Winter Study Program - Accounting
Financial Evaluation of a Company
Due Date: Tuesday, January 23, 2007 noon
To Be Given to Instructor in Classroom
 
(a) Form a group of 4-5 members (preferably 5 members). After your team has been formed, select, as a group, one of the six companies from a list that I will provide in class.  Company selection will be on a first come, first serve basis.  By Friday, January 5, 2007, indicate your selected company on the list provided in class.
(b) As soon as possible, I would suggest that you review the company’s 10-K either at the Edgar database or through Edgarscan™.  Edgarscan™ can be reached at
http://edgarscan.pwcglobal.com/
(c) For the company you selected, type a paper (maximum 10 pages, double-spaced) indicating the following: 
1. the industry (or industries) in which your company operates
2. the nature of your company's business
3. the names of the major competitors for your company
4. the status of you company within its industry
5. the Friday, December 29, 2006 closing stock price
6. the Thursday, January 18, 2007 closing stock price
7. the reasons for the change in market price from December 29, 2006 to January 18, 2007
8. Using the company's annual report calculate the following ratios for the most recent year:
a.

asset turnover
          Investopedia
          Investing for Beginners
          Business Owners' Toolkit

b.

current ratio
          The Motley Fool
          Short Term Liquidity Ratios
          Investopedia
          Current Ratio Calculator
          American Express
          Investing for Beginners
          Business Owners' Toolkit

c. acid-test ratio
          The Motley Fool
          Short Term Liquidity Ratios
          Investopedia
          Acid-Test Ratio Calculator
          American Express
          Business Owners' Toolkit
d. accounts receivable turnover ratio
          The Motley Fool
          Investopedia
          American Express
e. inventory turnover ratio
         The Motley Fool
         Investopedia
         American Express
f. property, plant and equipment turnover
          Business Owners' Toolkit
g.

long-term debt to total assets or long-term debt to stockholders' equity
          Investing for Beginners
          Investopedia
          Business Owners' Toolkit
          American Express

h. dividend payout ratio
          Investing for Beginners
          Investopedia
i. price-earnings ratio at January 18, 2006 (to be determined from finance.yahoo.com)
Be sure to show your calculations for all ratios (except the price-earnings ratio)
9. For each of the ratios calculated above, indicate its significance as it pertains to your company (is the company doing good, bad, fair, etc.; is the ratio a positive indicator or a negative indicator for your company).  You might compare the ratios for your company to those of other companies in the industry.
     The paper will be evaluated not only for the quality of comments but also for the quality of presentation, grammar, sentence structure, spelling, etc.  Failure to complete these requirements when due will result in no (zero) points being earned for this project, and thus a failing grade for the course.

Last Updated:  11/20/06