Prepare a Project Proposal that includes the nature of the project, the sources of information you plan to use, and the most important concepts and techniques to be applied.

The outline topics should include the following:

A brief summary of the company you have chosen, such as business lines, and its industry;
Information sources (e.g. industry studies, market share reports, financial statements, etc.);

The analyses you will include in your study. This will likely require a summary review of the material in later sections of the course, such as competitor analysis;

If you have access to, and permission to use, internal company documents, please discuss so in the outline.

You are required to complete a course project that reveals mastery in application of the strategic managerial accounting and performance management concepts emphasised in the course. This involves reporting on a specific organisation within an industry, analysing the firmâs competitive position (e.g., market position, cost competitiveness, market power, innovation, SWOT, etc.), its managerial accounting approach, and the non-financial performance metrics should be used in monitoring firm performance, all aligned with value creation for the chosen firm.

This project should be a formal business report that covers all elements of the strategic management process: mission statement, strategic goals, strategic objectives, actionable plans (if available, analyse the specific budget planning process used by the Firm; if not, search for relevant articles for the subject company and recommend a process that you believe is appropriate for the company), and performance monitoring processes employed by the Firm, including its board of directors. These processes and strategies are to be supported with managerial accounting and performance management concepts.

In selecting a company to analyze, first focus on information availability. If you work for the company, ensure that you can obtain the information required to do a proper job on this assignment. If you choose a company you do not work for, begin your search among larger public companies with ample information available. Company websites are often the best place to begin, in particular the investor relations site. Look for annual reports, quarterly reports, press releases, white papers, and other sources of information (e.g., public filings, such as for the U.S. Securities & Exchange Commission at http://www.sec.gov./

Your tasks are to:

Â· Briefly describe the business of the Firm (i.e. industry segments, geographic service area, market position, and size as measured by revenues, employees, and market capitalisation). Describe the mission statement and strategic objectives of the Firm.
Â· Analyse the behaviour of expenses of the business, distinguishing between variable costs and fixed costs (or estimates thereof), describe the relationships between sales volume, costs, and profit. Estimate a break-even point for the Firm and support with relevant calculations and discussion.

Â· Discuss the level of the Firmâs operating leverage.

Â· Assess the budgeting process and procedures for the Firm, bearing in mind the context of the business and its characteristics. Identify methods employed for budgeting, managerial reporting, and control, and make recommendations for improvement. Justify your recommendations.

Â· Summarise the Firmâs performance over the past five years in terms of sales and earnings growth, return on equity, return for shareholders, and non-financial performance measures (e.g. market share, recognition, customer satisfaction).

Â· Analyse the fixed capital needs (i.e. capital expenditures) of the company, and discuss significant capital projects, how they fit with the strategic goals of the Firm. Evaluate risks associated with major capital projects and suggest risk mitigation strategies. Justify your suggestions.

Â· Briefly profile two or three key competitors and analyse the basis for competition (e.g., is it cost? Innovation? Capital intensity? Branding?). Compare the Firm with these key competitors on key performance metrics (e.g., revenue growth, profit margins, return on equity, financial leverage, receivables turnover, payables turnover, asset turnover, operating costs, market share, market share growth, etc.). Identify areas where the Firm may outperform or underperform the peer group, and suggest improvements for weaknesses.

Â· Design a Balanced Scorecard for the Firm.

This project should follow a structured approach and should be prepared and presented as a professional business report.

lilacmanatee501

J.P. Morgan Tells Analysts To Warn of a Downgrade By Wade Lambert and Jathon Sapsford Staff Reporters of The Wall Street Journal March 22, 2001

J.P. Morgan Chase & Co.'s head of European research told his team of analysts they must run all changes in European stock recommendations past both the company in question and J.P. Morgan's investment-banking department. "Both the company and the client banker need to be notified, in advance, of the recommendation change that we plan to make," said the memo, written by Peter Houghton, head of equity research in Europe. "If the company requests changes to the research note, the analyst has a responsibility to either incorporate the changes requested or communicate clearly why the changes cannot be made." The memo, which a company spokesman described as a global policy for the bank and which was previously reported by the Times of London, represents a rare written edict on a practice that raises questions about analysts' independence. Wall Street analysts long have been pressured by corporate clients and their own bankers to shun negative research. Some companies penalize analysts or their firms for "sell" recommendations. Investment bankers pressure analysts because they fear any negative research will hamper their chances of winning lucrative underwriting or advisory business from the same corporate client. Thus, many savvy investors ignore much of the research that comes from securities firms. "It defeats the purpose of research," says Frank Barkocy, director of research at hedge fund Keefe Managers. Mr. Barkocy represents the "buy side," or those who are potential customers for the research of analysts at Wall Street securities firms who are known as the "sell side." By showing the report first to the company in question, "the way an analyst uses some words might very well be minimized," Mr. Barkocy says. "It's a disservice to the analyst and a disservice to the buy side." J.P. Morgan Chase maintains the memo merely reiterates a policy it has long followed, and that it reflects practices that are common in the industry. The company says it sent the memo to ensure that several new analysts who came from other firms know the policy. The company maintains that analysts aren't under pressure to change recommendations, but only to make factual changes. "The point of the memo was to ensure that there's clear communication between analysts and bankers and companies," says Nick O'Donohoe, head of European equities at J.P. Morgan. It is "a normal, common courtesy" to warn a company that an analyst was about to downgrade its stock. Nothing in the memo "compromises the honesty or objectivity or independence of our analysts," he says. Analysts' practices are coming under increased scrutiny after the Securities and Exchange Commission last October began enforcing Regulation FD, for fair disclosure, a rule that seeks to rein in the flow of privileged information between corporations and the Wall Street analysts who cover them. Wall Street analysts also have been criticized for maintaining "buy" recommendations on once-highflying tech stocks, despite their lack of profits, and long after their stocks had fallen. The issue came to a head for many European investors in December over the initial public offering for France Telecom's Orange PLC unit. Analysts were barred from a briefing by Orange officials unless they agreed to let the lead banks "fact-check" their reports on the share offering. Some question whether research can ever be considered objective if the other arm of the firm publishing it is advising the same company on a merger or selling shares. Sebastian Virchow, a fund manager at Deutsche Bank AG's asset-management unit DWS Group in Frankfurt, says his team confirms the earnings and scientific developments of the companies it invests in, rather than taking analysts' reports at face value. "We read the analyst reports and gather information, but we do our own due diligence and would never just use the reports on their own," he says. "We talk to the companies ourselves and make our own earnings estimates."

Why might "sell side" companies extend the "normal, common courtesy" of warning firms before they downgrade their stocks? Would you consider this good business practice? What is Mr. Barkocy's "buy side" criticism of such practices? Why might the "sell side" ignore such criticism?

turquoisehorse344

J.P. Morgan Tells Analysts To Warn of a Downgrade By Wade Lambert and Jathon Sapsford Staff Reporters of The Wall Street Journal March 22, 2001

J.P. Morgan Chase & Co.'s head of European research told his team of analysts they must run all changes in European stock recommendations past both the company in question and J.P. Morgan's investment-banking department. "Both the company and the client banker need to be notified, in advance, of the recommendation change that we plan to make," said the memo, written by Peter Houghton, head of equity research in Europe. "If the company requests changes to the research note, the analyst has a responsibility to either incorporate the changes requested or communicate clearly why the changes cannot be made." The memo, which a company spokesman described as a global policy for the bank and which was previously reported by the Times of London, represents a rare written edict on a practice that raises questions about analysts' independence. Wall Street analysts long have been pressured by corporate clients and their own bankers to shun negative research. Some companies penalize analysts or their firms for "sell" recommendations. Investment bankers pressure analysts because they fear any negative research will hamper their chances of winning lucrative underwriting or advisory business from the same corporate client. Thus, many savvy investors ignore much of the research that comes from securities firms. "It defeats the purpose of research," says Frank Barkocy, director of research at hedge fund Keefe Managers. Mr. Barkocy represents the "buy side," or those who are potential customers for the research of analysts at Wall Street securities firms who are known as the "sell side." By showing the report first to the company in question, "the way an analyst uses some words might very well be minimized," Mr. Barkocy says. "It's a disservice to the analyst and a disservice to the buy side." J.P. Morgan Chase maintains the memo merely reiterates a policy it has long followed, and that it reflects practices that are common in the industry. The company says it sent the memo to ensure that several new analysts who came from other firms know the policy. The company maintains that analysts aren't under pressure to change recommendations, but only to make factual changes. "The point of the memo was to ensure that there's clear communication between analysts and bankers and companies," says Nick O'Donohoe, head of European equities at J.P. Morgan. It is "a normal, common courtesy" to warn a company that an analyst was about to downgrade its stock. Nothing in the memo "compromises the honesty or objectivity or independence of our analysts," he says. Analysts' practices are coming under increased scrutiny after the Securities and Exchange Commission last October began enforcing Regulation FD, for fair disclosure, a rule that seeks to rein in the flow of privileged information between corporations and the Wall Street analysts who cover them. Wall Street analysts also have been criticized for maintaining "buy" recommendations on once-highflying tech stocks, despite their lack of profits, and long after their stocks had fallen. The issue came to a head for many European investors in December over the initial public offering for France Telecom's Orange PLC unit. Analysts were barred from a briefing by Orange officials unless they agreed to let the lead banks "fact-check" their reports on the share offering. Some question whether research can ever be considered objective if the other arm of the firm publishing it is advising the same company on a merger or selling shares. Sebastian Virchow, a fund manager at Deutsche Bank AG's asset-management unit DWS Group in Frankfurt, says his team confirms the earnings and scientific developments of the companies it invests in, rather than taking analysts' reports at face value. "We read the analyst reports and gather information, but we do our own due diligence and would never just use the reports on their own," he says. "We talk to the companies ourselves and make our own earnings estimates."

What are the "buy side" and "sell side"? Why might the "sell side" be unwilling to make "sell" recommendations on stocks? If the "buy side" has its own analysts, would the "buy side" ever look at "sell side" analysts' reports?

taupewildebeest51

SMG FE 101 Chapter Notes - Chapter 2: Standard Accounting Practice, Financial Statement, Current Liability

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