1) Using DuPont analysis is a quick and relatively easy way to assess the overall health of a firm. This week’s lesson (Page 4) includes information on the DuPont equation. Go to finance.yahoo.com and choose a company by entering the company name in the box to the left of “Get Quotes.” Once you have the company overview page open, to the left you will see a list of links for further information on that firm. Near the bottom of the link column are financial statements. Open the firm’s income statement and balance sheet and use the information there to calculate all parts of the DuPont Ratio for the past three years; do not use Nike. If your firm does not have 3 years of full information, choose a different firm. Report each ratio value as well as the numerator and denominator of each of the 4 ratios for the past 3 years (12 ratios in total). Discuss the trends revealed in each ratio. Please be sure to note your firm’s name in the title of your post and please do not duplicate firms. Your instructor is posting information on Nike as an example; you might want to study that post before you begin.
2)This week we are studying the statement of cash flows. Operating cash flow represents the cash that flows in and out of the company on a day-to-day basis. For example, cash inflows come from collected revenues and cash outflows occur when the firm pays its normal day-to-day expenses. We, of course, would prefer to see a positive total on the net cash provided by operating activities, because it implies that cash inflows are greater than cash outflows. In your textbook, the author discusses 4 financial ratios associated with operating cash flows; please study these ratios. Remember that the denominator on the ratio operating cash flow/current maturities of long-term debt is being revised to current liabilities; therefore, we will report the ratio as operating cash flow/current liabilities (see discussion on Page 3 of the Module 5 lesson).
This week, find the statement of cash flow for a firm of your choosing and report the cash flow ratios. Please report and discuss 3 years of ratios for the three ratios related to debt and dividends but only the current year’s cash flows per share. Show numerators and denominators for all ratios and then discuss their economic meaning. It is possible that your firm does not pay dividends (you will see dividends in the financing section of the cash flow statement).
The cash flow per share ratio is particularly challenging since most of the numbers in the statements are in thousands or millions (look at the top of the statement for a note) while the number of shares outstanding only for the current year (in yahoo.finance, under your firm’s page, look in “Key Statistics” and you will find the number of shares in the right-hand column about halfway down the page). You only have to report ONE YEAR on the cash flow per share. Please do not report on Nike, as that will be the firm posted as an example. Again, please do not duplicate firms by including the name of your chosen firm in the title to your post. Also, please respond to questions/comments from your instructor regarding your post.
3) Choose a publicly traded company and find its annual report (10K) on www.sec.gov. Scroll down to the area called “Filings and Forms” and click on “Search for Company files” and then click on “Company or fund name. . .” It’s probably the easiest to search by the company’s ticker symbol, but you can also use the company’s name. Once you find the company, then find its most recent 10K report. Open the massive report and scroll through the index to find the MD&A (Management Discussion and Analysis) section. Sometimes you won’t find much information in this section but you will note some management discussion around this area–you can use that, too. In your post, provide the name of the company you chose and describe something interesting you found in the MD&A. Again, do not duplicate firms, please.
4)discuss the two most important things you’ve learned so far in this class and how you’ve been able to apply these at work or in your personal life during the past 6 weeks.
5) discuss two of the most surprising findings of your work.