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5 page corporate report + ratio work sheet , for delta airlines company in 6 hours
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Corporate Report Assignment
Due April 15
Your final paper should include:
-5 pages double-spaced narrative. Papers over 5 pages will receive point deduction.
-Additional Pages:
-Graph of stock performance
3 year price history of company (with article marked), S&P 500, and a
benchmark company
-Bibliography. But you still need to cite sources in the body of your paper.
-Ratio Worksheets – fully completed. You will attach the same ratios that were
graded; any corrections that were indicated in the initial grading should be made.
-Headings and page numbers
-Labels for the ratios (example: times, %, days)
Format of Paper:
COMPANY BACKGROUND (½-1 page)
Include information like founding date, headquarters location, product or service
provided, date when first traded in public markets, market on which it trades, and any
other information that seems important for understanding the company.
FINANCIAL ANALYSIS (2-3 pages)
Discuss at least 8 ratios from the Ratio Worksheet that you feel explain the
trends/changes within the company over the time period. You will need to choose at least
one ratio from each of the overall categories (i.e. one from asset utilization, one from
liquidity, etc.)
Discuss all of the following for the ratios chosen:
-Has it improved, deteriorated or stayed the same over the last 3 years? Do not
use the words increasing/decreasing or higher/lower. Instead use better/worse or
improving/deteriorating. Explain whether the change in the ratio was a good
thing or a bad thing.
-What is the reason behind the changes in the ratio? Not just what part of the
ratio changed, but what was happening with the company that could have
affected the ratio? If you can not find specific news, what do you think was
affecting the ratio?
-How does it compare to the industry? At least one ratio from each category
should be discussed.
As you write your paper think about (These were top reasons I docked points in the past):
What are the ratios? This is a finance class give me numbers
What does the ratio mean or measure?
Discuss components (assets increasing but not as much as_____)
Discuss company specific things that might impact the component
Compare to industry or benchmark
After talking about ratios in a specific category, state how the company is doing in that
category of ratios. For example: Liquidity ratios measure the firm’s ability to meet shortterm obligations. Are you confident your company can meet their short term obligations?
Overall discussion of the company’s performance based upon the ratio analysis.
Although you don’t have to tell me every number you looked at you should include
plenty of numbers in your paper.
STOCK GRAPH (1-2 pages)
Analyze your company’s stock performance over the last 3 years. Comment on any
patterns you notice for your company and how it moves with the S&P500. When and
what was the high price/low price? Does this make sense with what you see overall in
your financial analysis? Discuss if the Beta of your company makes sense with what you
see on the graph (and your financial analysis.) If your company is too new that no beta
has been calculated, you will have to estimate what you believe the beta would be based
on the performance.
What was the price trend throughout the semester? Why did it move this way?
Discuss at least one news event found in an article from a business publication or journal
(i.e. Wall Street Journal, Business Week, or any article from library website) that
occurred in the 3 year time period you are evaluating. Summarize the article (more than
one sentence) and tell me whether you thought the stock price would increase or decrease
when investors heard this news; and then tell me what actually happened. Mark the date
of the article on your graph. The news event should be about the company not just about
the industry.
CONCLUSION (¼-½ page)
State what actions you think the company should take to become or remain financially
strong. The paper should end with a statement about whether you would buy, hold or sell
your stock in this company.
BIBLIOGRAPHY
All sources used should be referenced on the bibliography and throughout the paper.
FAQ on ratio worksheets & other tips
1. How do I find industry information?
A: I like the website http://reuters.com
1. Type on the magnifying glass in the upper right corner and type in your
company name.
2. The first thing that should pop is their ticker symbol. Click on it to pull up
stock data.
3. Click on the FINANCIALS tab (3rd from right)
4. Scroll down and you will find industry ratios for most of your ratios – it is
okay if you are missing a few
2. What are we supposed to put in the calculation column?
A: I would like to see the numbers that went into your ratio calculation for the most
recent year. You don’t have to show me your calculations for the other two years, just the
ratio.
3. What are we supposed to put in the trend column?
A: One or two word description of how the ratios are trending over the 3-year period.
Like better or worse, improving or deteriorating. Do not use higher or lower.
4. I am having trouble with the market value ratios.
1) What is price per share/market price per share?
A: This is your stock price. It is the top of every ratio in market value category.
Do a historical look up of stock price. I like yahoo finance.
http://finance.yahoo.com
1. Type in your company name in yahoo search bar
2. Click on Historical Data tab (3rd from right)
3. Change time period to 5 years and frequency to monthly
4. Pick stock price near time your financial reports were reported (eg.
Dec 2017, Dec 2016, Dec 2015) It doesn’t really matter if you pick
high/close/etc.
5. Market price per share in market book ratio is stock price – same as
other two ratios.
2) How do I find EPS (Earnings Per Share)?
A: Make sure you use a 10k statement or Morningstar. Http://morningstar.com
1. Type your company into the search bar to pull up ticker symbol/stock
info.
2. Click on Financials Tab (5th from left)
3. Click on “All Financials Data” at the bottom of the table
4. Scroll down on the income statement EPS is listed. I used the Basic
number.
3) How do I find Sales per share and book value per share)?
A: Similar to EPS above, make sure you use a 10k statement or Morningstar.
Http://morningstar.com
1. Follow steps 1-4 above under finding EPS but below the EPS is
weighted average shares outstanding. I use the Basic number
2. Sales per share = Sales/SO
3. Book value per share = Equity (from balance sheet)/SO
Company:
Ratio
Formula for Calculation
1. Short-term solvency, or liquidity, ratios
Current ratio
Current assets
Current liabilities
Quick ratio
Current assets – Inventory
Current liabilities
Cash ratio
Cash
Current liabilities
2. Long-term solvency, or financial leverage, ratios
Total debt ratio
Total assets – Total equity
Total assets
Equity Multiplier
Total assets
Total Equity
Cash Coverage Ratio
EBIT + Depriciation
Interest
3.Assets utilization, or turnover, ratios
Inventory Turnover
COGS
Inventory
Receivables Turnover
Sales
Accounts Receivable
Total Asset Turnover
Sales
Total Assets
Calculation 2017 Ratio 2016 Ratio 2015 Ratio Indsutry Average Trend Analysis
4. Profability Ratios
Profit Margin
Net Income
Sales
ROA
Net Income
Total Assets
ROE
Net Income
Total Equity
5.Market value ratios
Price Earnings Ratio
Price-sales ratio
Market-to-book ratio
Price Per Share
Earnings per share
Price Per Share
Sales Per Share
Market value per share
Book value per share

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