Invesement , Finance

Semester (Group) Project: industry analysis of three companies within one industry
choose which company to analyze within the assigned industry. Alternatively, with my permission, you many
choose your industry, in which case I will assign the company within that industry for you to analyze.
This project is to be completed in sections. A draft of each section must be turned in by the date specified in the
attached timetable. Late submissions will receive the next lower letter grade. I will comment on each draft and
return it. Comments should be incorporated into the final version which is due by the start of class on November 24th
. Failure to incorporate these comments/suggestions into the final draft of your paper will result in a
assignment or 1% of your final mark. The finished final version is worth 2/3 of the mark for this assignment or
1. Article Databases tab
2. Business Source Complete
3. Up at the top: select the Company Information link
4. Type in the name of a relevant company: Enbridge, Starbucks, etc.
5. Choose that companies profile from the list of results
6. On the company profile page: look to the left of the page; there will be a “Related Information” section that includes Industry Profiles
7. Scan the results for the relevant profiles (some will be Canadian, others global)Alternatively, students can try searching the Business Source Complete database for the phrase “industry profile,” but it’s a bit of a guess as to the industry name: using Starbucks as an example, if they earched:“industry profile” AND coffee. Results include the restaurant industry and a few others; it takes some digging (or going through the longer process above) to find the “Hot Drinks Industry Profile”1. Executive Summary (due November 24th) – a one page summary of the analysis, forecasts and recommendations (1 page maximum).
2. Introduction (draft due September 19th) – state the purpose of your report, identify and describe your chosen industry, and the company to be analyzed. Explain the organization of your report. (1 page
maximum)
3. Macroeconomics analysis & forecasts (draft due October 10th) – create or find a two-year economic
& financial market forecast of the US, Canada, and major regions of the world. Show how the macro
forecasts will affect performance of the industry and your company. Note: you are not to include the
forecast itself, just your assessment of its impact on the industry and company. (1 page maximum)
4. Industry analysis & forecasts (draft due October 20st) – provide your assessment of timelines and
future prospects for your industry. Focus on major factors which will impact the expected revenues,
costs and earnings for your industry. Potential sources: 1) Wall Street Journal on-line, 2) the Conference
Board of Canada.
5. Company analysisA. (draft due November 14th) Examine the firm’s balance sheet, income statement and cash flow statement. How is the firm doing financially? Explain your reasoning. Also conduct an
historical ratio analysis and DuPont decomposition comparing your company to its industry.
The ratio categories should include liquidity, asset management, debt management, profitability
and market ratios. The analysis should cover the past three years. Many of the ratios can be
found on wsj.com, yahoo finance, or Google Finance company analysis pages. Identify whether
your firm has a competitive advantage(s) and whether they can maintain the competitive
advantage(s). What did you learn about your company and its industry from this analysis? 1 – 2
pages excluding tables and calculations.B. (draft due November 14th) Plot a graph of the comparative stock price performance of your company, the S&P500 and your industry for one, two and three years. You can plot all 3 years on one graph, but you must discuss the 1, 2, and 3 year performance and trends separately. Take note of the 52-week high and low and the current price. What can you learn about the companyand industry from this graph? (1 page maximum excluding graphs)
C. (draft due November 14th) Based on your two-year economic and financial forecast, and
fundamental ratio analysis which you conduct, provide a two-year forecast of your company:
sales, earnings per share, dividends per share, P/E multiples and share price. Explain how you
arrived at your estimates. (1 page maximum excluding tables and calculations)
D. (draft due November 14th) Conduct technical analysis (See Section 8.7 of our text, Stock-Trak
exercises ST 4 and ST 5, or do a search on “technical analysis” on the web). Conduct one or
two types of technical analysis on your company. Describe how you did the technical analysis
and what it signals for each of your company. (1 page maximum excluding graphs)
E. (draft due November 14th) Use the DDM, RIM and price ratios to determine stock valuation,
and make investment recommendation – Indicate whether you recommend a strong buy, hold,
sell or strong sell for your company. (1 page maximum excluding tables and calculations)