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 SAVE’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 company’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 – 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 company’s performance and provide support for your reasoning.
To begin, you will need to research SAVE’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 SAVE’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 company’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 “sells” 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.