Calculation of return on equity using the dupont system

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Evaluation of Corporate Performance

The Final Project will involve applying the concepts learned in class to an analysis of a company using data from its annual report. Using the concepts from this course, you will analyze the strengths and weaknesses of the company and write a report either recommending or not recommending purchase of the company stock.

Research Tip: The "Mergent" database in the Ashford University Library contains company profiles and financial information for publicly traded companies and their competitors.  To access this database enter the Ashford Library and select "Find Articles and More" in the top menu panel. Next, select "Databases A-Z" and go to section "M" for "Mergent". For help with using Mergent, use Mergent Online Quick Tips.

For help with reading an annual report access this handy guide from Money Chimp.

The completed report should include:

1. An introduction to the company, including background information.

2. A complete and thorough financial statement review.

3. Pro Forma financial statements (Balance Sheet and Income Statement) for the next fiscal year, assuming a 10 percent growth rate in sales and Cost of Goods Sold (COGS) for the next year.

4. Complete ratio analysis for the last fiscal year using at least two ratios from each of the following categories:

a. Liquidity

b. Financial leverage

c. Asset management

d. Profitability

e. Market value

5. A calculation of Return on Equity (ROE) using the DuPont system.

6. Assessment of management performance by calculating Economic Value Added (EVA).

7. A synopsis of your findings, including your recommendations and rationale for whether or not to purchase stock from this company.

Reference no: EM131163509

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