PROBLEM 11–4 Select a company from a nonregulated industry for which you can obtain complete financial statements for at least the most recent six years.

Required:

Based on these financial statements, the company’s background, industry statistics, and other market and company information, prepare a financial statement analysis report covering the following points:

a. Executive summary of the company and its industry.

b. Detailed evaluation of:

(1) Short-term liquidity (current debt-paying ability). (6) Profitability and equity analysis.

(2) Cash forecasting and pro forma analysis. Note: You are expected to use a variety of

(3) Capital structure and solvency. financial analysis tools in answering (b).

(4) Return on invested capital. Your analysis should yield inferences for each

(5) Asset turnover (utilization). of these six areas.

c. Comment on the usefulness of the financial statements of this company for your analysis.

d. How did accounting principles used in the financial statements affect your analytical measures?

e. Prepare a forecast of the income statement, balance sheet, and statement of cash flows for a five-year horizon and a terminal year in Year 6.

f. Estimate the value of your company’s common stock per share using the valuation analysis and procedures described in the Comprehensive Case.