Target investment anlysis

1.Identify economic characteristics and competitive dynamics of your Target industry- In particular, where the company stands relative to the industry with respect to size (assets/sales), number of employees, market share, products, global reach, etc. Use your company's website, 10-k 2020, MD&A, and various financial websites (e.g., Yahoo, Bloomberg). Is this a growth or mature industry, commodity, or intellectual property intensive industry?Identify at least 2 industry competitors. Use graphs or charts where appropriate.

2. Identify company strategies- What is the value proposition for your company's shareholders, e.g., product diversification, expansion (organic or through acquisition), high customer satisfaction, etc. Present how your company has done over the last 2 years with respect to these success factors (i.e., number of new stores opened). Include a slide on the Porter's Five Forces.

3.Assess the quality of the financial statements- Review the latest financial statements for any accounting quality issues (i.e., discontinued operations, unusual items, peripheral gains/losses, impairments, restructuring charges). Focus on sustainable income. Review the Notes section of the financial statements for litigation, subsequent events, or other issues that might affect the future performance of your company. Use this information to adjust your financial statements for future forecasting.

4. Analyze profitability and risk using financial statement information - Include a chart that compares for 2 years significant financial ratios, including time-series and percent change analysis.Display 10 ratios covered during the semester, including ROA, ROCE, both disaggregated, and z-score.Comment on any significant changes.Ratios should be supported by detailed calculations on a separate excel worksheet.Include similar ratios for one key competitor for the latest fiscal year,

5. use forecasted financial statements - make a comprehensive income statement for the next two fiscal years (2021 and 2022). Reference line items (i.e., Revenue) to a detailed back-up slide that shows assumptions used and calculations.You need to use the material provided in steps 1-4 to make a proper forecast using the 7 - step process covered in Chapter 10.Do not just increase line items by a growth percentage.Use the bottoms approach or store square footage methods covered in class.

6. Value the Company - Using two of the three models studied to value a company (earnings, free cash flow, or dividends model) derive a valuation for your company using your forecasted financial statements. Document your findings on a back-up slide detailing your assumptions and calculations.Compare your valuation with the current reported "market cap" of your company to determine if it is properly, over or under valued.

Final slide(s):

Recommendations to company management - Please provide at least two well thought out recommendations that the company can implement to improve either operational or financial performance.Recommendations can include acquisitions, divestitures, new markets, and financial re-engineering (e.g., stock repurchases, debt restructuring, increasing dividends).