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Create a 6-8 page report that analyzes financial ratios for a selected company, uses the data to tell the financial story of that company, and concludes with a recommendation on whether the company would be a viable partner based on its financial condition.

Introduction

It is essential for financial advisors and upper management to know the financial condition of a company for a variety of reasons, including to improve its condition, to make decisions to increase shareholder value, and to know the true value of the entity. Such an analysis is important for any business, small, medium, or large.

This portfolio work project gives you a chance to apply the skills expected of an MBA graduate; from the financial management perspective, you should be able to: 

• Tell the financial story based on financial statements. 
• Conduct a financial analysis and identify focus areas for enhancing shareholder value.
• Interpret ratio computations that are meaningful and inform business decisions and strategies.

Scenario

Maria Gomez is founder and president of PacificCoast Technology, a small technology company. She is considering being bought out by a larger publicly traded company so she can be rewarded financially for all of her entrepreneurial efforts. She calls you into her office and says:

Thank you for meeting with me today. I’d like to talk to you about the future of the PacificCoast Technology. I’ve been running this company for a long time now, and I think it’s time for me to consider the next five to ten years. I want to find a buyer for this company who can take it to its full potential but with me still leading it. I still want to be a part of the journey, to see this company’s growth, which means this potential buyer needs to be a high quality company with solid financial health. That’s the only way we’ll be sure there’s going to be necessary funds and stability for the firm to grow. 

You are ready to take on this project to assist Maria with her vision to find a buyer to take the company into the next phase. At your desk, you review these additional meeting notes: 

• The acquiring company does not need to be in the same industry, as Maria values financial strength over any synergistic benefits.
• Maria wants you to select a company and then examine its financial condition by analyzing its financial statements and using financial ratio analysis. She indicated that using both trend analysis—going back at least three years—and industry average analysis would be helpful information for her. 
• From this analysis, Maria wants you to tell the financial story of the potential buyer/company by listing its financial strengths and weaknesses.
• She expects you to provide a list of actionable decisions so she can understand if the company would be a potentially viable corporate partner.  

Your Role

You are one of Maria’s high-performing managers at PacificCoast Technology, and she trusts your work and leadership. 

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