FINC 3511 Project 1 Financial Statement Analysis

Due October 7, 2015 by 11:59 pm

(Sample completed project attached.)
Submit the completed project in CourseDen through the Project Dropbox.

DATA COLLECTION
1. Choose a non-financial S&P 500 firm whose company name starts with the first letter of your
first name (list found at http://en.wikipedia.org/wiki/List_of_S%26P_500_companies). (Do not
choose firms whose GICS Sector is listed as Financials.
a. Go to Yahoo!Finance at http://finance.yahoo.com/. Enter the ticker symbol for your company
in the search box and choose your firm from the resulting list. Record the date, most recent price
for the stock, the most recent trade time, and the 52wk Range. Click Profile on the left-hand
side of the page. Read the Business Summary section and write a short description of the
companys main line of business.
b. Click on Key Statistics on the left-hand side of the page. Record the companys Market
Cap (intraday), Trailing P/E (ttm, intraday), and its Price/Book (mrq).
c. Click Analyst Opinion on the left-hand side of the page. Record the Mean
Recommendation (this week) and the Mean Recommendation (last week). From the Price
Target Summary section, record the Mean Target, the High Target, the Low Target, and
the No. of Brokers.
c. Click Competitors. Record the ticker symbol for one of the firms listed competitors.
d. Click Balance Sheet. Record for the three listed years: net receivables, inventory, total
current assets, total assets, total current liabilities, total liabilities, and total shareholders equity.
e. Click Income Statement. Record for the three listed years: total revenue, earnings before
interest and taxes, interest expense, and net income.
f. Enter the ticker symbol for the firms competitor that you chose in step 1.c. in the search box
near the top of the page and select that firm from the resulting list. Click Balance Sheet.
Record for the three listed years: net receivables, inventory, total current assets, total assets, total
current liabilities, total liabilities, and total shareholders equity. Click Income Statement.
Record for the three listed years: total revenue, earnings before interest and taxes, interest
expense, and net income.

ANALYSIS
Your finished project should be a Word file that follows the format of the sample project
included at the end of this document. The first line should read, FINC 3511 Fall 2015
Project 1. The second line should include your name and the date.
1. List the companys name and ticker symbol. Write a short description of the companys main
line of business.
2. List the stocks most recent price, trade date, and trade time. List the 52-week price range (the
highest and lowest prices the stock has reached in the past year). Describe the relationship of the
current stock price to its 52-week price range.
3. List the companys market capitalization, price-earnings (P/E) ratio, and its price-to-book
ratio. Describe what each ratio means.
4. List the Mean Recommendation (this week) and (last week), the Mean, High, and Low Target
Prices, and the number of brokers following the stock. Describe how the recommendation has
changed this week. Describe whether the current price compared to the mean target price
indicates that analysts expect the stock price to increase or decline. Describe how the high and
low target prices compare to the 52-week range.
5. Use the balance sheet and income statement data you gathered to complete this section.
Complete a simple financial statement analysis of the company (as shown in the sample
project). List all financial ratios shown in the sample project. Discuss how the companys
financial position has changed over the three most recent years for which you have data.
Compare the companys results to those of its competitor. Discuss the changes in relation
to the ratio categories discussed in the course. If data is missing, note that the ratio is
unavailable.
There is an excel template in CourseDen in the Project Information folder that you can
use to calculate the required ratios. The spreadsheet contains all formulas to calculate the
ratios. You only need to enter your firms balance sheet and income statement data.
Enter the numbers without commas. Be sure to enter the firms names. You should then
copy the ratios from the Excel file into your Word document.
FORMAT: Your work should follow the same format as the sample project on the
following pages. Submit the completed project (Word document only) through the Drop
Box in CourseDen.

FINC 3511 Fall 2015 Project 1

Your Name Here
1.
Home

October 7, 2015

Ticker HX

Home offers building materials and related materials. Its stores are primarily located in the
United States, Canada, and Mexico.
2.
Last Trade: $35.10
Trade Time: 12:34 pm
52-wk Range: $22.27 - $37.03

Trade Date: 9/16/15

The stock is near the high-point of the 52-week price range.

3.
Market Cap (intraday): $59.35 billion
Price/Book (mrq): 3.09
P/E (ttm): 22.31
The market capitalization indicates that the total market value of all shares of Home is currently
$59.35 billion.
The price-to-book ratio shows that each dollar contributed by shareholders is now worth $3.09.
The P/E ratio indicates that the current stock price per share is 22.31 times the past twelve
months earnings per share.
4.
Mean Recommendation (this week): 2.1
Mean Recommendation (last week): 2.1
Mean Target Price: $37.02
High Target Price: $45
Low Target Price: $26
No. of Brokers: 23
The average recommendation value has remained the same this week which means that on
average the analysts have not changed their opinions about buying this stock.
The current price of the stock is below the mean target price which means that on average
analysts expect the price to increase in the future.
The high target price is well above the highest price the stock has reached in the past 52 weeks.
The low target price is higher than the lowest price over the past 52 weeks.

5.

Home

Away

J-14

Period Ending:
J-13

J-12

J-14

Period Ending:
J-13

J-12

1.34
0.36

1.20
0.24

1.15
0.23

1.32
0.20

1.22
0.13

1.12
0.14

5.32
6.50
1.62

4.98
6.68
1.73

5.94
6.59
1.75

1.61
5.72
1.43

0.79
5.88
1.48

1.87
6.34
1.56

52.56%
6.89

56.81%
6.75

60.04%
10.51

42.22%
10.27

44.66%
11.77

47.85%
19.87

4.02%
6.51%
13.72%

3.17%
5.49%
12.71%

5.68%
9.92%
24.81%

3.78%
5.40%
9.35%

4.55%
6.73%
12.16%

5.82%
9.10%
17.45%

Liquidity
Current Ratio
Quick Ratio

Asset Management
Days Sales Out
Inventory Turn
Total Asset Turn

Debt Management
Debt Ratio
Times Int Earned

Profitability
Net Profit Margin
Return on Assets
Return on Equity

Liquidity:
HXs has become more liquid over the past three year. Both its current and quick ratios have
increased. Away has also become more liquid. The firms have similar current ratios, but HX has
higher quick ratios indicating less relative inventory holdings.
Asset Management:
HXs days sales outstanding has varied over the period, but is still lower now than two years ago.
Its DSO is higher than that of Away indicating a longer time between sales and collections.
HXs ITR and TATR have fallen over the past two years indicating less effective use of assets.
However, the ratios still exceed those of Away.
Debt Management:
The debt ratios for both HX and Away have fallen over the period, but HX has used more debt
than Away throughout the period. Likewise, Away has earned more income relative to its interest
expense than HX.
Profitability:
NPM, ROA, and ROE are all lower for HX this year than two years ago. However, the ratios
have increased compared to last year. All three ratios have declined each year for Away. In the
most recent year, all three ratios are higher for HX than for Away indicating higher profitability.