Capstone: Business Strategies
Week 6 Financial Analysis
Research Company: IBM
References：
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001420720/000142072023000045/ibio-20230630x10k.htm#Item1
The reference document is in the attachment. Please check it out, tutors, thank you very much!
Ultimately, the goal of a business is to earn a profit. Profit is the result of demanders paying a price for the product that is greater than the cost of producing it. The financial success of a business is measured by profit and profit itself is measured by financial measurements such as Return on Assets, Return on Equity, Stock Price, Dividend Yield, and others.
For those of you who are not quite as strong as others, or those of who have never “developed” financial statements from scratch, I have included a video in Week 6 in BB which is quite amazing in that a billionaire hedge fund executive, Bill Ackman, takes us through building and understanding how business works financially, from scratch, with the development of his lemonade stand business. This is a remarkable video and a must in understanding how financial statements are developed. The first 15 minutes should be enough for our purposes, but the full 45-minute video is a classic and highly recommended. You should view this video before you work on your financial ratio analysis.
Link: https://www.youtube.com/watch?v=WEDIj9JBTC8
You are expected to calculate some financial ratios in Liquidity, Profitability, Asset Management, and Financial Management for your companies (see the entire assignment below).
You need to show that you are able to use excel and input data and formulas that will calculate the ratios. You are expected to provide an excel spreadsheet that calculates the ratios. In order to do this, you also need to provide the financial reporting numbers behind the calculation. For example, the income statement, balance sheet, cash flow, and any other financial reporting from the company that you use for your calculations. You will also need to show the closest competitor financial data to make the comparison for the elements due below (Revenue and net profit growth rates – last 3 years). Students provide excel files with tabs at the bottom for the different calculations and financial statements.
This section should analyze and assess:
- These ratios are as follows (each must be explained in your own words, for example, what does “liquidity” mean): Analyze & Assess:
- Liquidity/Solvency: current ratio (last 3 years, liquid or not?), current debt to equity ratio (is this good or bad by industry standards)
- Profitability: Return on Assets, Gross and net profit ratios, Return on Equity (are these ratios good or bad by industry standards)
- Asset Management: Receivables turnover ratio (is this good or bad by industry standards)
- Dividend and dividend payout ratios (last 3 years):
- How has COVID-19 had an impact?
- Revenue and net profit growth rates (last 3 years). Compare these to their nearest competitor (3 years).
- Explain the difference between cash flow and earnings. Give a cash flow and earnings analysis for the last year.
- Stock performance year to year (over the last 3 years as of 12-31)
- Next: explain “Triple Bottom Line” and what your company may be doing in policy or actions to achieve it.
- When writing the final paper, any changes that are re-written should be highlighted in yellow.
- Research at least two-peer reviewed articles to demonstrate your understanding of financial theory and use them for citations and references.
The analysis should be between 3-4 pages, and provide a few charts or graphs to showcase your excel and data analysis skills.
