Spirit Airlines, an ultra, low-cost airline (NASDAQ: SAVE), is reviewing how it does business in the current volatile market. You are a junior analyst for the company, tasked with contributing a portion of a competitive analysis. You have been asked to draft a comparative financial analysis that creates a basic benchmark your company’s performance. This task is an opportunity for you to showcase your competency in research, analysis, writing, and public speaking.
You need to determine SAVEâ€™s position in the market by conducting a basic comparative analysis of SAVE versus a competing company within the industry. You must submit a memo to the company CEO explaining the companyâ€™s financial strength and its strength compared to the selected competitor at a company strategy meeting. You need to compare five key indices of financial strength:
- Stock price â€“ 1 year, 6 month, Intra-day (Use on or about May 12, 2017 as the present date)
- Sales/Revenue (over the last three full-years)
- P/E Ratio
- Net Income (over the last three full-years)
In addition, for each metric analyzed, explain the reason for the companyâ€™s performance and provide support for your reasoning.
To begin, you will need to research SAVEâ€™s financial statements. You can find this information on the company website, company 10K Report or on a number of Cook library databases, e.g. Standard & Poors NetAdvantage, LexisNexis Academic (Business > Company Dossier), NASSAQ.com or Yahoo Finance.
Next, you will need to research one of SAVEâ€™s competitors across the same five indices and compare its performance with SAVE.
Part I – Written Evaluation
You will need to draft a report memorandum that succinctly compares the financial strength of both companies.
Your report should answer several key questions:
- Is Spirit Airlines in a stronger or weaker position than its competitor?
- What was your rationale for selecting the competitor to serve as a measure for the analysis?
- What is the reasoning for the companyâ€™s performance?
- Proper memorandum format
- Proper addressee (research the name of the CEO)
- Proper use of sources using APA format
- Include an introductory statement that foreshadows or â€œsellsâ€ the main idea
- Use deductive structure, using strong topic sentences and supporting data
- Condense information using tables, charts, graphs and bulleted points when appropriate
- Use well developed headings
- Use chunked paragraphs
This will require you to use some of the basic principles of business writing:
When you present your information, I will be evaluating your ability to write clearly and succinctly. In other words, get to the point. What is the most important information? I should be able to scan your document and pick out key information quickly and efficiently. If I cannot skim the document in under 90 seconds, then you did not do your job. Additionally, this document must contain clean and well-proofread content (error-free prose). Careless and errant errors in your LOCs (grammar, spelling, punctuation, and word choice) will result in a deduction in your grade.