Information
– Collect and attach 3-5 years of financial data, Financial statemen
Information
– Collect and attach 3-5 years of financial data, Financial statements – Balance Sheet, Income Statement, etc.
– Horizontal and Vertical Trend analysis. Look at the numbers year over year and within the year itself. – Identify trends and comment on them.
– Industry and competitor ratios.
– Ratios compared for the numbers to date as well as against the forecast.
– Ratios compared to the industry and competition. Identify 2 key competitors and compare their financial ratios to your company’s ratios. What trends do you see?
– Current CAPEX investments – NPV, IRR, Payback. (Only if available)
– Working Capital analysis. Cash cycle analysis. Short-term financing analysis.
– Weighted average cost of capital (WACC). How is their WACC affecting their operations? Their valuation?
– Capital Structure analysis. How is the existing capital structure affecting their WACC?
– Dividend policy (Payout ratios, trending of payouts etc.)
– Risk analysis, Volatility. (Only if available)
– Technical analysis for the last year. Any significant movements. (optional)
– Analyst ratings.
– Recommendation on whether to invest in the company.
Use this template. You can add a paragraph or 2 to it if necessary
1. Introduction: In this part, introduce the company and write about the products it offers and the industries it operates in.
2. Competitors: Write about its competitors (top 2 only). If available, write about each company’s market share, stock price levels, etc.
3. Horizontal and Vertical analysis: (This is for 3 years of data for the income statement and balance sheet, and statement of cash flows) Identify trends that you observe with 3 years of data. Have sales increased or not? If sales have increased, how about COGS? SG&A?
4. Ratio analysis: Analyze the ratios. Write about how your company’s ratios compare to industry ratios. Are they ahead or behind? What areas of improvement exist? Review and analyze the liquidity ratios, asset management ratios, debt management ratios, and profitability ratios.
5, Capital structure: Write about the current capital structure and how it has changed over the 3-year analysis period.
6. Capex: How much have they invested in new projects? What is expected from these projects? How is the investor community reacting to the riskiness associated with these projects?
7. Dividend policy: Write about what kind of dividend policy they have. How much do they pay out or put back into the business every year?
8. Working capital management: Analyze their CCC and their cash requirements over the 3 year period. How does it compare to their competitors?
9. Risk assessment: Write about the company’s risks from a market share perspective, competitor and innovation perspective and how this could impact key metrics like ROIC, cash flows, revenues etc.
10. Analyst ratings: Obtain a summary of analyst sentiment around this company.
11. Recommendation/ Conclusion: Indicate whether one should invest in your company or not.
Please strategically use small graphs and tables. Use as much publicly available information as possible – please cite them. Don’t reinvent the wheel – if Morningstar or Bloomberg already has statistics available for your company, use them but critically, please show the analysis/ understanding of the stats from the written analysis.
Citation- URL in the appendix
