Case Study: Historical Financial Analysis

Overview

Complete a case study of ABC Corporation.  You will find the case in the case section of the text.

A formal, in-depth case study analysis requires you to utilize the entire strategic management process. Assume you are a consult asked by the ABC Corporation to analyze its external/internal environment and make strategic recommendations. You must include exhibits to support your analysis and recommendations.

Instructions

The completed case study must include these components, with portions to be submitted over several modules as the Case Study: Matrices Assignment, the Case Study: Historical Financial Analysis Assignment, and the Case Study: Projections, NPV, Compilation Assignment.

• Cover page (must include the company name, your name, the date of submission, and a references page; the document must follow current APA guidelines)
• A total of 12 – 15 pages (for all three parts, combined) of narrative text, this does not include the financial statements, reference pages, or matrices
• Reference page (follow current APA guidelines)
• Historical Financial Statements, Proforma Financial Statements, NPV Calculations and a Cost Sheet for the strategy in an Excel document
• Matrices, which must be exhibits/attachments in the appendix and not part of the body of the analysis (The Strategy Club has excellent templates/examples for exhibits and matrices).

Your Case Study: Historical Financial Analysis Assignment paper must include:

1. Historical Financial Statements (Income Statement, Balance Sheet and Statement of Cash Flows) from the 3 most current years for the firm.  These should be downloaded from the SEC website.  The financial statements must include horizontal (shown between the years) and vertical analysis (shown to the right of the last year of historical data).
2. Ratio analysis for the ratios shown on Table 1 in the Guide to Case Analysis (CA) of the textbook:
   1. Profitability ratios
   1. Liquidity ratios
   1. Leverage ratios
   1. Activity ratios
   1. Price-to-earnings ratio
   1. The changes between years are included in the calculations.
3. Competitor ratios to compare with the ratios that were calculated in item 2.  These should be included on the same tab as the ratio analysis for the firm.
4. Financial analysis should include comparisons to the firm’s main competitor as well as to the industry.  How does the financial position of the firm influence the strategic direction of the company?  This section should not be used to define what each ratio is rather it should clearly provide analysis based on the calculations as to the strategic choices and implications of the firm’s financial position.  A compare and contrast with the main competitor should be included in this section of narrative.

Place the results of Case Study: Historical Financial Analysis, in the Case Study: Historical Financial Analysis submission link in Module 6: Week 6.

Options to Download SEC Financial Data into Excel Spreadsheets:

There are two ways to pull financial data in Excel format from the SEC site, depending on how recent the information is.

OPTION 1: For filings that are a year or two old

• Go to www.sec.gov.
  • In the Filings & Forms box, click on Search for Company Filings.
  • Then click on Company or fund name, ticker symbol, CIK (Central Index Key), file number, state, country, or SIC (Standard Industrial Classification).
  • Enter either a company name or ticker symbol into the appropriate box. (Note: it may be easier to use a ticker symbol because this guarantees you have the right company.) Choose Find Companies.

• On the next screen, select the appropriate filing or filter by filing type (10-K).
• Newer filings have two button options: Documents and Interactive Data. Select Interactive Data if that is an option.

• Once in Interactive Data, select financial statements. A drop-down box will appear in the left-hand column. Select the statement that you want. Then, click View Excel Document above the left-hand column.
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OPTION 2: For older filings

• Follow the steps in Option 1 to get to the company filing screen.  Since Interactive Data will not be available, click on Documents.
  • There will be several options. Find the link containing the full filing. This is usually the first link but not always. For a 10-K filing look for a link titled 10-K.

• Open Excel. Click on the Data tab in the ribbon and select From Web, the second icon from the left.
  • A web browser will open up. Copy the link from the company 10-K and insert it into the New Web Query browser that opened up. Click Go to be taken to the filing. (Note: The browser sometimes runs slow.)
  • Find the financial tables you wish to import. Above the tables you should see a yellow box with a black arrow pointing to the right. Click on each box corresponding with each financial table that you wish to import. The box will turn green with a check mark. 
  • Once all desired tables are selected, click the Import button at the bottom right of the web browser.
  • You will be taken back into the Excel spreadsheet with an Import Data box open. To import the data, select either a cell in the existing worksheet or New Worksheet and click OK.
  • Data will be uploaded into Excel. Note that this process does a poor job of formatting the tables. Brackets indicating negativity and currency symbols are often placed in adjacent cells, necessitating manual entry. For year-over-year analysis across multiple filings be careful to ensure that financial sheet items line up with one another.