The completed report should include:
• An introduction to the company, including background information.
• A financial statement review.
• Pro Forma financial statements (Balance Sheet and Income Statement) for the next two fiscal years, assuming a 10% growth rate in sales and Cost of Goods Sold (COGS) for each of the next two years.
• A ratio analysis for the last fiscal year using at least two ratios from each of the following categories:
o Liquidity
o Financial leverage
o Asset management
o Profitability
o Market value
• Calculate Return on Equity (ROE) using the DuPont system.
• Assess management performance by calculating Economic Value Added (EVA).
• Evaluate the soundness of the company’s financial policies (e.g. capital structure, debt, leverage, dividend policy, etc.) based on the material covered during class.
• A synopsis of your findings, including your recommendations and rationale for whether or not to purchase stock from this company.
