Overview of the Project a.k.a. CAP
The final project asks you to:
1) Answer general “theory” questions regarding these two companies.
2) Utilize the Internet as resources to understand how to generate useful indicators in the areas of Profitability, Asset Management, Financial Risk, Liquidity, and Market Strength.
3) Perform calculations and analyses on the financial statement data given.
4) Evaluate the results from your calculations and analyses and form conclusions regarding your understanding of the companies compared.
5) Discuss this project with others in the class or work in self-created groups (for both online and traditional classes) to discuss the project where you can learn from each other but ultimately prepare you own individual analysis. (The level of interaction between students is up to the individual student and while highly recommended, is not required.)
3) to practice your communication skills (i.e., effective reading, listening, writing, speaking).
4) to improve/reinforce your interpersonal skills by providing experience in working with other students as a cooperative learning team (see #5 above).
5) to provide a foundation in understanding and using corporate financial statements that will be useful in your future college courses and professional career, as well as from a potential investor standpoint. (Adapted from Michael Booth’s Acct 1 Project).
Parts to the Project
The project is divided into two major sections. The first section is ratio analysis also called performance measurement. In this section, I give you a couple pages I scanned from a textbook of some of the underlying concepts of performance measurement. To provide you with details on what the ratios are and what they mean, I then included four hyperlinks to resources on the web. My suggestion is to give each link a quick overview to see which one fits your learning style. Some are “down and dirty” without much frills and others are more sophisticated and detailed. Remember that you have your own textbook chapters that you will have completed by the time you put the finishing touches on this project so you should have no shortage of resources.
Following these resources, I give you the actual textbook problem (problem 14.4) with the Income Statement and Balance Sheet. I decided to provide all of this information so that you have it all at your disposal and do not have to go “find” the information yourself. My thinking is that if I provide the information, you can spend your time on the learning aspect of this assignment. At the end of this first section is the requirements section itemizing what you need to do.
The second section which follows all of the above is a very short section where I want you to write up an analysis of a horizontal and vertical analysis problem where I give you the problem and the solution. I am looking for a write up of what the data means. My thinking on this one is that the computer will spit out the numbers and the calculation but you need to be able to interpret the results.
SECTION ONE
Here are 2 pages that I scanned from the Needles textbook that will give you a little background information. I hope the quality is good enough for you to read. See if they helps you understand the overall concepts of Financial Performance Measurement.
