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RESM 5510 Financial Performance Analysis Report Template

To complete this report, you must choose either a publicly traded company or a nonprofit organization and evaluate the chosen organization’s financial position and performance based upon what you have learned from this class. Please read the following instructions before working on the report. Since you have two options (e.g., for-profit or nonprofit), two separate instructions and templates are provided.

Instructions for For-Profit Organization

If you are to choose a publicly traded for-profit organization, the following are the contents that I expect you to include:

1. Title Page and Table of Contents (5 pts)

2. Introduction (10 pts)

3. Business Model (15 pts)

4. Financial Issues & Risk Factors (15 pts)

5. Financial Position and Performance (20 pts)

6. Competitor Analysis (15 pts)

7. Overall Evaluation (5 pts)

8. Future Trend (5 pts)

9. Appendices & References (5 pts)

· Screenshots of stock prices, financial documents (e.g., 10-K, proxy), etc.

· Bibliography of any sources you referenced in your text (APA format: APA Style Guide)

10. Organization & Formatting (5 pts)

Please DELETE this instruction section when you finalize your paper. The template provides the overall organization and style of the final paper. It also includes my expectations for each section/part, as well as the required contents. The following is the suggested template for a publicly traded for-profit organization.

RESM 5510 Financial Performance Analysis Report

Name of your target organization

Your name

Date

Table of Contents Introduction x Business Model x Financial Issues & Risk Factors x Financial Position and Performance x Competitor Analysis x Overall Evaluation x Future Trend x References x Appendices x

Introduction

For this section, please locate and provide general information about your target organization. Some information you should include:

· Who is this company? (e.g., Founder, CEO, executive officers, original name, what does the company do, what industry are they in, how long have they existed, when did they become a publicly traded company, etc.)

· Company location (e.g., where are they located, how many locations, which countries, where is the headquarters, which state or country is the company incorporated in, etc.)

· How many employees do they have?

· Any general information you find about the company/organization can be included.

One of the simple ways to collect general information about your target organization is obtaining financial documents. In general, there are two ways to obtain financial documents of publicly traded companies:

· The U.S. Securities and Exchange Commission (SEC)

The SEC requires public companies, certain company insiders, and broker-dealers to file periodic financial statements and other disclosures. The SEC database for company filings, which includes quarterly and annual reports, registration statements for IPOs and other offerings, insider trading reports, and proxy materials, can be obtained in electronic form by using the SEC’s EDGAR system. Please go to the following link and search for the name of your target company or stock symbol: EDGAR.

Then, you will see financial documents (i.e., company filings) of your target company, as well as brief descriptions of the filings.

· Company Website

We can also obtain financial documents and SEC filings from a company’s website. Let’s say we are interested in American Express [APX]. Below are the steps you could follow:

· Go to the company’s website: American Express.

· You will find ‘Investor Relations’ under the ‘ABOUT’ menu at the bottom of the website.

· Once you click ‘Investor Relations,’ find the ‘SEC Filings’ and click the ‘View All SEC Filings’ menu.

· Then, you can find various types of SEC filings of the company.

Please note that not all companies have the same layouts. Some companies use ‘Investor Relations,’ while the others may use just ‘Investors.’ Accordingly, you could simply use Google and search for ‘American Express investor relations.’ Then, it will directly take you to the ‘Investor Relations’ menu of American Express. The useful financial documents (SEC filings) are listed on Module 2 Readings on Canvas. As you know, Form 10-K includes an overview of a company’s main operations and its products and services. That means you must obtain 10-K of your target company when completing this section. Please make sure to provide a snapshot of the company’s profile. This section should be less than one page, but more than a half-page (around 2-3 paragraphs).

When you start a new paragraph, make sure to indent one inch.

Business Model

In this section, you should describe the primary (core) business of your target company, its subsidiaries, and ownership structure. You will find your target company’s business model and revenue streams on Form 10-K and 10-Qs. Please refer to Part I of 10-K, which provides all the business activities of your target company. You will also find the most recent sources of revenues from Form 10-Qs.

In terms of subsidiaries, you will find information about subsidiaries or a parent company of your target organization from the 10-K. If your target company does not have any subsidiaries, please focus on its business units, brands, or products or services the company offers. Unlike the introduction section, where you briefly describe your company’s products and services, you should articulate specific products and services your target company offers to its customers and clients.

Finally, this section should include information about ownership of your target company. You will find such information from 10-K and Proxy. Forms 3, 4, and 5 also provide changes in ownership of a company's stock and securities. The proxy statement (Form DEF 14A) contains information about corporate governance (e.g., the board of directors and executive officers). It also provides stock ownership information about a company. A couple of examples of information to explain include:

· Who are the largest shareholders of the company and what percent share do they own (try to provide at least three entities and/or individuals who have the most shares)?

· Who are the company’s officers and/or executives (i.e., CEO, CFO, COO, President, Vice-President, Board of Directors, etc.)?

This section should be around one page. Make sure to indent one inch when you start a new paragraph.

Financial Issues & Risk Factors

As you may already know, Form 10-K contains any and all risks a company faces or may face in the future. Usually, risk factors that the company identified are listed in order of importance. Please select the top three risk factors on the 10-K that you think the ones are most critical for the organization’s survival. Please make sure to describe why each is a risk for your target company, not just copy and paste from the 10-K.

I also expect you to search for other risk factors from the most recent news articles. Please search for the most recent news articles which discuss risks and/or challenges your target company could be negatively affected by. News articles must be from reliable sources. For instance, the following list is considered reliable.

· Yahoo Finance

· Google Finance

· Wall Street Journal

· CNBC

· MarketWatch

· Reuters

· CNN

· USAToday

· Bloomberg

· USNews

· Guardian

· Financial Times

· FoxBusiness

· NPR

· Other major news media

Please note that the news articles do NOT have to be directly about your company; they can be about the industry your company is in (only if you cannot find ones about your target company). Once you locate a couple of news articles, briefly summarize the news articles and explain why you think the risk and/or challenge described in the news articles would negatively affect your target company.

This section should be 1-2 pages, but no more than two pages. Make sure to indent one inch when you start a new paragraph.

Financial Position and Performance

Financial Statement Analysis

Please recall that there are several ways to look at the financial performance of a company and understand what is happening with it. When conducting financial analysis, it is imperative to look at a collection of financial information rather than a single one. That means you should examine the three key financial statements to see how the company’s assets, liabilities, equity, revenues, expenses, and cash flow have changed over time, in addition to calculating financial ratios. Of course, you should examine financial statements before conducting ratio analyses.

In this section, please examine the three key financial statements (i.e., balance sheet, income statement, and cash flow statement) to explain how the number on the statements have changed. For instance, please explain how assets, liabilities, and shareholder equity have changed past 2-3 years by comparing the most recent balance sheet and previous ones. You can also track the changes in revenue and expenses, particularly net revenue, by examining the recent and past income statements. Finally, you can explore how the company’s cash positions (and various financial activities) have changed in recent years by analyzing the recent and past cash flow statements.

This sub-section should be around one page. That means I expect you to highlight only some of the notable changes and figures instead of listing how all numbers on financial statements have changed last several years. 

Financial Ratio Analysis

Please recall the Module 2 quiz. Like you calculated 15 financial ratios of Under Armour, you should calculate 15 financial ratios of your target company. I strongly recommend you create a table containing the calculated ratios instead of spelling out all financial ratios. After calculating financial ratios, please explain notable ratios. You don’t have to explain all ratios; please highlight only notable figures based on suggested threshold values.

When calculating firm valuation ratios, you need to obtain the most recent stock price of your target company. Please use Yahoo Finance, Google Finance, stock exchanges, or major news media (please refer to the previous section). This sub-section should be less than one page, meaning that a table containing all financial ratios is strongly recommended to reduce the length of the text. When you create a table, insert the table at the end of the section after stock price analysis. Please note that the table should also follow the APA style.

Stock Price Analysis

As I indicated in the guideline, you MUST provide three (3) screenshots that show the stock price of your company on three different dates throughout the semester. Please describe how the stock price has changed over time. If possible, please also include dividends information. For instance, please try to find how much your target company has provided (if any) dividends to shareholders over the past few years (or at least the last three dividends payouts). If your company does not provide dividends to shareholders, what is the benefit of owning stock in the company? This sub-section should be less than one page.

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Insert financial ratio table here

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Competitor Analysis

Financial Statement Analysis

This section is similar to the previous section. For this section, you should first identify the target company’s competitors and select one major competitor. To identify competitors:

1. Please go to CSIMarket.com.

2. Search for your target company. Please use the ‘GREEN’ search box to search for your target company. When you search for your target company, you will be able to see your target organization's ‘sector’ and ‘industry.’ For instance, if you search for Nike, you will notice that Nike belongs to the ‘Consumer Discretionary’ sector and ‘Apparel, Footwear & Accessories’ industry.

3. Find some competitors in the same industry sector. When you click the ‘industry’ of your target organization (e.g., Apparel, Footwear & Accessories), you will see companies in that industry. Please select ONE major competitor of your target organization from the list.

Most importantly, your major competitor MUST be a public company who is trading stocks on U.S. stock markets. Please select a U.S.-based company. Then it will make your life a little easier. Once you identified a major competitor, you should do another round of financial analysis of the competitor. For instance, let’s say you are targeting Fitbit. Then you could select Garmin as the major competitor and conduct competitor analysis focusing on Garmin. Most importantly, the major competitor, Garmin, must be a public company. Please refer to the previous section for the suggested contents and length of the texts.

Financial Ratio Analysis

Please refer to the previous section. Again, you are expected to another round of financial ratio analysis of your major competitor. You could also create a table containing the financial ratios of the competitor company at the end of the section, after stock price analysis.

Stock Price Analysis

Please follow the instruction in the previous section. For the competitor, you don’t have to provide screenshots of the competitor’s stock prices. Please briefly explain changes in stock prices over time and include dividends information.

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Insert competitor financial ratio table here

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Overall Evaluation

Please provide a financial summary of your target company based on previous sections. I expect you to compare the financial performance of your target company to that of your competitor. Please do not solely focus on financial ratios. You should also summarize some notable figures on the financial statements of both companies. In terms of financial ratios, you should compare your target company’s financial performance with the industry average in addition to those of a major competitor. Please use CSIMarket.com to find industry average values.

This section should be around one page. Please try to be as succinct as possible.

Future Trend

Predict the trend for this company in the next five years based upon your research (e.g., anticipate new business or new revenue streams which they can create in the near future). Please search for the most recent news articles, industry reports, or even research articles that address the future of your company or the industry where your company belongs. Please include at least three outside sources (references) that describe the future of your target company or the industry. Finally, based on the overall analysis of your target company, please discuss your opinion on whether to buy or sell the stocks of the company. Please include at least one outside source (or reference) which agrees with your recommendation or opinion.

This section should be around one page.

References

Please break a page before listing references. Include a bibliography of any sources you referenced in your text (make sure to put everything in APA format).

Refer to the following link: APA Style Guide

Appendix A

Please break a page before including any appendices. Include any information you feel the reader should have but not critical to put in the body of your analysis (e.g., pictures, research data, statistical information, etc.).

Please provide three (3) screenshots that show the stock price of your company on three different dates throughout the semester.

Please also attach the most recent 10-K and proxy (DEF 14A) of your target company.

Instructions for Nonprofit Organization

If you are to choose a nonprofit organization, the following are the contents that I expect you to include:

1. Title Page and Table of Contents (5 pts)

2. Introduction (10 pts)

3. Nonprofit Management and Operations (15 pts)

4. Financial Issues & Risk Factors (15 pts)

5. Nonprofit Financial Position and Performance (20 pts)

6. Competitor Analysis (15 pts)

7. Overall Evaluation (5 pts)

8. Future Trend (5 pts)

9. Appendices & References (5 pts)

a. Form 990(s) and annual report(s)

b. Bibliography of any sources you referenced in your text (APA format: APA Style Guide)

10. Organization & Formatting (5 pts)

Please DELETE this instruction section when you finalize your paper. The template provides the overall organization and style of the final paper. It also includes my expectations for each section/part, as well as the required contents. The following is the suggested template for a nonprofit organization.

RESM 5510 Financial Performance Analysis Report

Name of your target organization

Your name

Date

Table of Contents Introduction x Nonprofit Management and Operations x Financial Issues & Risk Factors x Nonprofit Financial Position and Performance x Competitor Analysis x Overall Evaluation x Future Trend x References x Appendices x

Introduction

For this section, please locate and provide general information about your target nonprofit organization. Some information you should include:

· Who is this nonprofit organization? (e.g., Founder, mission and vision statements, type or category of the nonprofit organization)

· Location (e.g., where are they located, how many locations, which countries, etc.)

· How many staff and employees do they have?

· Any general information you find about the organization can be included.

One of the simple ways to collect general information about your target organization is obtaining a financial document (i.e., Form 990). In general, there are a couple of ways to obtain Form 990 of a nonprofit organization:

· Internal Revenue Service (IRS)

The IRS requires nonprofit organizations to file periodic financial statements and other disclosures. Form 990 is intended to provide the government and interested members of the public with a snapshot of the organization’s activities for that year. Please go to the following link and search for the name of your nonprofit organization: IRS.

· Nonprofit Organization Website

Some nonprofit organizations provide their Form 990s and annual reports on their websites. Please note that not all nonprofits disclose their financial documents and annual reports online.

· Charity Navigator & Guidestar

Charity Navigator is a charity assessment organization that evaluates nonprofit organizations based in the U.S. The organization provides nonprofit financial documents and examines a nonprofit organization’s financial performance. Guidestar is an information service organization that provides a database of IRS-recognized nonprofit organizations. It also provides its own financial analyses of nonprofit organizations.

Please utilize various sources of information to describe your nonprofit organization. This section should be less than one page, but more than a half-page (around 2-3 paragraphs).

When you start a new paragraph, make sure to indent one inch.

Nonprofit Management and Operations

In this section, you should describe the structure, governance and leadership, and sources of revenue and expenses of your nonprofit organization. In terms of organizational structure and leadership, you can refer to the nonprofit organization’s website. You can also examine Part VII of the nonprofit’s Form 990, which contains information about officers, directors, trustees, and employees, as well as independent contractors. Form 990 Part I provides a summary of nonprofit governance, including a total number of employees and volunteers, and voting members. Please describe such stakeholders who are involved in managing and providing services to the nonprofit organization.

Part III of Form 990 involves the nonprofit organization’s accomplishments, including its mission statement and the expenses and revenues for the organization’s three largest program services. Part I also provides a summary of revenues, expenses, and net assets or fund balances of the nonprofit organization. Schedule G Part II involves fundraising events of the organization, while Schedule I Part II lists grant disbursements to other organizations. Using this information, please describe the nonprofit’s fundraising events and activities, as well as its expenses. You could also refer to the nonprofit’s website to check what nonprofit programs they provide to achieve its missions.

This section should be around one page. Make sure to indent one inch when you start a new paragraph.

Financial Issues & Risk Factors

Unlike Form 10-K of publicly traded companies, Form 990 does not provide any risks a nonprofit organization faces or may face in the future. Accordingly, please search for risk factors from the most recent news articles. Please search for the most recent news articles which discuss risks and/or challenges your target organization could be negatively affected by. News articles must be from reliable sources. Please try to read recent news articles from major news providers. You can also refer to research databases or research institutions, such as Giving USA, National Center for Charitable Statistics, Candid, Independent Sector, Council on Foundations, and many others.

Please note that the news articles do NOT have to be directly about your nonprofit organization; they can be about the recent trends and issues of the entire nonprofit sector. Once you locate a couple of news articles, briefly summarize the news articles and explain why you think the risk and/or challenge described in the news articles would negatively affect your organization.

This section should be 1-2 pages, but no more than two pages. Make sure to indent one inch when you start a new paragraph.

Nonprofit Financial Position and Performance

Financial Document Analysis

Please recall that nonprofit organizations are required to file Form 990 to the IRS, and some nonprofits publish annual reports to highlight a nonprofit organization’s mission and impact, thank volunteers and supporters, and make a case for donating to the organization. To complete this section, you must obtain and analyze Form 990 of your target nonprofit organization. If the organization also publishes an annual report, please obtain the report as well.

As you know, Form 990 contains three key financial statements of a nonprofit organization (i.e., Part VIII Statement of Revenue, Part IX Statement of Functional Expenses, and Part X Balance Sheet). Please examine these three sections of Form 990 and explain the following items:

Part VIII (Statement of Revenue) – the amount of contributions, gifts, and grants, program service revenue, other revenue sources, and total revenue

Part IX – total functional expenses and categories and amount of program service expenses, administrative expenses (management and general), and fundraising expenses

Part X – assets, liabilities, and unrestricted and restricted net assets

Please try to obtain Form 990s for the past 2-3 years and explain how the numbers above have changed over time.

This sub-section should be around one page. That means I expect you to highlight only some of the notable changes and figures instead of listing how all numbers on financial statements have changed last several years.

Nonprofit Financial Ratio Analysis

Please recall the Module 3 quiz. Please calculate six (6) nonprofit financial ratios. I would also expect you to explain what the results mean. Please refer to Module 3 Lecture and try to explain as best as you can for each ratio. You may create a table containing the financial ratios of your nonprofit organization.

This sub-section should be less than one page. If you can explain all six financial ratios on one page, you don’t necessarily have to create a table. However, if you want to reduce the length of the text, please create a table and insert it at the end of the section. Please note that the table should also follow the APA style.

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Insert financial ratio table here

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Competitor Analysis

Financial Document Analysis

This section is similar to the previous section. For this section, you should first identify a major competitor or benchmark of your nonprofit organization. Please try to find one that shares a similar mission and provides similar programs and services to your target organization. Then conduct another round of financial document analysis of the competitor or benchmark organization. Please refer to the previous section for the suggested contents and length of the texts.

Nonprofit Financial Ratio Analysis

Please refer to the previous section. Again, you are expected to another round of nonprofit financial ratio analysis of your major competitor or a benchmark organization. As noted, please explain all six financial ratios. You may create a table containing the financial ratios of the competitor at the end of the section.

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Insert competitor financial ratio table here

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Overall Evaluation

Please provide a financial summary of your target organization based on the previous two sections. I expect you to compare the financial performance of your target organization to that of your competitor. Please do not solely focus on financial ratios. You should also summarize some notable figures on the financial statements of both organizations. In terms of financial ratios, you should compare your target company’s financial performance with the regional and national average in addition to those of a major competitor. Please refer to Charity Navigator’s 2017 Metro Market Study to find regional and national average values.

This section should be around one page. Please try to be as succinct as possible.

Future Trend

Predict the future of your nonprofit organization in the next five years based upon your research (e.g., anticipate new programs or new revenue streams which they can create in the near future). Please search for the most recent news articles, industry reports, or even research articles that address the future of your organization or the entire nonprofit sector. Please include at least three outside sources (references) that describe the future of your target organization or the nonprofit sector. Finally, based on the overall analysis of your target company, please discuss your opinion on whether the nonprofit organization is worth donating. Please include at least one outside source (or reference) which agrees with your recommendation or opinion.

This section should be around one page.

References

Please break a page before listing references. Include a bibliography of any sources you referenced in your text (make sure to put everything in APA format).

Refer to the following link: APA Style Guide

Appendix A

Please break a page before including any appendices. Include any information you feel the reader should have but not critical to put in the body of your analysis (e.g., pictures, research data, statistical information, etc.).

Please attach the most recent Form 990 of your nonprofit organization.

Please include the most recent annual report of your nonprofit organization, if any. No need to include one if your nonprofit organization does not publish an annual report.

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RESM 5510 Revenue Generation and Financial Management in Recreation, Event, and Sport Organizations

Financial Performance Analysis Report Guideline (100 Points)

For the financial performance analysis report, every student must choose either a publicly traded company or a nonprofit organization to complete a semester-long project. The objectives of the report are as follows:

· Investigate target organization’s core business model, organizational structure, units, and practices (e.g., mission, visions, subsidiaries, revenue streams, and key projects) and issues (e.g., merger and acquisition, personnel, and risks)

· Analyze financial data and cases from a number of financial viewpoints

· Evaluate the organization’s financial position based upon what students have learned from this class.

The paper should include some information about the company/nonprofit organization in general: Who is this organization (e.g., leadership, management, founder, the board of directors, etc.)? Where is it located? How many locations? How long has it been in business? How many employees? What does it primarily do? What market sector is it in? Who are its competi