You will have to determine which items are more

You will have to determine which items are more material to the understanding of the overall financial situation of the company and you should focus your efforts there.

Part of the project will be delivered individually through our homework assignments and part will be delivered as your final group project.

You will deliver a model with your analysis including:

• Link to historical data of Income Statement, Balance Sheet and Cash Flow Statement.
• Quality of Earnings analysis adjusting non-core items from the Income Statement
• Income Statement, Balance Sheet and Cash Flow Projections for 2022-2025 under the following premises:
  • You will follow company guidance, UNLESS you have a specific reason not to. If so, the rationale for deviating from company guidance MUST be explicitly detailed in your report.
  • 2022 is assumed to continue in line with current/expected economic conditions (and company guidance)
  • 2023 is a return to pre-COVID normal economic conditions.
  • 2024-2025 normalize any unusual short-term trends to historical average, unless you believe there is a permanent shift.
• Valuation including DDM, FCF, Residual Income and Comparable Multiple Analysis

In addition to the fully completed model with your analysis, you will deliver a report explaining such analysis including but not limited to:

• Company and Industry Analysis
• Earnings quality summary and other accounting considerations. Include a SUMMARY of general quality of earnings adjustments (I already see your specific adjustments in the model) explaining our process and the type of items we adjust for.  If there are any items where we could have chosen to exclude or include, explain our choice and our rationale for doing so.  Explain any interesting/important accounting issues with the financial statements, choices we have made, or any deviations we make from Verizon’s presentation
• Historical Income Statement Analysis Including but not limited to Historical Sales and Earnings Growth, Profitability and Margin Analysis, and ROE/ROA and Profitability Ratio Analysis should be included here
• Balance Sheet Analysis (AS NEEDED) of Receivables, Inventory, PP&E, Intangible Assets, Leases, Other Assets, Accounts payable, Notes Payable, Pension, Taxes, Financial Assets and Liabilities, Derivatives, Shareholder’s Equity, etc. (With the exception of profitability, most ratio analysis should be included in this section)
• Cash Flow Analysis including Cash Flow from Operations and Free Cash Flow Analysis
• Qualitative and quantitative explanation of Forecasting assumptions.
• Final Valuation analysis and explanation of choices made, and final investment recommendation (Buy / Sell / Do nothing).
• Appendixes as requested
• You can add any other sections you feel necessary. Please keep the same format as the rest of the project

Note:  Any and all analysis should be done individually, and in comparison with AT&T AS NEEDED (we will use AT&T as a proxy for the industry).  I will provide AT&T data for comparison purposes.