1 ATILIM UNIVERSITY DEPARTMENT OF INDUSTRIAL ENGINEERING IE 206 ENGINEERING COST ANALYSIS-SECTION 01 SPRING 2023 CASE STUDY Dr.alar Utku GLER Purpose: To familiarize the students with financial statement analysis and help them gain hands-on experience on financial comparison of different companies. Details: 1- The case will be conducted in teams of 4 or more students. Each team member should contribute to the project. If you cannot create your teams, I will assign you to a random team. 2- Teams will perform financial statement analysis on the data sets provided. Each team will be given a different data set containing financial data of different company groups. 3- Each team is expected to submit a final report (within 10-20 pages) about their study. The online submission link will be provided in Moodle and each team member is required to submit the same report. The reports softcopy will be submitted due on 05 May 2023, @14:30. 4- Final report (printed) is due on first face-to-face @course hour in class after May 05. 5- The reports will be presented in class starting from May 05. Presentations will not pass 15 minutes for each group. PowerPoint or Prezi can be used. Presentations should be made by each group member. 6- Any similarity between group reports will be strictly penalized. 7- Each group member will be evaluated within the group on scale of 1 to 10. The evaluations will be confidential and will be stored by the instructor. The final grade of the student will be calculated by multiplying the sum of 70% of the report grade and 30% of the presentation grade by the average evaluation divided by 10. Therefore, although your group report and presentation is graded as 100, you can have a 10 from the project if all group members grade you with 1 over 10. 8- Sources of research for the case study may include the internet, any kind of company related financial data, textbooks, research articles and lecture notes. All sources used must be referenced properly, both within the text as well as at the end of the report. Unreferenced material will be strictly penalized. 9- Each group will be assigned with an industry selected from NASDAQ (An American Stock Exchange) by the instructor after you form the groups. 10- Groups will choose 2 companies from their assigned industry (https://www.nasdaq.com/market-activity/stocks/screener) 11- These companies will be comparatively examined for a-three-year perspective from a common stockholder point of view. 12- Groups can select the same industries, no limitations on industry selection. But it is recommended to select an unselected industry. 13- The respective balance sheets, income statements and statement of cash flows will be examined. The companies will be evaluated in terms of liquidity and profitability supported with performance measures like debt ratio, current ratio, p/e ratio, etc. An example financial statement is presented for Amazon. Ex: https://www.nasdaq.com/market-activity/stocks/amzn/financials 2 Group Industry Assignments (Tentative) (https://www.nasdaq.com/market-activity/stocks/screener Use filters) Industry name Financial Healthcare Conglomerates Consumer Goods Services Utilities Energy Technology Industrial Goods Financial Healthcare Conglomerates Consumer Goods Final Report Requirements: (DEADLINE : 05.05.2023 14:30 ) Each team member has to submit a final report, which should include at least the following sections: a) Introduction: (20 %) Brief survey of the industry in which the companies operate, related industry climate and economic developments. Brief survey of the companies chosen by to the group (These may include: year of establishment, type of company, sector operated in, scale/size of operations, basic products/services provided, location etc.) b) Financial Statement Comparison of the companies provided: (30 %) This section should cover the inter-company financial comparison of the companies given in terms of analytical measures to assess (p.652 of the textbook). At least 10 parameters should be calculated: Liquidity Profitability You are expected to implement the methods of horizontal analysis, vertical analysis and ratio analysis for the given data sets to make this inter-company comparison. Some questions about your analysis can be as below: What kind of comments/interpretations/suggestions can you make about the position of this company? Would you select this company if you were investing in the stock market? Would you trust this company if you were a bank providing long term loan? As a manager of the company, what are the alarms that you can see from the data set? What proper precautions would you suggest? c) Comparison against the related sector: (20 %) This section should cover the financial comparison of the companies given against the average industry behavior. For this, you should make a survey on the financial situation of the sector pertaining to your data set. What can you say about the average liquidity, profitability and cash flow adequacy for your sector? Has there been a specific trend for these average industrial values over the years in your sector? What can you comment on the stability of the sector? 3 What are the positions of the companies given in your data set, when you compare against the average industrial behavior? d) Conclusion and comments: (20%) This section should contain: Comments, suggestions and discussions on the financial results that you have reached about the given sector and companies. Your future projections about the sector you have analyzed. The main problems and difficulties faced during your study. e) Report format and organization : (10%) Your title page should include your group name (each group should choose a name), group member names, date, company and sector analyzed. Proper referencing of all figures, charts and tables within the report is required. Be careful with the organization and numbering of your appendices. You should include a list of references at the back of your report. These sources must be referred to within your text as well. Be careful with your pagination, bulleting and headers. Your report should be typed with a word processor and should be spell checked. Be consistent in terms of format throughout the report.