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Select a publically traded company. Go to the company’s Web site. Try one that you are familiar with—you shop at their store, eat at their restaurants, or wear their clothes.
On their Web site, try to find their annual financial report. Sometimes, these are found under “Investor Relations”.
If you cannot find the annual financial report on the company’s site, conduct an Internet search. One good source is Yahoo! Finance.
Required:
For the company you selected, describe your company’s operations and the market in which it operates. Search for the EVA, and free cash flow using the firm’s annual report. Define their respective meanings and how your firm is performing in these areas. Indicate the firm’s ROA and ROE and explain the difference between the two measures. You must submit documentation showing how answers were reached.
Note the following for your report:
EVA=EBIT (1-T)- (Total investors capital x after-tax cost of capital)
Free Cash Flow = EBIT(1-T) + Depreciation – (Capital Expenditures+ Increase in Net Working Capital)