Estimation and Analysis of Free Cash Flows (FCFs) This assignment is designed to

Estimation and Analysis of Free Cash Flows (FCFs)
This assignment is designed to give you a chance to analyze a public company, Netflix Inc. (NasdaqGS: NFLX), using Excel.
The FCF Analysis Project Template is ATTACHED, use for FCF estimation.
Directions:
1. Choose a publicly traded company to be agreed with your professor. This would be Netflix Inc. (NasdaqGS: NFLX)..
2. Use Capital IQ to obtain the complete financial statements. Do NOT use any other financial information providers (such as Yahoo! Finance or Google-Finance). Copy data from Capital IQ the Balance Sheet and Statements of Income tabs on the given spreadsheet template from year t (the most recent fiscal year) to year t-3. In total, you will need to have the data for four (4) consecutive years. Note: use the “download financials” function in Capital IQ.
3. Estimate the free cash flow of the company at the end of the most recent fiscal year-end (year t) using the financial statements as the data source to be used in the ‘Valuation’ tab of the spreadsheet. Repeat the estimation for year t-1 and year t-2. Do NOT use the FCF estimation provided by the Statement of Cash Flows filing or any other financial information providers. You may only use the Balance Sheet and Income Statements.
a. In doing this, use the ‘Valuation’ tab in your spreadsheet template and pull raw data into the spreadsheet using excel formulas. When calculations are required in the Valuation template, again use excel formulas. ** No cell in this spreadsheet should have hard coded numbers, only excel formulas.
b. For estimated tax, please use a 25% tax rate and apply this to EBIT rather than using the firm’s tax number or tax rate. This will reduce volatility as firms are afforded an array of tax benefits which vary from year to year.
4. Write a 2-page report. The report should be pertaining to your interpretations of the FCFs. Major items for discussion/interpretation may include (1) the pattern and trends of the FCFs in the three years, and (2) rationales for any sudden increases/decreases.
MBA 640 Individual Project: Estimation and Analysis of FCFs
Assessment Rubrics:
Your project will be evaluated by the following criteria (100 points in total):
FCF Estimation (50 points)
– Construction of Financial Statements (20 points)
– FCF Calculations (30 points)
Proper Excel Techniques to Present the Analysis (20 points)
– All the calculations must be based on formulas using references in the valuation
template.
– Do NOT enter any number directly into a cell without using a reference (if there’s any).
Report for Interpretations of FCFs (30 points)
– Strictly two pages Word document, Font: Times New Roman 12, Normal Margin, Double Space
(10 points)
– Reasonable and consistent analysis (20 points)
** Required submission: (1) Excel template, and (2) Report **
Your FCF estimation must be an Excel workbook. No other formats, including PDF® or Word® or Mac Numbers are accepted.
AND a 2-page report must be a Word document (double-spaced, 12 point font) for interpretations of FCF. No other formats, including PDF®, are accepted.