The capstone project is intended to be the culminating academic experience for undergraduate finance and accounting students. It allows students to conduct an independent research project that demonstrates their skills in applying what they have learned throughout their coursework. Some key deliverables a capstone project in this field may include:
A comprehensive financial statement analysis and audit of a public company. This would involve obtaining the company’s financial statements (balance sheet, income statement, cash flow statement) for the past 3-5 years from sources like EDGAR. Students would perform both a horizontal and vertical analysis to examine trends over time and identify key ratios. They would audit the statements for any issues, do comparative company and industry analysis, and make recommendations. This could be around 5,000-7,000 words.
A detailed financial forecasting and budgeting model for a private company. Students would need to gather internal financial and operations data from the company. They would then build out comprehensive income statements, balance sheets, and cash flow statements projected for the next 3-5 years on a quarterly basis. Assumptions would be documented for all revenue and expense line items. Forecasting techniques like trend analysis and regression could be utilized. Accompanying narratives would explain forecasting methodology and key assumptions. The model itself and a 7,000-10,000 word written report would be delivered.
A full leveraged buyout analysis and presentation for a potential acquisition target company. This would require collecting public and potentially some private company data. Students would value the company using multiple approaches like discounted cash flow analysis and comparable company/transaction multiples. A pro forma model would show the financial effects of the acquisition including projected income statements, balance sheets, cash flows, and debt schedules for the combined entity for 5 years. An PowerPoint presentation estimating 15-20 slides would visually summarize the analysis and recommendations.
A comparative case study analysis of two or three public companies in the same industry examining strategic issues. Students would comprehensively research the companies’ operations, strategies, competitive positions, financial performance, and valuation. A thorough written case study paper of 10,000-15,000 words would compare and contrast the companies, perform ratio analysis, and draw conclusions about which company is better positioned strategically and financially. Relevant exhibits would accompany the written case study.
An original equity research report on a publicly traded company recommending a “buy,” “sell,” or “hold.” Students would conduct due diligence research compiling all publicly available information on the company like SEC filings, earnings calls, industry reports, Wall Street analyst reports, and company websites. The report of 7,000-10,000 words would provide an objective picture of the company’s business, recent performance, outlook, valuation, and risks. A financial model would project 3-5 years of income statements, balance sheets, cash flows. Extensive exhibits would accompany the report which would include charts, graphs and financial statement tables to support the investment thesis.
An in-depth corporate financial planning project for a private or public company. Student would work with a company to identify strategic growth/investment opportunities requiring capital. They would developed detailed operating and capital budgets and long-term financial plans for 5-10 years including projected years income statements, balance sheets, cash flows and financial rations under various scenarios. Accompanying this model would be a written 7,000-15,000 word financial feasibility analysis examining the viability, risks and returns of the proposed strategic initiatives with alternatives considered. The final deliverable would provide the capital structure and sources of funds recommended.
The above represent some large, comprehensive deliverables that could really showcase synthesis and application of finance and accounting skills learned in a capstone experience. While the scope and specifics could vary depending on a student’s interest area and company/data availability, these provide substantive, real-world-like projects requiring in-depth independent research, analysis, modeling, and written communication to demonstrate mastery of the subject matter. The deliverables would give evidence of a student’s readiness to transition into a career in finance, accounting, consulting, or other business fields upon graduation.