Questions:

• How does current year’s net income (i.e., earnings) compare with that in previous years? Compute the annual growth rate in earnings for the last three years. [For example, if earnings in Year 1 and 2 are 100 and 125 respectively, the growth rate from Year 1 to Year 2 is 25%]. What earnings trend do you observe and what factors may be causing this trend?
• Compare the cash flows from operating activities for your firm with the net income for the most recent year. What factors have contributed to the difference between these two numbers?

Tips to consider as you write your narrative:

• Completeness – have all the questions been answered, and does the narrative include required citation list, worksheet, etc?
• Format – is narrative format single sided, double spaced, with a reasonable font such as Times New Roman 12, and about 7 to 10 pages in length (give or take a page or two)?Exhibits and citation lists should be at the end of the narrative, and don’t count as part of the 7 to 10 pages.
• “Readability” – does the narrative flow well and is it easy to read, with good grammar, punctuation, and spelling?An ideal narrative would list question #1 and then immediately answer the question, then clearly identify question #2, and so on.Questions should also “get to the point” immediately, with a direct answer to the question (e.g. We recommend this company as a “buy”), followed by supporting narrative and exhibits.
• Accuracy – are the worksheet numbers accurate, and do they consistently tie to the narrative?Do the worksheet numbers support what the narrative is saying?
• Comparison to previous grade – how much improvement occurred between the first deliverable, when we graded “Check plus”, “check”, or “check minus”?For example, did a group that previously didn’t link many cells in the worksheet make significant links in the revised worksheet? How many of our recommended worksheet format changes did the group incorporate into the final worksheet?