RSM333 | REPORT REQUIREMENTS

Create a written report examining your company according to the guidelines below. Use this as a
general guide as to the proportion of your report to allocate to each topic. The length of the report
should be 6 to 8 pages (i.e., 1,500 – 2,000 words with double spacing). (Note: There will be mark
reductions if the main body of the report exceeds 8 pages).

REPORT GUIDELINES

Part 1. Company Overview (15 marks) (1 page)

Overview (15 marks): Comment briefly on the company’s industry, product(s), competitors, and
customers. Comment on relevant industry trends that impact the company.

Part 2. Financial Analysis (30 marks) (3 to 5 pages)

Debt Structure (10 marks): Review the firm’s debt obligations maturing each year between now and
December 31, 2029. Is there any year where a large sum is coming due, that could be problematic,
given rising interest rates? Also comment on the capital structure.

Dividend Policy (Distributions to Shareholders) (5 marks): Review the company’s dividend

payments and share repurchase(s) for the past 5 years and comment on the payout ratios. What can
you assess about the company based on its dividend policy? Is it a mature firm or is it focused on
reinvesting for growth?

WACC (10 marks): Calculate your company’s WACC. Review Chapter 13.5, “Estimating the Cost of
Capital for Suncor Energy” for guidance. Obtain competitors’ WACC from Capital IQ or other data
sources. How does your calculation compare to the WACC of competitors? Does this put your firm
at a competitive advantage or disadvantage? Submit an Excel spreadsheet with your calculations. In
a separate tab in your spreadsheet, provide an explanation in words for the calculations used to
derive WACC. Note: Estimates for the market risk premium can be found on Professor Aswath
Damodaran’s website.

ESG (Environmental, Social and Governance) (5 marks): How does your company manage
relationships related to ESG? Examples in each category include (note: this is not an exhaustive list):

1. Environmental: climate change, pollution, and energy efficiency.

2. Social: people and relationships with the community.
3. Governance: standards for running the company.
Part 3. Valuation and Future Direction (35 marks) (Maximum 2 pages)

Valuation (20 marks)

You will provide a valuation of your company as a stand-alone entity using a simple DCF model and
market comparables, making necessary assumptions to obtain an implied price per share. Clearly
state your assumptions and data sources. Explain and justify your assumptions. Do you believe that
the DCF model is an appropriate framework to analyze your company and other firms in the same
industry? Why or why not?

Comment on whether you believe your company is over, under, or fairly valued as of August 30, 2024.
Conduct a sensitivity analysis for three to five parameters of the DCF model. Identify the critical
parameter(s) and model assumptions that will affect your valuation analysis.

Future Direction (15 marks)

To grow and create value for the shareholders you are considering some approaches listed below.
Consider two of the following:

1. Purchase another firm – identify a potential target. What kind of acquisition would this be
(e.g., horizontal, vertical, etc.)? Describe the potential synergies, with specific reference to
the two companies being considered. Identify one comparable transaction to assess an
appropriate multiple for the purchase. How should your company finance this purchase?
2. Be purchased – identify a potential acquiror. What kind of acquisition would this be (e.g.,
horizontal, vertical, etc.)? Describe the potential synergies, with specific reference to the two
companies being considered. Identify one comparable transaction to assess an appropriate
multiple for the purchase.
3. Internal growth – Possibilities include, but are not limited to new products, entering new
markets, capital budgeting projects. Identify one potential project and create a high-level
capital budgeting analysis. Identify and estimate relevant cash flows for the major categories
(i.e., revenues, costs, depreciation, working capital, etc.).
4. Other – there may be another option for your company. Identify and explain. Of the two
options you selected to discuss, which do you recommend that the company pursue? Your
recommendation should be supported with arguments and qualitative or quantitative
analysis. (Note: You are not required to develop another DCF model based on your
recommendation) (Maximum of 300 words for the recommendation.)

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REPORT MARKING SCHEME (out of 100)
Report Contents 80 marks (allocated as above)
Writing and Formatting 20 marks (i.e. grammar, concise, citations, no typos, etc.)
GENERAL INSTRUCTIONS

• The report should be self-contained: relevant tables should be included in the main report
(in the body of the text or as an appendix).
• The report should be concise and well organized. Figures and tables may be included in the
report. Figures, tables, references, table of contents, and appendices are excluded from the
word count.
• An Excel workbook that shows your calculations and quantitative analysis is required. It
should contain enough detail such that another analyst could replicate your work.
• For research and obtaining financial information, we recommend utilizing public information
such as 10-Ks, 10-Qs, MD&As, Investor Presentations, Equity Research Reports, Industry
reports, or any other relevant source such as FactSet, Capital IQ, or WRDS. Guidance on
finding such information is available through the Rotman Finance Lab. Please reference all
the sources you use.

FORMATTING

• Include a Rotman Commerce cover page, Table of Contents, Executive Summary,

Appendices.
• Cover page, Table of Contents, and Appendices are not included in the page count.
• The Executive Summary is included in the page count limit and should be a half to one page
long.
• Supplementary data should be in an appendix, which does not count towards the report
length. (Note: the appendix should contain only items specifically referred to in the text.)
• Do not strictly copy and paste tables from Capital IQ or other sources. Download the required
data into a cleanly formatted table.
• Font style - Times New Roman, 12-point, double-spaced.
• Citations in APA format and page numbers are required.
• Legibility is important. You should expect that the reader will either print out your report or
read it on a small tablet.

SUBMISSION

• Your report submission consists at a minimum the following files:

o PDF document that answers the questions and integrates your analysis.
o Excel workbook that shows your quantitative analysis.

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• On the Rotman Commerce cover page, please include the following:
o Group number
o Names and student numbers of each group member
o Name of your selected company
• This is a group assignment. Only one member of the group needs to submit electronically on
Quercus on behalf of the group. Individual assignments will not be accepted.

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