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As the new financial manager of your company, the CEO has asked your team to provide a brief analysis of the company's performance to present at the...
As the new financial manager of your company, the CEO has asked your team to provide a brief analysis of the company's performance to present at the upcoming board of directors meeting. The CEO has asked that you assess the company's performance against your company's industry. Sound like I need to use ratio analysis or other techniques to determine areas in which the company is doing well, as well as areas that management should look at.
Here are the steps for the project:
1. Select your teammate. Each team should be made up of two or three members.
2. Determine which company you will analyze for the project. Your selection may be subject to your professor's approval. The company that you select will likely be used for all four team projects. As such, be sure that the company has debt on its balance sheet, as this will be a requirement for future projects.
3. Go to the website for your company and download the 10-K report for the most recent year.
4. Perform your ratio analysis on your company:
a. A good place to start would be to perform a complete DuPont analysis of the company. The DuPont analysis might provide guidance as to what particular areas of the company should be examined next and what ratios should be calculated. Be sure to include ratios that cover the following areas:
ii. Debt Management
iv. Asset Management
v. Market Value
b. In addition to the DuPont analysis ratios, be sure to present and discuss at least six relevant ratios that your team feels may best assess the company's performance.
c. Prepare the same ratios that your team prepared above, but this time for the prior year.
Provide an analysis that compares your company's current year ratios to its prior year ratios. There is no need to explain the purpose of the ratios.