Foundation of Financial Management

Due by 11:59 pm! Will provide template for Part 1.

Part 1:

Complete the following on the template provided:

1. Complete the balance sheet and income statement for XYZ Corporation.
2. Calculate the ratios for XYZ Corporation, using the income statement and balance sheet completed above.
3. Complete the ratio analysis using cross-sectional analysis and trend analysis for Company J, using the market data in the template.

Part Two:  Company Financials Research

Select a publically traded company. Go to the company’s Web site. Try one that you are familiar with—you shop at their store, eat at their restaurants, or wear their clothes.

On their Web site, try to find their annual financial report. Sometimes, these are found under “Investor Relations”.

If you cannot find the annual financial report on the company’s site, conduct an Internet search. One good source is Yahoo! Finance.

Required:

For the company you selected, describe your company’s operations and the market in which it operates. Search for the EVA, and free cash flow using the firm’s annual report. Define their respective meanings and how your firm is performing in these areas. Indicate the firm’s ROA and ROE and explain the difference between the two measures. You must submit documentation showing how answers were reached.

Note the following for your report:

EVA=EBIT (1-T)- (Total investors capital x after-tax cost of capital)

Free Cash Flow = EBIT(1-T) + Depreciation - (Capital Expenditures+ Increase in Net Working Capital)