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IC 103 001
Fundamentals of Finance
Individual Project (1 – 2024)
Financial Ratio Analysis & Investment Recommendation
The purpose of this activity is to enhance students' understanding of financial ratio analysis and its practical application in investment decision-making. Acting as financial consultants, students will compare a chosen company with its industry peers to evaluate financial health, assess performance, and develop informed investment recommendations. This exercise aims to build students' analytical skills and ability to offer professional, data-driven advice in a consulting context.
Instructions:
1. Start with the company you've selected for analysis, such as Land and House.
2. Select five other companies in the same industry for comparison.
3. Gather financial data for your chosen company and its peers from the past 3–5 years to observe trends, focusing on the ratios across the five categories listed above for both your chosen company and the peer companies.
4. Compare the financial ratios of your chosen company with those of the selected peers.
5. Utilize industry benchmarks to evaluate the relative performance.
6. Analyze your findings and develop an investment recommendation based on the data.
7. Present your analysis and recommendation in a clear, concise report.
Important note:
You are encouraged to select a few key ratios from each category that best serve your analysis rather than using all available ratios. Focus on the ratios that provide the most relevant insights into the company’s financial performance and industry position.
Format
1. Title page
• Include the project title, your name, course, and date.
2. Abstract
• A brief summary of the report's purpose, methodology, findings, and conclusions.
3. Introduction
• Introduce the objective of the analysis and the selected company.
4. Methodology
• Describe the process of selecting companies, gathering data, and conducting the analysis.
• Gather financial data for your chosen company and its peers over the past 3–5 years to observe trends.
5. Analysis
• Present the financial ratios, compare them with industry benchmarks / trends / standards, and analyze the data.
• Analyze historical data over 3–5 years to observe the trend for each key ratio.
• Look for trends, strengths, and weaknesses in each ratio category, noting any significant deviations between your company and its peers.
• Use industry benchmarks or averages to evaluate how each company’s ratios align with or diverge from standard industry performance.
• This step will help contextualize each company’s performance relative to broader industry norms, adding depth to your analysis.
6. Discussion
• Interpret the findings, discuss implications, and provide context.
7. Conclusion
• Summarize the main findings and the investment recommendation.
• Interpret the collected data and identify key insights on your chosen company’s financial health and competitive positioning.
• Based on your findings, develop a data-driven investment recommendation (e.g., buy, hold, or sell). Justify this recommendation with specific references to the financial ratios, peer comparisons, and industry benchmarks.
8. References
• Cite all sources of data and information used in the report.
• Ensure that all sources cited in the report are included in the reference list.
• References may be formatted according to either general APA style or APA Vancouver style. Choose one style and apply it consistently throughout the report.
Submission Requirements and Guidelines
• Length
− The report should be between 3–10 pages (not including the title page and references page).
• Professional format
− Text body font
Use a standard professional font such as Times New Roman or Arial, size 11 or 12.
− Spacing
Single-space the text and use 1-inch margins on all sides.
− Alignment
Use justify.
− Headings
Clearly label each section (e.g., Abstract, Introduction, Methodology, etc.) using bold or a larger font size for easy navigation.
Use a standard professional font such as Times New Roman or Arial, size
14 or 16.
− Page numbers
Include page numbers in the top right corner of each page.
− Tables and Charts
Use tables or charts where necessary to present financial data clearly. Ensure they are labeled and referenced within the text.
− Professional language
Maintain a formal and analytical tone throughout the report. Avoid colloquial language and ensure clarity and conciseness.
• Due Date
− Submit by December 27, 2024, at 23:59 on both Turnitin and via email.
• Originality Requirements:
− The report’s similarity index must not exceed 20%. Reports exceeding this will be assigned a score of zero.
− AI-generated content detection should not exceed 20%. Reports exceeding this threshold will also be assigned a score of zero. If you’re not sure about it, please check it on https://www.zerogpt.com/andhttps://gptzero.me/. However, this will depend on my consideration.
• Submit the files on Turnitin (PDF and Word) and by email (Excel, Word, and PDF).
• Document files
− Submit an Excel file containing your financial calculations and analysis. This file should include:
Results of all financial ratios and comparisons.
Ensure that all formulas used in the calculations are linked (not manually entered values) so that the file reflects your analytical process and allows for verification of your calculations.
− Submit a Word file of your report, following the structured format specified in the assignment instructions. This document will serve as the main report, covering your analysis, interpretation, and investment recommendation.
− Provide a PDF version of the final Word document to ensure formatting consistency upon submission.
• No presentation is required. You only need to submit the project report.