.5 Assignment
• Research the financial statements for the company you chose for the 3.5 Assignment.
a. Note: it is particularly recommended for this assignment you locate the annual statements (called “10-K” forms) for your company through the company’s web site or by using the SEC’s EDGAR system.
Annual statements will often include commentary explaining recent financial challenges and plans for the future.
b. Many free financial websites, such as Morningstar, provide financial data and ratios for public companies. Search for your company on Morningstar and then select “Operating Performance” for a list of ratios for previous years.
c. Consider accessing company reports through OCLS using the Business Insights: Essentials tool. Detailed financial and investment reports are available for hundreds of companies.
• Prepare a paper analyzing the company’s growth challenges and making appropriate recommendations:
a. Using the sustainable growth equation from your textbook, calculate the company’s sustainable growth rate for at least the past three years. Compare your calculated sustainable growth rate to the company’s actual growth rate in sales during this period.
b. Begin your paper by creating a table showing the company’s actual growth rates, the sustainable growth rates you calculated, and the four components of sustainable growth: profit margin, retention ratio, asset turnover, and financial leverage (assets/equity).
c. Describe what growth challenge the company is currently facing.
d. Analyze what actions the company has taken to deal with their particular growth challenge.
Your analysis should be based on changes in the components of sustainable growth, on the actions reported by executives in annual reports, and on any other commentary you discover through your research.
e. Make a series of specific recommendations on what actions the company could take in the future to address its growth challenges.
• Be sure to provide a detailed analysis and recommendation that demonstrates your critical thinking and understanding of financial analysis.
Your finished paper should be 500–600 words in length.
• Prepare your paper in Microsoft Word in a professional manner, using proper spelling, grammar, and APA style. Include a reference list. Be sure to cite your sources appropriately for your financial data and any commentary or analysis you rely upon
