Project 1 Fin 321
For this project you will be selecting a national or international corporation of your choosing to evaluate. You will be accessing performance data via the SEC website EDGAR; here are the minimal requirements:
1. In a brief paragraph state the following: the company’s name; the ticker symbol; the firm’s major line(s) of business; and data source(s) used.
2. Using the 10-Q report create an Excel spreadsheet with one column for Sales and another for Net Income using t=40.
3. Estimate two linear trend equations [similar to Y = a + ß t], one for Sales and one for Net Income. Plot each time series data (two separate graphs): X-axis = time; Y-Axis: Sales or Net Income; show the trend line in each graph.
4. Use the respective equations to forecast Sales and Net Income for t = 41 (1st quarter of 2015). For each regression equation, provide the computer-generated statistical details (i.e., ANOVA: R2, t-Stat, SS, etc.).
5. Use each trend equation to derive the predicted values for t = 1, 2, 3, etc.; in a table compare them to the actual (raw data) numbers.
6. Estimate the relationship between Net Income and Sales by using a regression: Net Income = a + ß Sales (i.e., Y=a + ß X). Forecast Net Income for the 1st quarter of 2015 based on this equation (for X41 use the Sales “trend forecast” you previously obtained in part “4” above).
7. Summarize your results in a concluding paragraph.
Posted on: Saturday, October 3, 2015 3:20:36 PM PDT
Just wanted to clarify an issue that some of you may encounter in collecting your data. EDGAR data often includes only the first 3 quarters of a company’s fiscal year data, followed by an annual report with full fiscal year data (10-K). If you encounter this, simply use the 10-K annual statement, comparing the numbers to quarter 3 data (10-Q) and calculate quarter 4 sales and net income.
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