FSA Fall 2023 Group Project Requirements

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School

New York University *

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Course

MISC

Subject

Finance

Date

Jan 9, 2024

Type

pdf

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2

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Project Overview: The Financial Statement Analysis (FSA) Class Project (the “Project”) is designed to help you integrate and synthesize what you learn in FSA during the semester into real world analysis. Below is a summary of the Project. You are an intern working as an analyst at an asset management firm. One of our clients has engaged our firm to provide an investment recommendation as to where they should place a $40 million investment of excess cash. You have three investment options to choose from, but you must pick only one. Therefore, please pick one of the following three companies to analyze as part of this project: 1. Paramount Global (Ticker “PARA”) 2. Walt Disney Co (Ticker “DIS”) Our client is interested in learning more about a particular company and its historical financial performance and position. Deliverables: The Project has three specific deliverables. Given that time is of the essence, all due dates must be strictly adhered to in accordance with the terms of the engagement letter with our client. Any late submissions are legally considered a default of the engagement letter in its entirety and thus allows our client, at their sole discretion, to nullify the terms of the engagement which would result in no fee paid to our firm. Below are the specific deliverables that have been set forth in the engagement letter. Financial Model (Excel): 1. Tabs T2 through T4 on the excel template—Prepare in auditable form (see “Important Note” below) a model of the historical financial statements of the company for the most recent fiscal years as called for in each tab. 2. Tabs T5 through T9 on the excel template—Prepare a set of concrete, actionable analysis for how the company’s leadership could improve their operational and non-operational performance. The analysis should consider the company on all dimensions covered in our FSA class. 3. Tab T10 —Prepare an income statement forecast for the next fiscal / calendar year (a 12-month forecast). Group Presentation: 4. Investment Recommendation- Prepare a concise recommendation to be presented in PowerPoint to our firm’s Senior Investment Committee. In arriving at your recommendation, the Investment Committee is looking for you to determine those metrics (e.g., financial ratio, financial / market comparisons, and comparative financial analysis) that highlights the strengths and weaknesses of the company you have selected for a potential investment opportunity. The structure of the presentation should follow the following format, but given the confidence the investment Committee has in your technical capabilities and creativity, you are permitted to have leeway in your specific presentations if you think there is a more effective way to support your overall recommendation.
Details: General presentation structure: 1. Strengths 2. Weaknesses 3. Opportunities 4, Threats 5. “Next Year” income statement forecast 6. Conclusion Our client is a professional with a strong understanding of financial reporting. In supporting your overall recommendation, you must provide analysis details in the multi-tab excel spreadsheet that our firm has developed. As outlined above, each tab in T5 through T9 must include BRIEF conclusions about your analysis in the columns labeled “Analysis”. You can embed graphics or charts in each tab, as relevant if that hel ps support your analysis. Below are specific details what your final excel workbook should include: Tab 1: Cover sheet with Company name that you have chosen to analyze, team number and names/contact information of each team member. Tab 2: Balance Sheets -Four years of financial statements, along with a vertical and horizontal analysis. Tab 3: Income Statements Four years of financial statements, along with a vertical and horizontal analysis. Tab 4: Statements of Cash Flows Four years of financial statements. Tab 5: Operating Performance (profitability) Tab 6: Operating Performance (efficiency) Tab 7: Debt financing metrics Tab 8: Equity and market-based metrics Tab 9: Operational and financial improvements Tab 10: 2023 Income Statement Forecast Important notes: 1. A key part of this project is for you to expand your spreadsheet skills as it relates to financial modeling. As such, each value in your spreadsheet needs to be “auditable”, and therefore, needs to be linked within the excel template so that a reviewer of the information/data can precisely follow the source of each number without having to inquire of the preparer. This is just one component of financial modeling and is a very important “real world” skill to develop. This project will provide you the opportunity for you to demonstrate your financial modeling skills. Your group will select a company for analysis during our third class session. You must download the financial data from the Securities and Exchange Commission (“SEC”) website (SEC.gov). a. Caution: Do not use investment sites for your financial data. You can use these sites for analysis, but not for the original data in Tabs 2-4. Use the company’s submissions to the SEC, per instructions above.
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