Financial Analysis of Apple

Your project should have about 5-6 pages of write-up. The write-up should be an analysis of the financial performance of the companies you have chosen. Please note that this is not a research paper and it is also not a report of what the experts suggest. Although you can review the recommendations of investment analysts, do not just repeat what they say. The analysis, conclusions and recommendations need to come from you. Charts, graphs, calculations, diagrams, and financial statements should be in the appendix. Appendix has no limit on pages. Due date is also posted on the syllabus calendar. An email reminder will be sent out as the project is assigned. There is no new homework assignment for that week. Submit your completed project by posting them on the “Course Project” module by the due date. Use Yahoo Finance, Google Finance, etrade, Charles Schwab or any other finance website available to investors to research 2 or 3 companies in a similar line of business. You can also go the companies’ websites directly and download their annual reports. Most of the time, it can be found in the “Investors Relations” section of the website. For example, you can choose to compare a company with the industry leader and discuss what improvements the company can make to make its financial position stronger or more competitive vs. the industry leader using the tools discussed in Chapter 12 and/or Chapter 11. Alternatively, you can take the position of a stock analyst and recommend a stock to invest based on your comparison of 2 or 3 companies in the same industry after you perform financial statement analysis and ratio analysis. Lastly, you can compare an internet based firm with a brick-and-mortar competitor and evaluate what you see as strengths of the internet firm vs. its retail competitor using the tools discussed in Chapter 12 and/or Chapter 11. Focus on the accounting and financial statements differences. Choose companies that are in the same industry, have similar products or service, and are competing for the same customers. Use common size financial statements to account for any differences in size. Tools that should be used in your analysis are in Chapters 11 and 12. The following are suggestions that you can include. You do not need to include all the suggestions as it will exceed the required 5-6 pages. You can use cash flow analysis and comment on the specific changes in operating, investing, or financing activities and explain why cash flow is increasing, decreasing or stable. You can include a vertical or horizontal financial statement analysis or work on a multi-year trend analysis. You should pick a few selected ratios from Decision Guidelines on page 699-700 that are relevant to your company by computing the ratios and commenting on the changes in trend over time or in comparison to other companies or industry standard/leader. As an example, you can look at the Summary Problem about Leargear Corporation on page 701 to 702 for help on the computations. Remember that you have to do an analytical write-up on the project that is not shown on the Summary Problem sample. Also, your project involves comparison to at least one other company using the same analysis. The Leargear Corporation only involves comparison to itself. For another example, see page 742 to 743 for Kohl’s Corporation. In terms of the organization of your write-up, here is a suggested format: 1. Introduction – a brief introduction of the industry and companies you are analyzing. Do not take up more than 1 to 1.5 pages. 2. Analytical discussion of your financial statement analysis and ratio analysis. The actual computations, graphs, charts, etc. anything quantitative need to be in the appendix and does not count toward the 5 to 6 pages required. Compare and contract what you calculated for each company. Discuss any insights you learned in comparing the companies’s financial statements or ratios. For example, you might find that an internet-based company has less fixed assets and inventory than a brick and motar company. The reason is they do not have store fronts and carry less duplicate inventory because they have a few warehouses vs. many store locations. This type of information you should be able to gather from the financial statements or annual reports. 3. Conclusion and recommendations. Be sure to sum up what you want the reader to take away after reading your report. These should include the main points that make you choose one company over another as an investment. Do not state a recommendation only without stating the reasons behind your recommendation.