FIN5063-2W7FP Part 2 Theory Part

You will simulate the role of a credit analyst in choosing a company in which to invest. You will analyze two firms within the same industry and determine in which firm they would choose to invest based on an analysis of the firm's financial statements, financial ratios, and current industry and firm events. Detailed instructions follow:
Choose two publicly traded firms within the same industry.
Collect the firm's annual reports, financial statements, and press releases from the last five years.
Analyze the firms individually.
Compare and contrast the two firms to determine which would be a better investment.
Provide an extensive report on your findings (as discussed above). This report should be written as if you were working for an investment client. Use of outside analysis or information should be fully cited. You may use this information, but should justify why it was used and whether you concur with the findings.
Your report should include:
A thorough analysis of each financial area discussed in class: liquidity, asset management, debt management, profitability, and market value. You should dig deeper than the ratios. In other words, if leverage significantly increased, there should be an explanation of why. It is anticipated this analysis will consider both trend and peer information.
Discussion of planned expansions, acquisitions, mergers, or product changes should be discussed. This information may be obtained through the firm's annual reports, news releases, or analyst opinions.
Pertinent industry information that may affect one or both firms.
The report should conclude with an informed opinion regarding which company would be chosen. You should provide financial support for their decisions.