Communications Skills Quiz
You needs to select two companies ( Toyota and Ford ) and obtain recent annual reports for each company. The group needs to submit a write-up that includes the following components.
· Briefly describe each company and its business.
· Calculate each company’s basic and diluted earnings per share (EPS) for each year. Comment on the direction of change in EPS for each company.
· Calculate the financial ratios listed on the following webpage for each year for each company: http:
www.investinganswers.com/education
atio-analysis/15-financial-ratios-every-investor-should-use-3011.
· For the second ratio (PEG), you can either estimate the potential growth rate in EPS or assume it is equal to the realized growth rate in EPS for the most recent year [realized growth rate in EPS for year t: ChangeEPSt = (EPSt – EPSt-1)/EPSt-1]
· Briefly comment on each category of ratios: price ratios, profitability ratios, liquidity ratios, debt ratios, and efficiency ratios. Address the trend of change in the ratios for each company and compare the companies for the most recent year. You do not have to comment on each individual ratio, rather, you can discuss the company’s performance for each group of ratios together.
· Illustrate companies’ EPS and financial ratios using figures. You can prepare a separate figure for each ratio or include more than one ratio, from the same group of ratios, in one figure. Also, you can prepare separate figures for the companies for some or all of the ratios or include both companies in the same figure for some or all of the ratios. Design your figures in a way that is easy to understand. Also, you should refer to the figures in your discussion of each group of ratios.
· Briefly discuss your general conclusion about the financial performance of each company and indicate which of these companies represents a better investment in your opinion.
Format and Length Guidelines:
The written assignment consists of a memo of no more than three typed pages (double spaced, with 12 point Times New Roman font and a minimum of 1” margin from all sides) conveying your recommendation for the case issues and an explanation/justification for the recommendation. You can attach as exhibits any computations or other analyses used to resolve case issues (but you must refer to these in your memo); exhibits will not count toward the three-page length. You should attach to your memo a copy of the specific pages from the three annual reports (10-Ks) on which your computations are based.
1. Memos must be written in proper memo format. This format is outlined as follows:
Introduction
· Explain purpose of the report and provide set-up for remainder of paper, including
ief overview of contents.
Discussion
· Clearly identify problem/issue at hand.
· Elaborate major points and provide analysis of various alternatives. This is the main part of the paper.
· Good transitions between points are essential here if argument is to appear forceful.
· Visual aids such as charts/tables/graphs may be referenced here, but should be included at the end of the paper as attachments.
Recommendations
· Make specific recommendations based on the analysis provided in the discussion.
Conclusion
· Briefly restate important points/findings here and reiterate why recommended course of action is best.
2. Each memo must begin with an introductory paragraph stating the purpose of the memo, and end with a
ief concluding paragraph. Use the following headings for this assignment between the introductory and concluding paragraphs:
XXXXXXXXXXEarnings Trends;
XXXXXXXXXXRelationship between Risk and Profitability;
XXXXXXXXXXLiquidity and Financial Flexibility.
3. Memos must reference any attached exhibits. Exhibits should be typed (using MS Word or Excel) or neatly handwritten, and can include computations or any other analyses that are required in the assignment and/or that you believe are needed to support arguments advanced in your memo. Exhibits do not count toward the memo’s maximum page length.
4. The “FROM” line of each memo must include (this part of the memo can be single-spaced):
-- Names of the authors;
-- Hand-written initials by each author’s name;
-- Your class section.
These format requirements insure that everyone has the same amount of space in which to convey their ideas. If you do not follow one or more of these format requirements, two points will be deducted.
Notes:
· The annual reports for both companies should be for FYE 2017 or, 20167if the 2017 report is not yet available for one or both of the companies.
· Annual reports can be obtained from each company’s investor relations website or from the SEC’s EDGAR database: (Electronic Data Gathering, Analysis, and Retrieval; http:
www.sec.gov/edga
searchedga
companysearch.html).
· To obtain stock prices at the end of each fiscal year: you can search for the company on “finance.yahoo.com” then click on “Charts” from the top menu to view the daily stock price chart. You can scroll to the date of interest (for example, 12/31/2016, 12/31/2017) to view the stock price for that day.
· You should use Excel to calculate the ratios and prepare the figures
· The write-up should be written using Word and needs to be double-spaced using size 12 Times New Roman font. The exhibits including the ratios, as well as the figures, need to be inserted in the write-up.
· One member from each group needs to submit the write-up in class (pape
hard copy). Excel file with raw data should be emailed to me ( XXXXXXXXXX) and copied to other group members on the same day.
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