• Background Information/Environmental Scan
• DuPont Identity
• Current Ratio
• Quick Ratio
• Inventory Holding Period
• Average Collection Period
• Debt Ratio
• Free Cash Flow
• Market Value Added
• Economic Value Added
• Dividend Yield
• Required Rate of Return based on the Capital Asset Pricing Model

After calculating the above items, the student will make a recommendation to buy, sell, or hold the company’s common stock at its current price. The recommendation should be based on the calculations required plus any other information about the company that the student believes pertinent.

In a separate section of the paper, the student will describe a situation in which his/her company would make use of capital budgeting. No calculations are required. This section of the paper would be about one to two pages describing the process that the company would make use of for analyzing the capital budgeting situation.

In a third section of the paper, the student should describe how the company would use cost-volume-profit analysis for one of its products. No calculations are necessary; just provide an explanation of how the process works. This section of the paper should be one to two pages.

For the purpose of this exercise, students will choose a company for which they will conduct an environmental scan and a financial analysis. The analysis of the company should culminate with students recommending that the company is “excellent,” “healthy,” or “ill.” Students will be evaluated based on correctness of the calculations, the insight of the analysis, and the quality of the discussion relating to the requirements.

Additionally, students will be expected to prepare an executive summary of the process of capital budgeting, using an example that is specific to the company that is being analyzed. An executive summary of cost-volume-profit analysis is also required, using an example that is specific to the company that is being analyzed.

The written paper is to be typed double–spaced, 1’ margins, Times New Roman and 12-point font, with correct spelling and grammar, proper citation, references, with a cover page and organized with headings. The instructor’s approval of the topic is required.