Companies chosen are McDonald's and Burger King FIN3010 Principles of Finance FINANCIAL ANALYSIS PAPER Objective: Familiarize students with the...

Companies chosen are McDonald's and Burger King

FIN3010 Principles of Finance

FINANCIAL ANALYSIS PAPER

Objective: Familiarize students with the application of ratio and trend analysis. 

This project allows students the opportunity to perform critical thinking, by addressing specific financial trends and industry comparisons for a company of their choosing. This project will be a comparison/contrast paper that shows a demonstration of the application of financial analysis and critical thinking in a large organization. The student will be performing trend analysis and industry comparisons on 3-4 years worth of financial statement data (whatever tells the story). 

Trend Analysis & Ratio Analysis

Ratio analysis uses percentage or decimal calculations of comparison to at least two different sets of financial data. You are comparing how one relates (compares) to another. Decision makers use ratios because they illuminate relationships between financial data taken from the company's statements. 

Although ratio analysis can be used to evaluate financial performance, the number, by itself, does not reveal the entire story. To take the analysis to the next level, one must engage in trend analysis. Trend analysis utilizes the aforementioned ratios and shows the changes in those ratios, over time. Stakeholders can use trend analysis to not only compare "this year" to "last year" for this company, but can compare each year to the industry as a whole and even to the number one competitor for benchmarking purposes.

When you are setting up your paper, it would help to group your ratios and analysis together by content area (profitability, debt management, asset utilization, liquidity, and market value ratios).

Deliverables

Choose a publicly traded, publicly held, U.S. company. This means you need to pick a company that is public and has stock that trades on the exchange.