Part 1 (1 page): Overview and competitive landscape
Briefly explain the company’s history. What is the business model of the company?
Explain the company’s value proposition and how it makes or will make money.
Analyze its main success and risk factors.
Discuss the nature of barriers to entry, either to close competitors (to be named) or potential competitors that may penetrate the market. Discuss its recent strategic orientation or any current strategic choice/debates it is currently facing. What is its main strategic challenges?
Part 2 (1 page): Profitability ratios
Compute the company’s main profitability and debt ratios, over the recent period. At the minimum, your analysis should have the DuPont decomposition, RNOA, leverage and current ratio (you may include additional ratios if relevant or unusual. Is the company profitable? How has profitability evolved recently? How do these numbers compare to the industry? (You may refer to industry ratios in related industries discussed in class). You may want to plot these ratios to comparable companies (see below), over the prior 2 to 3 years to analyze relative trends in ratios.
Part 3 (1 pare): Comparables
Identify between 2 and 5 comparables; explain why the businesses are similar and discuss any potential differences. Do these businesses sell substitute products? Do they target the same customer base?
Have their success/risks been similar over the recent period? Is their size comparable? Compare profitability and debt ratios with comparables.
Explain whether the comparables indicate that the firm is doing well or poorly, and whether it may make certain choice that improve its performance.
If your comparables differ on nearly all ratios, this may be a sign that you are not using the right comparables! He creative to find comparables: look at products on 10-K, annual report or company website, and look for similar products by public firms. Find the industry of the firm, and look for public companies in the same industry traded in NYSE or NASDAQ. Look at financial websites such as google or yahoo finance.
