intrinsic value and equity intrinsic value per share of your company
(5) Write a paper summarizing all of your analysis. Please also submit your analysis and calculations in excel.
For the details of the project, you can also review the video recording as attached.
Thanks and please let me know if you have any other questions.