1. After reviewing company reports for the past two years and the Morningstar financial statements for the past five years, respond to the following questions a) List and discuss two of the most important issues you observed in the financial performance of the company over the past five years. b) List two examples of strategic objectives and discuss how well the company is performing relative to these over the past three years. 2. After a review of the external and internal environment for this company, identify what are the most important issues for the company in preparation to answering the following questions. Be sure to consider areas in the macro and immediate competitive environment, as well as firm resources and capabilities in answering the following questions. a) List and summarize the important issues you find in terms of S.W.O.T b) Summarize your conclusions in a situational analysis for this company, drawing from your analysis of company performance to date, its position in its industry among competitors, and the factors influencing the industry going forward. 3. With the analysis conducted to this point, consider realistic strategic options going forward in the following questions a) State and evaluate up to two reasonable strategic alternatives the company could consider in moving forward. b) Which alternative would you recommend to management, and why? Financials Export Ascending 2009-02 2010-02 2011-02 2012-02 2013-02 2014-02 2015-02 2016-02 2017-02 2018-02 TTM 8,976 10,004 10,963 12,574 14,269 15,150 15,87517,120 17,939 13.5 708 7,470 Revenue USD Mil Gross Margin % Operating Income USD Mil Operating Margin % Net Income USD Mil Earnings Per Share USD Dividends USD Payout Ratio % * Shares Mil Book Value Per Share USD Operating Cash Flow USD Mil Cap Spending USD Mil Free Cash Flow USD Mil Free Cash Flow Per ShareUSD Working Capital uSD Mil 6,974 13.8 13.1 13.2 13.3 13.6 104 396 438 433 493 630 667 695 712 282 381 414 434 493 597 623 627 664 772 0.27 1.79 2.73 3.03 3.26 231 228 14.83 613 219 15.24 968 179 20.20 227 219 192 16.16 -468 -418 886 184 14.95 -149 316 -464 8.28 10.15 13.38 -778 236 -1,014 18.36 265 -185 79 -173 -297 923 -4.53 1,768 -235 1,278 -377 0.41 797 1,079 902 1,207 1,626 1,602 1,467 1,768 1,887 Indicates calendar year-end data information Key Ratios Profitability Growth Cash Flow Financial Health Efficiency Ratios Margins % of Sales Revenue COGS Gross Margin SG&A R&D 2009-02 2010-02 2011-02 2012-02 2013-02 2014-02 2015-02 2016-02 2017-02 2018-02 100.00 86.40 13.60 100.00 85.50 14.50 10.08 TTM 100.00 86.52 13.48 100.00 86.22 13.78 100.00 86.64 13.36 100.00 86.89 13.11 100.00 86.77 13.23 8.81 100.00 100.00 100.00 86.67 13.33 100.00 13.88 14.71 13.75 10.96 er 4.41 4.40 4.16 Operating Margin Net Int Inc & Other EBT Margin 1.23 1.39 4.38 3.95 3.92 4.41 4.38 3.95 4.67 1.39 6.06 6.84 6.67 6.40 6.34 6.79 6.67 6.34 6.21 5.95 Profitability Tax Rate % Net Margin % Asset Turnover (Average) Return on Assets % Financial Leverage (Average) Return on Equity % Return on Invested Capital % Interest Covera 2009-02 2010-02 2011-02 2012-02 2013-02 2014-02 2015-02 2016-02 2017-02 2018-02 TTM 38.83 37.75 37.95 38.08 37.70 37.56 27.65 1.32 4.56 4.80 4.50 4.08 2.98 18.03 9.09 198.26 4.99 16.67 15.26 15.55 18.45 20.67 ge 16.91 131.78 26.86 40.61 18.83 15.33 Key Ratios Profitability Growth Cash Flow Financial Health Efficiency Ratios Margins % of Sales Revenue COGS Gross Margin SG&A R&D 2009-02 2010-02 2011-02 2012-02 2013-02 2014-02 2015-02 2016-02 2017-02 2018-02 100.00 86.40 13.60 100.00 85.50 14.50 10.08 TTM 100.00 86.52 13.48 100.00 86.22 13.78 100.00 86.64 13.36 100.00 86.89 13.11 100.00 86.77 13.23 8.81 100.00 100.00 100.00 86.67 13.33 100.00 13.88 14.71 13.75 10.96 er 4.41 4.40 4.16 Operating Margin Net Int Inc & Other EBT Margin 1.23 1.39 4.38 3.95 3.92 4.41 4.38 3.95 4.67 1.39 6.06 6.84 6.67 6.40 6.34 6.79 6.67 6.34 6.21 5.95 Profitability Tax Rate % Net Margin % Asset Turnover (Average) Return on Assets % Financial Leverage (Average) Return on Equity % Return on Invested Capital % Interest Covera 2009-02 2010-02 2011-02 2012-02 2013-02 2014-02 2015-02 2016-02 2017-02 2018-02 TTM 38.83 37.75 37.95 38.08 37.70 37.56 27.65 1.32 4.56 4.80 4.50 4.08 2.98 18.03 9.09 198.26 4.99 16.67 15.26 15.55 18.45 20.67 ge 16.91 131.78 26.86 40.61 18.83 15.33