Reference no: EM13488842
Students will be required to pull information on 2 publically traded companies in the same industry from the SEC Edgar Online Database for 2 years each (you will learn how to do this in class on April 25th). Students must hand in the following:
a) calculations either by hand, in word, or in excel (if in excel, you need to clearly show me the calculations without me having to click on a cell to find your formula) for AT LEAST 5 financial ratios (from Chapter 13) over 2 years for each company. They must be ratios to fulfill this requirement and NOT horizontal analysis. You can also do horizontal analysis if you want to make your paper better but it is not part of the requirement. Since this assignment must be submitted online, you can do it in an Excel file and upload it here, take photos and upload the work as a jpeg, submit it as a Word document, or use a scanner to scan it in. There is a lot of technology available to be able to do this. If those files are too big to attach, send them to my email at [email protected] before the due date.
-That means for each company, you have 5 ratios for each of the two years. Therefore, you hand in 20 ratios that you calculated: 5 for Firm A in 2010, 5 for Firm A in 2011, 5 for Firm B in 2010 and 5 for Firm B for 2011.
-The ratios need to make sense. If I am doing an accounting firm, it would not make sense for me to calculate inventory turnover since they are not a manufacturer.
-The firms need to be currently traded as of 2010 and 2011.
-You may not use firms that do not file 10-K financial statements such as certain foreign firms that use IFRS. You must use firms that file in accordance with U.S. GAAP.
b) copy of the companies' financial statements from their annual 10-ks where you highlight the numbers you used for your calculations in a). The numbers must be highlighted that you used in your calculations in part A. You can upload this as a Word document, a PDF, a photo, or scan it in. If it is too big to upload through this assignment link, you must email it to me at [email protected] before the deadline.
c) a 2-5 page report that is double-spaced with 12 pt. Times New Roman Font and normal margins.
In the written component that you hand in, you must i) tell me what you found when you calculated your ratios, ii) tell me which company is in better financial shape, and iii) make a recommendation if you would invest in one, both, or neither of the companies. Your recommendation must be supported by your calculations. You may use outside information as long as you also include the required components above and cite properly. The actual written part must be well written and cohesive.
Failure to hand in all the requirements will result in loss of points. We will discuss how to find publicly traded companies, how to find competitors in an industry, and how to pick good ratios to calculate in class on April 25th. I will put up a thread in Blackboard on the Discussion tab that will automatically open on April 25th at 4 pm where you can pick your firms. If will be first come, first serve once I put up that thread. Once a firm is picked, no one else may use that firm. You are responsible for checking the thread and making sure your firms are available, as well as checking on the SEC website if they are traded as of 2010 and 2011, and file their 10-Ks in accordance with GAAP. You will have until May 5th to claim your firms and verify all the information is there for you to do your calculations. If you change firms after that point, there will be a minimum 10 point loss. Therefore, check to make sure the information is available before claiming your firms. If you need help picking firms, please come see me. If you use a ratio that requires you to calculate an average, you may also need to pull up the prior fiscal year's statements.
Make sure you have at least 3 attachments when you submit: your ratios, the highlighted portions of the financial statements from the 10Ks where you got your numbers, and your write-up. If they do not attach here due to size issues of your files, make sure you submit your write-up through this link and whatever doesn't fit send to [email protected] . Everything must be handed in before May 7th at 9 am. Anything handed in after that will not be accepted and you will not get credit for that work that was not submitted by the deadline.
You will be graded on: submitting the three required parts that you must give me (the calculation of the ratios, the highlighted financials, the write-up), the quality of your write-up (what you found when you calculated your ratios, which company is in better financial shape, would you invest in either company, one of the companies, neither of the companies), and your ability to communicate what you found.