Intermediate Financial Management

Casework
must be typed and of professional quality. Information and financial
exhibits should be clearly formatted. The paper must be written
clearly with no spelling or grammatical errors. There should be a
logical flow to the paper, for example: Executive Summary,
introduction, observations, analysis, and conclusion. The write-up
should be approximately 2,500 words (about five pages) plus the
executive summary, appendices and exhibits. Please:

• Include
  figures in embedded tables to make the report easy to read and
  understand.
• Footnote
  your data sources.
• Show
  your work in appendices, and annotate it to be clearly understood.
• Format
  spreadsheets to be readable when printed. Make sure page breaks are
  necessary and appropriately placed to help the audience digest the
  information.Small
  print is okay, but
  make sure it is clear.
• List
  any assumptions you make and explicitly identify any criteria you
  use in making judgments.
• Do
  not make your paper too long or two short. Include enough detail to
  make your case clear, but be as brief as you can. Do not include
  fluff or information unnecessary for your audience.

Required:

Research
and analyze the performance and status of Nautilus, Inc. (NLS) using
10-k filings and other sources you determine are appropriate.
Financial data can be found using the SEC’s EDGAR system:
http://www.sec.gov/edgar/searchedgar/companysearch.html
Additional supporting information for the firm, competitors or the
industry might be found using the company’s website (look for
“investor relations”) or from sources such as
http://www.bloomberg.com
orhttp://finance.yahoo.com.

Use
only appropriate financial ratios, and be sure to address each of the
following:

1. Are
   sales healthy, balanced, appropriately diversified, and growing at
   an appropriate rate?
2. Should
   equity investors be pleased with the company’s performance?
3. Is
   the company profitable enough? How has the growth of profit been
   during the last five years?
4. Are
   the assets working hard enough? How has the growth of assets been
   during the last five years?
5. What
   is the effect of financial leverage on this firm? Is the amount of
   leverage appropriate?
6. How
   has the growth of equity been during the last five years?
7. What
   has been the operating cash flow for each of the last five years?
   What has been the free cash flow for each of the last five years?
   How do these cash flow patterns appear to be sustainable or
   unsustainable?
8. Assuming
   the behavior of the company will not change, predict the free cash
   flow for the next five years.
9. How
   risky is this company?
10. Determine
    an appropriate discount rate (briefly
    explain how & why it is appropriate), and determine the present
    value of the predicted free cash flows for the coming five years
    (Ignore any terminal value. Discount just the predicted five years).

Your
executive summary should be short, and have one bullet point for each
of the items listed above (A bullet point should be one sentence
which presents the most pertinent fact or conclusion about that
element of your report). Always write the executive summaryafter
you have written the rest of your paper.