research paper about Apollo Group Inc (APOL) needed some finance

Guideline for FIRE 371 Paper
(Due on Tuesday, April 9th, 2013)

You are required to write a brief financial analysis report on a publicly-traded company. Your paper
should include the following sections:

1. Introduction

• Briefly describe the reason you choose this company, the company’s history, its
operations, its products, and the characteristics of its industry, etc.

2. Follow the instructions on the document titled “Research Insight Instruction” posted on D2L under
the Module IV. Paper Assignment to retrieve the most recent five years of financial statements
(annual balance sheet/annual income statement) of a publicly traded firm, and convert the text file to an
Excel file. You must retrieve financial statements for the most recent five years (balance sheet, income
statement) from Research Insight.

3. Financial analysis
(a) Trend analysis (over the past 3 years)

(1)Use the data downloaded from Research Insight for your trend analysis.
(2) Calculate 8 financial ratios (pick one ratio from each of the five following categories:
liquidity, long-term solvency, asset management, profitability, and market value ratios, and
other three ratios in any of the above five categories) over the past 3 years in Excel.
(3) Pick one ratio from each of the above five categories (five ratios in total) to discuss in your
paper.

(b) Peer analysis (compare the firm to its industry for the most recent year)
(1) Use the industry data from www.reuters.com for your peer analysis.
(2) Compare five financial ratios of the firm (one ratio from each of the above mentioned five
categories) to those of the industry, and discuss in your paper.

4. Conclusion
• Briefly provide your opinion of the company’s prospects based on your analysis.

5. References and Appendices

(1) List the sources or references you used in your paper.
(2) The financial ratios you calculated in excel must be turned in as an appendix to the paper.

Documents needed to be submitted:

(1) Submit your paper with references and appendices in class on the due date: April 9,
2013. The cover page of your paper should include the company name, your name, the
class name, and the section number.
(2) The financial statements of your company must be turned in as an excel file. Please
name excel file the name of your company and submit it in the Dropbox on D2L by
midnight of due date: April 9, 2013. The excel file should include the financial ratios you
calculated for your company. There is a penalty for late submission and it is 5 points
deduction from total score of late paper for each calendar day late.

http://www.reuters.com/

Research Insight Instruction

To accompany the FIRE 371 Financial Ratio Analysis Project

Prepared by

Jin Yu, Ph.D.

St. Cloud State University

Updated on 8/8/2012

This document shows you how to retrieve company financial statements from Research Insight.

It appears that each user is required to set up the paths to the data sets when you use computers in CH491

and CH415. Please follow the instructions below before retrieve your data.

1. Start, Programs, Research Insight, Research Insight Database Manager
2. Click the top Properties button to define the Database Areas
3. For the North American section, paste this into the top field (Area 1):

\\stcloudstate\huskynet\RIDataSets\North America

4. Click Price History on the left and paste this into the top field (Area 1) of that page:

\\stcloudstate\huskynet\RIDataSets\Price History

5. Click Okay twice to save settings and then run the Research Insight program.
6. It is normal to get a message saying that 600-700 files are required to be copied. Click Yes and

then Copy Support Files on the bottom of the next screen. A folder called Research Insight

will be created in your X: drive when running this in the labs. This will require 70 MB of space.

Initial quotas for SCSU File Space are 500 MB for students. You can request more space through

a link on http://huskynet.stcloudstate.edu/myHuskyNet/filewebspace.

The computers in other labs on campus may have been pointed to the old paths, so please follow above

steps from 1 to 4 to set up the new paths. Otherwise, you will not be able to download firms’ most recent

financial statements. This could cost you points on the paper.

file://stcloudstate/huskynet/RIDataSets

http://huskynet.stcloudstate.edu/myHuskyNet/filewebspace

After the paths to the data sets have been set up, you can follow the instructions below to retrieve and

save the financial statements of your choice for financial ratio analysis purposes.

1. Click on Start, then All programs

2. Click on Research Insight

3. Wait for a few seconds, you will see the following window,

then click on Open Report.

4. You will see the following window:

5. Click on Annual Balance Sheet – 5 years, then Finish tab, the following window will show up.

6. Type in ticker symbol of the company of your choice in the blank box area under Companies.

Let’s use Apple Inc. as an example. Apple’s ticker symbol is AAPL. Type in AAPL, then click

on OK tab.

7. Wait for a few seconds, the following window will appear. It shows the past five-year annual

balance sheet information of Apple.

8. Click on File tab on the upper left-hand side of the previous window, then Save As. You should

be able to save the balance sheets information to your X: drive as a txt file. So far, we get Apple’s

balance sheets information. Next, we will try to get the income statements of Apple Inc. Click

on Open Report ( ) tab at the left hand side of the window in #7, you will see the following

window again.

9. Scroll down the screen, you will see a folder called “Income Statement”.

10. Double click on the “income Statements” folder, you will see the following:

11. Click on “Annual Income Statement – 5 years”, then Finish tab.

12. When you see the following screen, type in the ticker symbol of the company you choose. Again,

take Apple Inc. as an example. Type in “AAPL” in the blank box under Companies, then click

on OK tab.

13. Wait for a few seconds, you will see the following screen:

14. Click on File tab on the upper left-hand side, then Save As. You should be able to save the

income statements to your X: drive as a txt file.

15. Now, you need to covert the text files of your financial statements to Excel files since it’s much

easier to compute financial ratios in an Excel file rather than a text file. Open Excel and click on

the Office Button.

16. Choose Open, and open the balance sheet text file you downloaded and saved. The following

window will show up in Excel.

17. Click on Next tab, you will see the following.

18. Click on Next tab, the following window will show up:

19. Then click on Finish tab. Now, you have converted the text file balance sheet to

an Excel file.

Following the same instructions from #15, and convert the text file of your income statement to

an Excel file.

b1

GROUP INC -CL A

APOL

0 0 0 0 0

@CF

1.00 1.00

—————— —————— —————— ——————

—————— —————— —————— —————— ——————

0 0 0 0 0

5.946

0 0 0 @CF 0

—————— —————— —————— —————— ——————

Due In One Year

0 0 0 @CF 0

0 0 0 0

—————— —————— —————— —————— ——————

Long Term Debt

0 0 0 0 0

—————— —————— —————— —————— ——————

0 0 0

12-Aug 11-Aug 10-Aug 9-Aug 8-Aug

0 0 0 0 0

—————— —————— —————— —————— ——————

0 0 0 0 0

0.104 0.104 0.104 0.104

—————— —————— —————— —————— ——————

928.378 1,240.36 1,356.05 1,157.61 834.209

—————— —————— —————— —————— ——————

1,157.61 @NA

—————— —————— —————— —————— ——————

2,868.32 3,269.71 3,601.45 3,263.38 1,860.41

APOLLO GROUP INC -CL A

TICKER: APOL

SIC:

GICS: 25302010
12-Aug 11-Aug 10-Aug 9-Aug 8-Aug

—————— —————— —————— ——————

——————- —————— —————— —————— ——————

3.5

9.5

——————- —————— —————— —————— ——————

Items

@NA

——————- —————— —————— —————— ——————

Income Before Extraordinary

0 0 0 0 0

——————- —————— —————— —————— ——————

569.94 568.426 598.319 476.525

0 0 0 0 0

——————- —————— —————— —————— ——————

393.726 569.94 568.426 598.319 476.525

0 0 0 0 0

0 0

——————- —————— —————— —————— ——————

422.678 572.427 553.002 598.319 476.525

595.23 @NA

2.9

Earnings Per Share Basic –

4.05

3.79 2.9

Excluding Extra Items & Disc Op

3.72

Including Extra Items & Disc Op

3.62 3.75 2.87

2.87

2.84

0 0 0 0 0

APOLLO GROUP INC -CL A ANNUAL INCOME STATEMENT
TICKER: APOL ($ MILLIONS, EXCEPT PER SHARE)
SIC: 8200
GICS: 25302010
12-Aug 11-Aug 10-Aug 9-Aug 8-Aug
Sales 4,253.34 4,733.02 4,925.82 3,974.20 3,140.93
Cost of Goods Sold 1,800.17 1,774.09 1,978.05 1,503.83 1,292.48
——————- —————— —————— —————— ——————
Gross Profit 2,453.16 2,958.94 2,947.77 2,470.37 1,848.45
Selling, General, &
Administrative Expense 1,538.42 1,606.10 1,427.46 1,241.13 1,020.59
——————- —————— —————— —————— ——————
Operating Income Before Deprec. 914.745

1,520.31 1,229.25 827.866
Depreciation, Depletion, &
Amortization 178.2 159.006 147.035 99.872 78.4
——————- —————— —————— —————— ——————
Operating Profit 736.545 1,193.83 1,373.28 1,129.38 749.466
Interest Expense 11.745 8.931 11.891 4.46 3.5
Non-Operating Income/Expense 1.663 1.634 2.235 11.715 27.388
Special Items -60.208 -232.589 -362.552 -95.416 9.5
——————- —————— —————— —————— ——————
Pretax Income 666.255 953.947 1,001.07 1,041.22 782.854
Total Income Taxes 283.072 420.638 464.063 445.985 306.927
——————- —————— —————— —————— ——————

& Noncontrolling Interests 383.183 533.309 537.005 595.23 @NA
Noncontrolling Interest – Inc Acc -10.543 -36.631 -31.421 -3.089 -0.598
——————- —————— —————— —————— ——————
Income Before Extraordinary
Items & Discontinued Operations 393.726 569.94 568.426 598.319 476.525
Preferred Dividends 0 0 0 0 0
——————- —————— —————— —————— ——————
Available for Common 393.726 569.94 568.426 598.319 476.525
Savings Due to Common
Stock Equivalents 0 0 0 0 0
——————- —————— —————— —————— ——————
Adjusted Available for Common 393.726 569.94 568.426 598.319 476.525
Extraordinary Items 0 0 0 0 0
Discontinued Operations 28.952 2.487 -15.424 0 0
——————- —————— —————— —————— ——————
Adjusted Net Income 422.678 572.427 553.002 598.319 476.525
Income to Company Incl Extrordinary
Items & Disc Ops 412.135 535.796 521.581 595.23 @NA
Earnings Per Share Basic –
Excluding Extra Items & Disc Op 3.24 4.03 3.74 3.79 2.9
Earnings Per Share Basic –
Including Extra Items & Disc Op 3.48 4.05 3.64 3.79 2.9
Earnings Per Share Diluted-
Excluding Extra Items & Disc Op 3.22 4.02 3.72 3.75 2.87
Earnings Per Share Diluted –
Including Extra Items & Disc Op 3.45 4.04 3.62 3.75 2.87
EPS Basic from Operations 3.58 4.96 5.38 4.26 2.87
EPS Diluted from Ops 3.56 4.95 5.35 4.22 2.84
Dividends Per Share 0 0 0 0 0
Com Shares for Basic EPS 121.607 141.269 151.955 157.76 164.109
Com Shares for Diluted EPS 122.357 141.75 152.906 159.514 165.87

																							APOL	ANNUAL BALANCE SHEET
		TICKER:	($ MILLIONS)
		SIC:	82																						0
		GICS:			25302010	FINANCIAL RATIOS
			12-Aug				11-Aug				10-Aug			9-Aug			8-Aug	12-Dec	11-Dec	10-Dec
ASSETS	Liquidity Ratio:
Cash & Equivalents	1,594.71	1,951.07	1,728.90	1,400.55	870.41	Quick ratio	1.17	1.43	1.26
Net Receivables	198.279	215.567	264.377	298.27	221.919	Cash ratio=	0.9635476868	1.1786904627	0.9639756879
Inventories	Leverage ratio:
Prepaid Expenses	26.341	35.629	39.409				@CF	Total debt ratio			1.00
Other Current Assets	118.661	168.519	220.525	181.197	77.214	Asset Management:
																										——————	Total Asset turnover	2.194715659	1.9963936011	2.1861320639
Total Current Assets	1,937.99	2,370.79	2,253.21	1,880.02	1,16		9.5	Receivable turnover	21.4512732059	21.9561528434	18.6317985301
Gross Plant, Property & Equipment	1,221.28	1,104.84	1,094.32	965.31	873.94	Profitability Measures:
Accumulated Depreciation	649.648	551.813	474.78	407.803	434.805	Return on Equity			422.678			572.427		553.002
Profit Margin	0.0993756197	0.1209432367	0.1122660008
Net Plant, Property & Equipment	571.629	553.027	619.537	557.507	439.135	Market Value Measure:
Investments at Equity	Price-Earnings per ratio	5.7959770115	0.1212098765	10.4532967033
Other Investments		5.946	15.174	19.579	4				2.9
Intangibles	252.379	254.414	472.752	726.029	109.064
Deferred Charges
Other Assets	100.378	85.533	240.776	80.245	99.704
TOTAL ASSETS		2,868.32		3,269.71		3,601.45		3,263.38		1,860.41
LIABILITIES
	Long Term Debt	638.588	419.318	416.361	461.365	15.4
Notes Payable
Accounts Payable	74.872	69.551	90.83	66.928	46.589
Taxes Payable	6.111
Accrued Expenses	264.698	398.806	375.461	268.418	121.2
Other Current Liabilities	676.881	767.612	910.859	958.567	676.309
Total Current Liabilities	1,655.04	1,655.29	1,79		3.5	1,755.28	865.609
81.323	179.691	168.039	127.701	15.516
Deferred Taxes	15.881	26.4	38.875	55.636	2.743
Investment Tax Credit
Other Liabilities	191.756	164.339	212.286	100.149	130.379
Liabilities – Total	1,944.00	2,025.72	2,212.71	2,038.76	1,014.25
Redeemable Noncontrolling Int.	67.003	11.956
		APOLLO GROUP INC -CL A
EQUITY
Preferred Stock – Redeemable
Preferred Stock – Nonredeemable
Total Preferred Stock
Common Stock					0.104
Capital Surplus	93.77	68.724	46.865	1.139
Retained Earnings	4,713.12	4,296.71	3,716.87	3,178.99	2,591.38
Less: Treasury Stock	3,878.61	3,125.18	2,407.79	2,022.62	1,757.28
Common Equity		928.378		1,240.36		1,356.05			1,157.61		834.209
Stockholder’s Equity – Parent
Nonredeemable Noncontrolling Int.	–		4.05			3.62	32.69						@NA
Stockholder’s Equity – Total	924.323	1,243.99	1,388.74
TOTAL LIABILITIES & EQUITY
COMMON SHARES OUTSTANDING	112.243	130.479	147.768	154.736	158.946
	ANNUAL INCOME STATEMENT
	($ MILLIONS, EXCEPT PER SHARE)
	8200
	Sales		4,253.34		4,733.02		4,925.82		3,974.20		3,140.93
	Cost of Goods Sold		1,800.17		1,774.09		1,978.05		1,503.83		1,292.48
															——————-
	Gross Profit		2,453.16		2,958.94		2,947.77		2,470.37		1,848.45
	Selling, General, &
	Administrative Expense		1,538.42		1,606.10		1,427.46		1,241.13		1,020.59
	Operating Income Before Deprec.		914.745	1,35		2.84		1,520.31		1,229.25		827.866
	Depreciation, Depletion, &
	Amortization		178.2		159.006		147.035		99.872		78.4
	Operating Profit		736.545		1,193.83		1,373.28		1,129.38		749.466
	Interest Expense		11.745		8.931		11.891		4.46
	Non-Operating Income/Expense		1.663		1.634		2.235		11.715		27.388
	Special Items		-60.208		-232.589		-362.552		-95.416
	Pretax Income		666.255		953.947		1,001.07		1,041.22		782.854
	Total Income Taxes		283.072		420.638		464.063		445.985		306.927
		Income Before Extraordinary
	& Noncontrolling Interests		383.183		533.309		537.005				595.23
	Noncontrolling Interest – Inc Acc		-10.543		-36.631		-31.421		-3.089		-0.598
	Items & Discontinued Operations			39		3.72						569.94				568.426					598.319	476.525
	Preferred Dividends
	Available for Common			393.726
	Savings Due to Common
	Stock Equivalents
	Adjusted Available for Common
	Extraordinary Items
	Discontinued Operations		28.952		2.487		-15.424
	Adjusted Net Income
	Income to Company Incl Extrordinary
	Items & Disc Ops		412.135		535.796		521.581
			Earnings Per Share Basic –
			Excluding Extra Items & Disc Op		3.24		4.03		3.74				3.79
			Including Extra Items & Disc Op		3.48		3.64
	Earnings Per Share Diluted-
	3.22		4.02				3.75						2.87
	Earnings Per Share Diluted –
	3.45		4.04
	EPS Basic from Operations		3.58		4.96		5.38		4.26
	EPS Diluted from Ops		3.56		4.95		5.35		4.22
	Dividends Per Share
	Com Shares for Basic EPS		121.607		141.269		151.955		157.76		164.109
	Com Shares for Diluted EPS		122.357		141.75		152.906		159.514		165.87
1,352.84	Income Before Extraordinary Items

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