You have just been hired as a junior financial analyst working for The Fly-by-Night Investment and Storm Door
Company (they believe in diversifying!). You have been given a major corporation (actually it’s your choice) to
analyze for its investment potential.
(Do NOT choose a financial organization (their financial statements will drive you crazy!) Pick a manufacturing
or retail company that is publicly traded (on the New York Stock Exchange). ALSO – remember you need to
You have been asked to create a PowerPoint presentation based on your SWOT analysis – actually only HALF
a SWOT – just the Strengths (S) and Weaknesses (W). The S&W will be based upon your financial analysis of
the Income Statement and Balance Sheet of that major corporation. Identify areas in which the company is
performing well (strengths) and advise your boss of any problem areas (weaknesses).
Include in your analysis an assessment of how the firm’s strengths and weaknesses affect its credit worthiness
and investment potential.
Data:
The time period for the analysis is TWO years. You need to “crunch” the numbers – two years of ratios and two
years of the “Common-sized” Income Statement for your company. For the comparison company, just the most
recent year’s numbers are good: both their ratios and their common-sized Income Statement.
Analysis:
The two years of ratios for your company will show a trend (in the real world we would use 3-5 years). Look at
that those trends carefully! Are they getting better or worse? I wonder why? Then compare your company’s
most recent ratios to the competitor. Are the current ratios for your company better or worse than the major
competitor? Either way, what is this telling you? Do the same with the Common-sized Income Statement.