After performing an economic review, the analyst must become familiar with the industry to which he/she is assigned. The way to obtain this knowledge is by performing a complete industry analysis.
Our focus will be on the foodindustry. For purposes of this class, we will define the industry based on five companies:
· Kellogg (K)
· General Mills (GIS)
· Mondelez (MDLZ)
· JM Smucker (SJM)
· Campbell Soup (CPB)
Use complete sentences and paragraphs. Please endnote any source you use to justify your answers (including the textbook). Feel free to bring in other sources to support your answers (just be sure to endnote those sources).
Use ARIAL type font, 12 point, double-spaced. 6 pages. Please use the data in the excel I have attached.
This project is worth 100 points. Again, be thorough with your answers.
Using the material from class as your guideline, put together a report on this industry.
Data and charts are in addition to and should not be considered part of the 6 page requirement.
As part of the assignment, you need to use Telemet to perform a comparative (industry) ratio analysis. You should select important ratios like DuPont, leverage ratios, profitability ratios, growth ratios (e.g. revenue growth), and other balance sheet and income statement ratios. Select the 10 ratios that you believe best describe the industry.
If Telemet has already computed ratios, you do not need to compute them yourself. Just cite that’s where the ratios came from. You should build your own tables, however, and have at least 5 years of data.
Note: Compute your own industry/peer averages or medians for each ratio using the five companies mentioned above as the total industry.
Summary of Instructions:
When writing your paper on the industry, you can use the following as a guide. This is a simple list, and not all-inclusive – your analysis should go beyond what’s written below. Feel free to consider and discuss other factors you believe to be important.
1. Start off with a description of the industry.
2. Find or calculate comparative industry ratios.
3. Determine what factors most affect the industry.
4. Understand the competitive level of the industry, barriers to entry, etc.
5. What are the major challenges and opportunities?
6. How does changing technology impact this industry?
7. How do you think this industry will fare going forward?
This project should give you a healthy understanding of the assigned industry.
Sources of Information:
Some sources were listed in the PowerPoint presentation. You can use any source you can find to bolster your knowledge of the industry. Be sure to endnote your sources! Also, check out each company’s websites and MD&A sections of their annual report or quarterly reports.