Research Assignments

The objective of the research assignments is to ensure that students can conduct simple business research, interpret raw data, and use fundamental business tools. Each student is required to demonstrate these skills through 3 assignments. The submitted work will normally be less than a page in length and should report only the information required. Narratives are limited, if required, unless you feel that it is essential to clarify what you have reported. Assignments are due as scheduled by the syllabus. They ought take longer than an hour to complete. The 3 assignments are 15% of the course grade, each is 5% of the course grade. 

This page gives the assignments and provide links to assist with the assignments.

Assignment 1: Comparative Financial Ratios

The objective of this assignment is that you demonstrate an ability to interpret financial data. Select 3 firms in an industry - you may use any industry in which you have an interest. Report and interpret 3 financial ratios for 3 years for each of the three firms. Your interpretation should be brief - 1 or 2 sentences - for each ratio. Try not to restate the definition of the ratio, but interpret what the three-year comparative data report as organizational strengths or weaknesses of the firms. For data source, see S&P Industry Analysis in the library or ManagementGuru. To do this assignment On-line go to Hoovers On-Line and identify a firm of interest, Hoovers' will tell you who are the firm's competitors. Link to each firm at this site to report and compare financial ratios.

An Example from Teaching Note #4:

One ratio is the Market-Book value, using 3 years of data for 3 firms: 

Interpretation: While the M/B for the group is greater than 1, indicating a strong performance. Smith-Kline is in free-fall suggesting troubled performance and a possible "take-over".

Assignment 2: The Business Environment

The objective of this assignment is that you demonstrate an ability to use a simple statistical technique and interpret the results.  You are to use a simple forecasting technique and demonstrate an understanding of time series analysis. You will be assigned an environmental measure. You are to collect 7 data points, using 6 data points forecast the next interval of datum, and compare your forecast with the actual datum. For example, if your measure were GNP using annualized data, you would collect GNP data for 1989, 1990, 1991, 1992, 1993, and 1994. Using linear regression you would forecast GNP for 1995, then compare your forecast with the 1995 actual GNP.  Do not be concerned if your forecast is not correct. The drill is the collection of data, the use of linear regression, and the problems with linear estimation techniques. Your typed written submission will be brief: simply cite the data collected and the source; show your forecasting; and, show the difference between the actual and forecast data. Use linear regression - you may calculate the intercept and slope coefficients manually or use computer software, such as Lotus 1-2-3. The time interval is not especially important, but it must be uniform. You may use annualized data, monthly, or quarterly data that is historical or current. (Check ManagementGuru or library for data sources.)

If you need help with the statistics, check out the tutorial hyperlink on the syllabus at ManagementGuru. Be prepared to discuss your findings in class.

Environmental Measures [athe measure assigned to you]:

Help with this Assignment:

1. The above data is available from several sources on the Internet, you may use a search engine such as metacrawler or go to my page on Economics for sources. Get your data first.

2. The data: You need 7 data points. This means that if your data is in years, you need 7 years; if your data is reported monthly, you need 7 months. The time interval needs to be continuous, so you cannot use 1940, 1941, 1956, etc. or use Jan, Feb, Aug. etc.

3. You are going to use 6 time periods of data to predict the 7thn period. You already have the real 7th period and will use this to compare the real datum with what you predict. 

4. I recommend that you learn to use simple spreadsheets for this exercise - we forget formulas, but usually always have access to Excel. For help on forecasting using regression with Excel CLICK HERE and follow instructions. 

5. When you have predicted the 7th period, compare this number with what the real 7th period was. Is the forecast close? Why or why not?

Assignment 3: Mergers and Acquisitions

The objective of this assignment is that you demonstrate an ability to interpret stock price and conduct basic business research. You are to select a merger/acquisition that is currently in the press or investigate an historical case. Recent mergers are easier, because the stock data that will be needed can be difficult to find in our library for M&A more than a few years old. A list of M&A’s is available to assist you at MergerStat (opening page will list recent M&A and the Free Reports page lists historical M&A). A list of major M&A's for 2000 is provided in my Teaching Note. (Rumors about M&A are posted at sites like CNBC's Message Board.) Your assignment is to:

1.        Report the names of the firms involved. (I would avoid foreign firms, because unless you know how to look up foreign stock exchanges and convert currencies - although these are available, if you look - you will have trouble. I would also avoid older M&A, because you can have trouble finding historical stock movement- although it is available)

2.        Provide a one or two paragraph summary of each firm’s history, including its products or services and current CEO. Assistance for this is available at ManagementGuru (I like to use Hoover's On-Line for this. .

3.       Report the general terms of the merger/acquisition agreement - for example, offered price and proposed financing. You may have to do some online research to find out about this. (Use a search engine to find the company or go to Hoover's Online for help.)

4.        Track and report the stock price of each firm for six moths prior to the announcement of a merger/acquisition. If consummated, report the stock price of the consolidated firm for three months post merger/acquisition. If not consummated, report the stock prices for the two firms after the public announcement if stocks are traded. Assistance for this is available at ManagementGuru through Hoover's On-Line.

5.        Interpret the stock price movements you find. (Look at the stock trends and tell me what you see.)