In this class, you will participate in a team project which utilizes the information from class lectures and our textbook to perform a real-world, financial statement analysis of a company. Your team will select a profitable publicly-traded company from the following industries: Hospital Provider, Pharmaceutical, Healthcare related Manufacturing or Health Insurance. The team will use the company’s most recently filed form 10-K as the primary data source for the project analysis.
Objective: Students will form teams of 4 members for the project and should submit their member names to me for approval by the end of class on August 27th, following which a number will be assigned to each team. Your team will then submit its chosen company to me by the end of class on September 3rd. Companies will be approved on a first-come-first-served basis.
Using information from the multiple years presented in the company’s financial statements, your team will evaluate the company’s strengths and weaknesses versus industry averages or one of its industry competitors (using similar data from that competitor company). Your team will submit a written report (not exceeding 5 pages) on eLearning via Turnitin by the due date below. Your team will designate a team “secretary” who will submit the paper, and all group members will be able to view the results and feedback once it has been graded. Only the team secretary may submit via Turnitin. Your team will also present its findings to the class via an executive summary presentation, which will also be submitted only by the team secretary through the eLearning portal. Both the paper and the presentation must be submitted by November 6, 2020 at noon. No late submissions will be accepted, and each team member will receive a grade of zero for the project if it is not submitted on time. Grades will be based on the strength of the analysis and how well it supports your conclusions, as well as the quality of the presentation. See Grading Criteria section below.
Grading Criteria:
Group Project (100 Points): The grading sheet for the project is as follows:
General Requirements:
The page limit includes graphs and charts but excludes the reference page and Financial Statements.
Font size should not be less than 10, and 1½ line spacing is preferred.
Failure to submit the project by the deadline will result in a grade of zero for the team.
Insert: Team #, Course # & section, Year and Semester, as a footer to each page.
Specific Requirements:
- Company profile (i.e., description and characteristics). If you use a competitor for your comparison rather than industry statistics, then include a brief profile of the competitor company as well (although the competitor profile does not need to be as deep as your main company profile). (10 points)
- Industry profile (10 points) – Include details of how new/mature the industry is, any new laws/changes, frequency of litigation, annual revenue for the industry, and other relevant information about the industry. Remember, this section is for the industry as a whole, NOT more on the selected entity or the competitor which should be already covered in 1., above.
- A Ratio Analysis for the current and previous years, using at least 8 ratios we covered in class, comparing your selected company to the industry averages. In the absence of industry data, you can compare the entity to a competitor for this section of the paper. Also identify meaningful trends in the ratios from one year to the next for your company. Be sure to show ratio analyses (including formulas, dollar amounts used in calculations, etc.) side-by-side for the years selected and for the industry or competitor, as the case may be. All ratios should be in this separate ratio section of the paper (as opposed to scattered throughout the paper in different sections). Use graphs and/or charts in these analyses to help the reader quickly follow your research results. (35 points)
- Identify your company’s strengths & weaknesses and give recommendations. You may use a standard SWOT analysis for this section if you prefer. Recommendations should not only include WHAT actions you think the company should take, but also HOW the company might execute those actions. For example, increasing revenue could be the “What” and increased marketing efforts in certain identified markets to increase consumer/patient awareness might be the “How” (20 points)
- References in proper format and Financial Statements. For the financial statements, you only need to attach the Balance Sheet, Income Statement, Statement of Stockholders’ Equity and Cash Flow Statement for your chosen company. You do not need to attach the footnotes or the competitor’s (if applicable) financial statements. The financial statements will NOT count towards the 5-page paper limit. (5 points)
- Class Presentations: Each team will also present an executive summary of their project to the class using PowerPoint. Presentation time should be kept to a maximum of 15 minutes. DO NOT present large amounts of information and data. Charts and graphs should be used wherever relevant. This should be an executive summary involving teamwork and critical thinking. Remember that you only have 15 minutes to get your audience to understand your company and the salient parts of your analysis and conclusions. PowerPoint presentation files should be submitted by the team secretary using the eLearning assignment submission portal in the Project Folder. Only the team secretary should submit the presentation. Not all members need to speak during the presentation, but all must be present, and more than one team member must deliver a relevant section. (20 points)
- Team Member Evaluation Form: To monitor individual team member participation, each member will have the opportunity to complete a “Team Member Evaluation Form” which critiques their view of the contributions made throughout the semester by any of the other team members. Submission of this evaluation form is NOT mandatory and need only be made if you feel it is warranted due to lack of participation/contribution by any team member(s). Students who receive consistently low evaluations from their other team members will receive a reduction in their individual grade.