Finance 311 Company Analysis Project (100 points). Due Tuesday, April 26.This assignment is to be done in groups. It requires you to select a firm, obtain information about it, analyze the information and communicate the results in writing.Company requirements:Select a company that is covered by Value Line Investment Survey.Select a US (not a foreign) firm. Avoid banks and insurance companies. You will have fewer problems if you choose a manufacturer or a retailer. Select a firm that pays a regular quarterly dividend. This will be shown by Value Line.Value Line Investment Survey, is available online (it requires an NAU network connection) at the Cline Library website. From the Cline website, go down to “ResearchResources” and click on “Find Articles & Research Information,” then “Finance.” Click on “Value Line Investment Survey,” then “lookup Company.” Use the PDF version.You can get all kinds of information, including recent developments, citations of articles about the firm, and often the Annual Report, on the Internet. Most publicly traded firms have a home page on the Internet, and that is a good place to start once you have identified a company that meets the requirements stated above. Use Google, or another search engine to find additional information. You can access ratios for your firm and industry averages on moneycentral by going to money.msn.com and entering the ticker symbol for your stock. Then click on “Fundamentals” and “Key Ratios.”Other useful sources of information include the Wall Street Journal, Moody’s, Standard and Poor’s. They are available in Cline Library. Your report must be typed, double-spaced. Your report must address the following points, in the order stated.I Title page. Include the name of the company, your names and the course name and number.II. Company Description. Provide a one page description of your firm. Do not simply download this from a website or plagiarize from any source. However, use the Annual Report and at least one magazine or newspaper article for this. Be objective. Do not give a detailed history of the firm; focus on things of interest to potential investors. Identify the industry or industries your firm is in. Is there anything for which the firm is particularly noted, such as technical innovation, excellent management, customer loyalty, etc.? Identify the sources of your information.III. Do a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of the firm. For each section, provide one or two paragraphs in which you identify and discuss what you consider to be the firm’s primary strength, weakness, opportunity and threat (for example, explain why it is a strength or weakness, and why it is important to the firm’s future). This requires analysis, not a laundry list. Other, less 1important strengths, weaknesses, opportunities and threats can be addressed, but you should focus on what you consider to be primary. In discussing opportunities and threats, you must address the firm’s external environment (macroeconomic and industryconditions). Identify sources (the information that follows on SWOT analysis is from www.quickmba.com).a. Strengths: A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include:- patents- strong brand names- good reputation among customers- cost advantages from proprietary know-how- exclusive access to high grade natural resources- favorable access to distribution networksb. Weaknesses: The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses:- lack of patent protection- a weak brand name- poor reputation among customers- high cost structure- lack of access to the best natural resources- lack of access to key distribution channelsIn some cases, a weakness may be the flip side of a strength. Take the case in which a firm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.c. Opportunities: The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include:- an unfulfilled customer need- arrival of new technologies- loosening of regulations- removal of international trade barriersd. Threats: Changes in the external environmental also may present threats to the firm. Some examples of such threats include:- shifts in consumer tastes away from the firm's products- emergence of substitute products- new regulations- increased trade barriersIV. Ratio Analysis. To do this, you need ratios for your firm, and industry averages for financial ratios for your firm’s industry. Industry averages can be obtained from one of the sources listed on p. 51 of your text, or via the Internet (www.money.msn.com for 2example). Identify your source(s). For your firm’s ratios, obtain them from the internet or other source (identify the source) or calculate them yourself using your firm’s financial statements. Make a table showing the ratios for your firm and the industry averages and include it in your text, not at the end. Compare your firm’s ratios to the industry averagesin a paragraph addressing each of the following: liquidity, activity, debt, and profitability (i.e. four paragraphs, not one). Required financial ratios are: current ratio, quick ratio, total asset turnover, inventory turnover, average collection period (if relevant), debt ratio (or debt-to-equity), times interest earned, gross profit margin, net profit margin, return onassets, return on equity and price/earnings ratio. Use your textbook as a reference to help interpret the ratios. (You might not be able to find industry averages for all of the ratios, however, you should try. Use more than one source if necessary. Tell me where you have looked.)V. Calculate the required rate of return using the Capital Asset Pricing Model, represented by eqn. 5.7 on p. 222 of your textbook. For the risk-free rate, use the yield on 6-month Treasury Bills, which you can find on the Internet (go to www.bloomberg.com, then “market data,” “rates and bonds”). The “market risk premium” (rM – RF) has averaged 8.4 percent historically, so