Final Research Report Sample Outline
The Research Report is an opportunity for the student to demonstrate an understanding of the key analytical tools available to assess a company’s financial condition. In addition, the student may also demonstrate the effective use of the written word (including graphs and tables, as necessary) to effectively communicate one’s qualitative interpretation of the quantitative results. The student’s selection of appropriate tools and interpretation of key metrics will be given greater weight than a mere listing of all possible analyses and a regurgitation of numerical results. Lucid and concise discussion with a clearly stated, comprehensible conclusion and plan of action is critical. The Magna Carta or the Internal Revenue Code would likely fail to meet the lucid and concise standard.
I. Introduction a. General overview of the company b. General statement of your objective, i.e., apply analytical tools to formulate a buy/sell or
lend/don’t lend decision.
II. The Analytical Tools – briefly describe the tools you will be using to evaluate your target company, generally describe how you use each tool and generally what you can learn from each tool.
a. Ratio analysis i. Profitability measures
ii. Efficiency measures 1. Asset turnover
2. Inventory turnover and Days Sale (COGS) in Inventory 3. AR collection period and DSO 4. AP payment period 5. Cash to cash cycle
iii. Liquidity and credit quality measures b. Analysis of ROE drivers, e.g., DuPont Model c. Common sized income statement, balance sheet, cash flow including LTM/TTM d. Growth analysis
i. Historical sales and earnings growth ii. Growth potential, e.g., Sustainable Growth Model
e. Peer analysis (industry benchmarking) using a few key metrics
III. Summary of Quantitative Analysis – primarily focusing on the results (not interpretation) of quantitative analysis
a. Balance sheet analysis b. Income statement analysis, i.e., quality of earnings metrics c. Cash flow analysis d. Operating efficiency e. ROE analysis f. Credit & liquidity analysis g. Growth expectation
IV. Qualitative Interpretation of Quantitative Results a. Highlight key findings
b. Explain significance, i.e., what we should conclude V. Summary, Conclusion or Plan of Action
July 7, 2012
SA Final Project [url removed, login to view]
Summarize key findings (interpretation of quantitative analysis) Conclusion will be a statement of your opinion based on III and IV above
Buy or sell the stock (and why) Credit quality as in lend or not lend to the company