A project based on Exxon gas station

1. The past five years income statement information of EXXON GAS station. This should include the percentage increase/decrease of the revenue, gross profit, operating profit, net profit, EPS, and dividends. Provide a narrative as to the changes over that period. Compare the companys results to the industry averages or to a main competitor.

2. Do the same for the balance sheet. How has it changed? For example, has the company taken on more debt? Increased or initiated a treasury stock purchase?

3. Apply ratio analysis for the five years including profitability (Gross profit margin, Net profit margin, and return on equity), liquidity (Current ratio), Market based (P/E, Market to book), Financial leverage management (Debt ratio, times interest earned), and Asset management (Fixed asset turnover, Total asset turnover) and Dupont Models (ROA and ROE). Compare the company to the industry averages or to a main competitor.

4. Apply the constant growth model (P = D1/R - g to value the stock. You can find the required return by manipulating the constant growth model as follows: R = D1/P + g

P = the current price of the stock

D1 = the next dividend D0(1 + g)

R = the required return

g = the growth rate of the dividend

5. Who is the CEO and how long has that person been in that position? What is the make-up of the board of directors? How many insiders/outsiders? Have those individuals been buying or selling shares of the company in the past year?

6. Look at the notes to the financial statement from the last annual report. Is there anything that stands out or should be of concern?

7. Has the company been buying other firms during the five years? If so, name these additions.

8. Find articles from reputable sources over the five years and include a synopsis of what has been written.

9. Use the Capital Asset Pricing Model to find the required return of your stock.

R = Rf + (Km Rf)B

R= Required return

Rf = the risk-free rate

Km is the expected return of the market

B = Beta

(You can use Yahoo finance to find the companys beta)

10.Explain whether you would buy this stock at this time.