Financial Management PowerPoint Slides Need Company: Target Fiscal Year 2018 & 2019 The following BOLDED sections for this assignment need to completed: COMPANY INTRODUCTION

Financial Management PowerPoint Slides Need Company: Target Fiscal Year 2018 & 2019 The following BOLDED sections for this assignment need to completed: COMPANY INTRODUCTION
FIN 3400 Final Group Project Instructions The purpose of this project is for your group to act as a financial analyst firm and express your opinion about a publicly traded company of your choice for investment purposes. In order to do that, you must analyze the company’s financial statements (that you learned about in chapter 2 and chapter 14). You may look at financials from any time period, but I recommend you use financial statements for the Company’s most recent two fiscal years as your main source (their annual report or the 10k from the SEC’s website). Look at the Company’s competitive environment, and how the events in the respective industry and the rest of the world will impact the Company’s financial performance and viability going forward. Remember, the Company’s operational and business results are expressed with financial statements. Consequently, financial information and figures that you will see in front of you happened for a reason, and you need to explain to the best of your ability what those reasons are, and based on the business events and the subsequent figures, your justification to either recommend to invest or not to invest in the stock of this company. Remember, that all investment decisions are forward looking. Meaning while you have the financial information as point of reference, you must be able to use the financial information to determine the Company’s financial performance in the future. If you want to look past the fluff, (fluff free financials) use the financial statements (i.e. 10K) from the sec.gov website using EDGAR database. Recommended Format of the Project (can be in PowerPoint) Introduction (should be short section, 3 slides at most) The first part of your presentation should state if you have decided to recommend investing funds in the Company stock or reject the stock. The investment decision is the first stated major information due to the fact that as an analyst you are preparing a product (report) for an audience, and the audience needs to know the most important information first, the investment decision. This should be followed by the Company’s general “identification” information: Name, headquarters, year it was founded, most recent stock price, 52 week high/low/ price, number of outstanding shares, market capitalization, number of employees, and other information that you believe is pertinent to your evaluation. You can look at the 10K, annual reports, company website, Yahoo, etc. ONE SLIDE IS GOOD HERE. Additionally, you need to describe the Company. What does it do? (Don’t spend too much time explaining each line of product). BRIEF history and major recent events (acquisitions, mergers, change of management, major good or bad news). You can describe the Company’s competition and business environment if you wish (not required). What is the competitive environment like? Who are their competitors (important for comparison data)? What is the company doing to combat competitors? Is the environment favorable (defense contractors during wartime) or unfavorable (homebuilders during a recession)? This is the classic top-down approach to analyzing finance. You start with the big picture (the industry, the environment) and move down to company specific financial information, which are directly or indirectly impacted by big picture events. DON’T SPEND MORE THAN TWO SLIDES ON THIS. Financial Section The main part of your presentation, the analytical evaluation of the Company, should be divided into three parts PROFITABILITY You will use the income statement as your primary source for this section. Simply tell me how the company has performed over the years, with emphasis on the last two fiscal years. You start at the top line (revenue/sales) and work you way down to the bottom line (net income). Remember, a number is just a number; you have to use it as your starting point to understand the story behind that number. Compare the company’s prior year income statement to get an idea if things are going up or down. Also compare it competitor’s performance. Make full use of ratios you learn in chapter 14. Explain the underlying reasons behind the trend of numbers. Why did sales go down? Why did expenses go up? A good starting point is the Management’s Discussion and Analysis of Financial Condition and Results of Operations in the annual report. This is a government required section in the annual report, where the management must tell you what has happened to the company and why. But they are paid to put a good spin on things, so don’t just take management’s word for it. Do your own research to support your conclusion. Remember, most of the time you will not be able to find a conclusive answer. Don’t be discouraged. As an analyst you must come up with a conclusion based on limited information provided. Tell me why do you think, based on some supporting information, revenue and expenses went up or down. Present data on major line item figures and compare them to at least one of their major competitor’s performance. CASH FLOW AND LIQUIDITY Now that you have established the company’s operating performance, move on to the cash flow statement you learned about in chapter 2 and figure out how much cash the company operations generated, how much it invested, and how it was financed. I need you to discuss the operating, investing, and financing sections of the company’s cash flow statement. What about free cash flow? Remember, generally the more free cash flow (cash is king!) the more immediate liquidity and financial flexibility. Now look at the company’s overall liquidity position. How much cash does it have? Is it increasing or decreasing? Use ratios like the current ratio, quick ratio, cash ratio (p 429). But also take a closer look at those ratios. A current ratio with a lot of cash could be a better alternative than a strong current ratio relying on questionable inventory and accounts receivable. What potential future events could require cash (if you read that the company is going to make acquisitions of $10 million in the next two years, but it has only $2 million in cash on its balance sheet, where will it get the rest of the cash? Is it going to borrow? In that case, is it able to sufficiently repay the debt?) I WANT AT MINIMUM, TO SEE THE OPERATING, INVESTING, AND FINANCING CASH FLOWS FOR at least THE LAST TWO YEARS. At the end of the day, the value of any investment is determined by its ability to generate cash. Has your company generated cash and will it continue to generate cash going forward? CAPITAL STRUCTURE AND FINANCIAL LEVERAGE Use the company’s balance sheet to describe the different forms of liabilities it uses, make sure to break down the company’s debt. Is the debt increasing or decreasing? Does the company have enough operating cash to pay maturing debt (remember, maturing debt is most important, because the same way you need money to pay only the mortgage payment that is due and not your entire mortgage balance, a company is relatively OK as long as it can pay the debt that is due in a particular year rather than its entire debt.) Use the debt ratio (p 431) to show what portions of assets are financed through debt rather than equity. Use the times interest earned ratio (p431) to show the number of times over a company has its interest obligation covered by earnings before it pays interest and taxes. Use the cash coverage ratio which shows how well the company can generate cash to meet its financial obligations. Does it sound like the company is going to assume more debt in the future? (You have to read between the lines. A company that hints that it’s going to buy other companies but doesn’t have the cash on its balance sheet is indirectly telling you that it will borrow more money or raise equity from investors to finance such spending) More debt could mean less cash for investors, which could ultimately impact the stock price. ). In this section, tell me what kinds of debt do they have? Do they get their financing from loans? Bonds? Selling common stock? Preferred stock? A combination of these? In other words, list where their primary financing comes from. Tables In addition to the information presented above, you will provide the following slides. The first slide, titled SELECTED FINANCIAL DATA, which has the most important financial numbers from the last two years. This could be information from the main financial statements. From IS you could include revenue, gross profit, operating profit, interest expense, EBITDA, and net income. From SOCF you include operating cash flow, investing cash flow, financing cash flow, and change in cash. From the BS, assets, cash and cash equivalents, liabilities, total debt, shareholder’s equity. If you feel other numbers are significant for your particular company, feel free to include them as well. The second slide, titled KEY RATIOS, should have all relevant financial ratios for the last two fiscal years that you have calculated for the purpose of the project. To earn the max points, apply 10 relevant ratios we learned in chapter 14 to support your conclusion. Conclusion The purpose is to summarize all of your findings. You can include a summary of what they do, its income performance, its cash flow ability, its overall financial position (balance sheet). Also include non-financial factors that you think impacts the assigned investment decision. Conclude with your final recommendation. If the company is rated by one of the major risk rating agencies, Standard and Poor’s, Moody’s, or Fitch Ratings, include the rating that has been assigned by those parties, or if you can find another 3rd party rating from an analyst on the stock include this. I know this may not be as easy to get, so just a marginal point total is earned here. The last slide should list your references where you retrieved the financial statements. The purpose of the conclusion is so the audience can quickly understand what your company does, what its financial condition is, and what investment decision has the analyst assigned for the company. When you present your project, you will upload a copy of your PowerPoint presentation including a link in your reference slide at the end to where you sourced the most recent two fiscal years’ financial statements the actual 4 financial statements, or the entire annual report) Only one member of your group needs to upload your findings with a PowerPoint presentation, but make sure all the names of the contributing members are listed somewhere on the slides. Even though only one member needs to upload the presentation, every member needs to post in the comments section of the assignment a rating from 1-10 peer review of each of their teammates. Grading Rubric COMPANY INTRODUCTION 10 POINTS FINANCIALS 110 PTS PROFITABILITY 35 POINTS COMPARISONS FROM YEAR TO YEAR 10PTS COMPARISONS TO COMPETITORS 10 EXPLANATION OF TRENDS 15 CASH FLOW AND LIQUIDITY 35 POINTS State $ OP, INV, FIN CASH FLOWS 30 EXPLAIN TRENDS & USES OF CASH 5 CAPITAL STRUCTURE (see directions) 40 POINTS LIST SOURCES OF DEBT 20 LIST CAPITAL STRUCTURE 20 (Stocks, bonds, preferred stock) SELECTED FINANCIAL DATA (END) 50 POINTS TABLES WITH SELECTED DATA 10 KEY RATIOS (min 10) 40 (include trends/comparisons to other companies, industry) CONCLUSION 20 POINTS SUMMARY OF FINDINGS 10 RECOMMENDATIONS 6 3rd party ratings 4 Peer Review. Rate yourself & your teammates On a scale of 1-10 based on how you thought they contributed to the project. Post your rating listing each person’s name with the rating beside it in the comments section in Blackboard assignments. 10 POINTS __________ 200 TOTAL Group Members ______________________________ ______________________________ ______________________________ ______________________________ ______________________________