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Common Sized Presentation of Restated Reports (total of 2 to 4 pages)




1. Common Sized Presentation of Restated Reports (total of 2 to 4 pages) of the Income;Statements and the Balance Sheets you are not required to common-size the Cash Flow;Statements.;A. Horizontal Analysis.;B. Vertical Analysis.;C. Common-sized financial statements representative of industry sector or competitor(s) for;comparison purposes.;2. Scenario Analysis (total of 4 to 8 pages double-spaced, 12-point Times New Roman font);A. Management Scenario: You are to review the financials as a President/CEO. At the latest;shareholder meeting, you were accused by shareholders of not effectively using your;company's resources (namely, long-term assets and capital resources). Are the;shareholder's being fair? How does your company compare to its major competitor? If you;cannot defend yourself, what can you do to improve your company's situation? Focus on the;asset utilization ratios and on the profitability ratios in drawing your conclusions. Also keep in;mind the MD&A and what they indicate about the company and its potential for growth and/or;profits.;B. Lender Scenario: You are the loan officer for a commercial lender. You have just received a;request from the company you are researching to provide loan funds that will allow the;company to buy back 3% of its outstanding common stock. The company has indicated to;you that it feels their stock is undervalued at this time. What is your response to their request?;What will this do to the company's various debt and equity ratios? Given the competition;should the company alter its capital structure in this way? What interest rate would apply to;the loan and what will happen to the company's TIE/FCC calculations if the loan is pursued?;C. Supplier Scenario: You are the head of sales for a relatively small company. You have just;received a massive order for parts/supplies/services (whatever would be applicable) from the;company your team has selected to research. To fill this order, you (the supplier) will need to;increase production and hire additional staff to work a second shift. The order will represent;25% of your company's production capacity in the year to come and 20% of capacity for;three years after that. You are concerned about the viability of the company and the;business risks posed by such a large order from one primary customer. Are your concerns;justified? How does this company treat its other suppliers based on your review of their;financials (hint: look at payables history and the ability of the company to meet its short term;obligations)? If you feel this contract is worth pursuing, identify what you can do to;reasonably protect your company. If you feel the contract is not worth pursuing, explain why.;D. Employment Scenario: You are considering taking a position as a Financial Analyst with;the company you have researched. They are offering you a compensation package;consistent with what is available on the market. Do you take the position? If yes, what;general attributes convince you that this is a good company to work for? If you do not take;the position, indicate why not. Consider the management team in your answer and any;pension programs discussed in the Notes section of the company's financial reports or in the;proxy statements sent to investors. Also consider the position of the company in its industry;relative to its competition. Is it a market leader or a laggard? What are the company's relative;strengths and weaknesses?


Paper#27017 | Written in 18-Jul-2015

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