The Final Project allows you to demonstrate your knowledge and understanding of basic financial statements, financial ratio analysis, trend and common size analysis, market valuation of bonds and stocks, and how companies manage their assets and make capital budgeting decisions to generate maximum value to stockholders.

The project requires you to use the financial reporting package of two publically traded companies: AT&T and Verizon. A careful financial analysis of each company must be completed, including the development of the common size statements and financial ratios.

Complete the following steps:

Obtain the most recent annual report for AT&T and Verizon.

Develop common size financial statements for the two companies for the most recent two years available.

Calculate financial ratios for a two-year comparison. Be sure to select financial ratios that are relevant to the telecommunication industry. A minimum of 10 financial ratios must be presented. The financial ratios should be calculated; do not rely upon other finance website to obtain the general financial ratios.

Prepare a financial statement analysis including charts and diagrams.

Present the analysis in formal written format incorporating items 2 through 4 above.

The written analysis should be structured with the following sections for each company:

Company Background: Evaluate market valuation of the bonds and stocks issued by each company, and present an overview of each companys history key products/services and operations. This summary should be between two and three pages long.

Recent Merger and Acquisition (M&A) Activities: Evaluate the effect of interest rates and time value of money by presenting a summary of recent M&A activities for both companies. Your summary should include a brief discussion of the financing tools used and the cost of capital for these M&A activities.

Financial Statements and Common Size Statements: Evaluate and interpret each companys basic financial statements by presenting and discussing the common size financial statements including significant trends or variances. Calculate and discuss the two years of financial ratios.

Overall assessment: Evaluate each companys performance in managing its assets to generate the maximum value to shareholders. Using the information gathered, present an overall assessment of the analysis. Be sure to identify the strengths and weaknesses identified for each company.

After analyzing each company, develop a final conclusion which includes a comparison/contrast of the financial analysis results. Be sure to fully support your conclusion by referring to the analysis provided. The final conclusion should be at least two pages.

Report Specifications/ Guidelines:

Follow accepted research approaches and citation format (APA).

Convey your understanding of the readings and concepts.

Be organized, coherent, and unified.

Check for spelling, structure, and grammatical errors.

Demonstrate graduate-level analytical skills.