The purpose of this project is to help you
develop skills not only in performing the calculations behind financial
analysis but interpreting the numbers as well.
You are to pick a company. You should pick
one either from the industry in which you are currently working or an industry
in which you are interested. You could also pick a division of a company. It is imperative to use that sufficient data
about your company and that it is available. One way to do this is to pick a
publicly held company. If you pick a privately held company or a division of a
company, make sure that the data necessary to do a significant financial
analysis is available.
If you use data that is not publicly
available, be sure to talk to your manager and to make absolutely sure that
revealing that data is not a problem.
You will also need to find a standard
against which to compare your findings. This could be a different company in
the same industry. This could also be the same company at a different time. Additionally,
average or benchmark numbers are available for several industries. If you
decide to use a different company in the same industry or the same company at a
different time, make sure that there are enough differences between the two to
make an analysis meaningful.
After you have selected a company, put
yourself in the place of an analyst who has been asked to perform an analysis
of the company and provide a recommendation to management.
Use ratio analysis, common size analysis,
or other techniques to determine areas in which the company is doing well as
well as areas that management should look at. Then, present your analysis and
recommendations in the form of a paper.