Overview: Your group will pick two publicly traded manufacturing companies from the list below: Aerospace & Defense:

1 Boeing Co. & Northrop Grumman Corp.

Alliant Techsystems Inc. & United Technologies Corp.

Textron Inc. & Raytheon Co.

Lockheed Martin Corp. & BE Aerospace Inc.

Communications Equipment: Harris Corp. & EchoStar Corp.

Ciena Corp. & Qualcomm Inc.

Exelis Inc. & Rockwell Collins Inc.

Electrical Equipment & Appliances: Whirlpool Corp. & Acuity Brands Inc.

Diebold Inc. & Belden Inc.

Emerson Electric Co. & Lennox International Inc.

EnerSys Inc. & Hubbell Inc.

Middleby Corp. & SunPower Corp.

Exide Technologies & A.O. Smith Corp.

Retailing Home Depot & Lowes

Submit your selection to me for approval so we can avoid duplication of companies wherever possible so first come, first served as to choices. Your group will function as an investment advisory firm to a large manufacturing conglomerate. Once you have selected your companies and have been approved, the group members will begin an in-depth analysis of the companies. The analysis will be comprised of several elements, such as the companys most recent financial statements, as well as learning all you can about the companies in terms of products, success within their industry, and any current news that would be relevant to your firm. In your financial analysis, you should be looking at such things as revenue, manufacturing costs, net income, cash, etc. Your analysis will also require you to answer the questions below. You will also take into account other factors that would influence your decision whether or not to recommend purchase of this stock. Some items in this category might include a new product or service, recent cost cutting moves, or consolidation or merger with another company. Finding this information will be part of your research for the project. Requirements: Your group will be required to submit both an introductory one-page summary as to why you have chosen youre the particular companies and a final written report. The final report will include a recommendation to the Board of the Directors of the manufacturing conglomerate as to which of the two should be considered for acquisition purposes. Your final report written must be a minimum of three pages, a maximum of five. All summaries and written assessments must be type-written using MS Word or comparable software, no more than double-spaced with margins of no more than one inch. In the final report assessment, you will support your reasons for purchasing the company by performing the financial analysis and answering the questions below. The more detail and depth that you include in your analysis presents, the better. I expect you to do a good job of explaining your position. It is expected that each group member will actively participate in the project. I will not tell you how to do the project as I want you as a group to develop your own best methods. Project Grading: Your project will be graded on completeness, correctness, creativity, and the quality of presentation. In order to ensure that all members of a group participate in the project, each member will submit a written evaluation of the other members of the group. This evaluation will factor heavily in the computation of your individual grade. I suggest exchanging phone numbers and email addresses to assist in this process. I will be available to answer questions and provide some guidance, but the goal is for you to use your talents and imagination to figure out the best methods to accomplish the objectives of this project. Your project should include, but is not limited to, the following: Review each company's statement of cash flows to answer the following. Identify the impact on operating cash flows (increase or decrease) for changes in inventory levels (increase or decrease) for both companies for each of the three most recent years. What impact would a JIT inventory system have on each companies operating income? Link the answer to your response for part 1. Would the move to a JIT system have a one-time or recurring impact on operating cash flow? Which company does a better job of generating Free Cash Flow? Why is this important? Compare these companies' income statements and answer the following. Compute the ratios of cost of goods sold to total expenses for their two most recent fiscal years. (Record answers as percents, rounded to one decimal.) Comment on the similarities or differences in the ratio results across both years between the companies. Which company has a higher ratio of costs, defined as cost of goods sold plus total operating expenses, to revenues? Use the two most recent years' income statements from Appendix A. Show your analysis. How might the use of activity-based costing help the less competitive company become more competitive? Identify and record the prior three years' sales (in dollars) for using their financial statements. Using the data in 5, predict both companies' sales activity for the next two to three years. (If possible, compare your predictions to actual sales figures for those years.) Compute profit margin for each company. Compute investment turnover for each company. Project Timeline: Groups established and project information distributed: May 18, 2020 Company picks and typed one-page summary: May 25, 2020 Final written report submitted in Canvas: June 2, 2020 Key Resources Chapter 13 of your textbook Financial Statement Analysis http://finance.yahoo.com (Links to an external site.) www.fool.com (Links to an external site.) http://www.sharebuilder.com (Links to an external site.) Group Project Evaluations Your project will be graded on completeness, correctness, creativity, and the quality of presentation in your written report. In order to ensure that all members of this group participate in this project, each member will submit a written evaluation of the other members in the group. The form is included on the last page of this project packet. This evaluation will factor heavily in the computation of your individual grade. On the evaluation form, you will give your team members one of four ratings: excellent, good, fair, or poor. If you give a rating of poor, you must provide an explanation: poor attendance at group meetings, non-completion of assignments, etc. Be objective in rating the performance of your group members. Members who actively participate in the process and make a contribution should be given a rating that reflects this. Others, who have not made the effort, should not be rewarded for their lack of effort. Working with others to accomplish a goal is part of the educational experience, particularly for business students. Interdependence allows us to recognize the value of other peoples talents and skills and how we can use them with our own to create a win-win situation. In this case, it means submitting a project which results in a positive grade. Here are some suggestions that is edited from Rachel Morks Effective Teamwork in 11 Easy Steps: Share Added Value Establish a baseline level of respect and admiration within your team. Set up meetings where the overall purpose of the team is discussed. Focus on what added value each person brings. Build Respect Each student share what he/she brings to the team. Everyone share what parts of the project appeal to their individual strengths. Discuss how the team works well together, along with what areas could use improvement. Brainstorm Ideas As A Group Make some time in your meetings for brainstorming. Allow everyone in the group to contribute ideas for streamlining efficiency, improving the workflow process, or any other area of concern that might arise. Establish A Neutral Procedure To Deal With Conflict Make sure you've established a clear, safe procedure for conflict resolution and complaints. Everyone in the group needs to know that dissatisfaction will be addressed and problems solved to the best of your teams ability. Schedule Progress Meetings Don't let too much time pass as the project progresses. Make sure you hold meetings where concerns and developments can be discussed as a group, allowing all voices to be heard. The point of these meetings should be to deal with conflict, smooth out bumps in the process, and allow team members to voice concerns.