Blackberry’s Financial Statement Analysis - Long Term Debt

Blackberrys Financial Statement
Blackberry's Financial Statement

Problem I. Estimated useful life

As in Case 8.1 c, estimate the average age of depreciatable assets, the percentage of PP&E that has been used up, and the remaining useful life for WMT and AMZN during 2013-2018. How might an analyst use this information?

Problem II. Credit analysis

Examine Blackberry’s long-term debt financing activities in the financial statement. Do you see any changes in cost of debt during 2013-2018? As an example, you may evaluate the changes in the C’s (The C’s: Circumstances, credit history, cash flows, collateral, capacity for debt, contingencies, character of management, communication, and conditions or covenants) as well as major ratios to see if its bond rating improved enough to warrant a decrease in interest rate from 6% to 3.75% related to its debt refinancing in 2016.

Problem III: Blackberry turnaround

Mr. John Chen, CEO of Blackberry, recently announced that the company had successfully completed its turnaround

Using Fact set data and Blackberry’s filings from 2013 to 2018, answer the following questions.

  1. Define and visually illustrate the turnaround using at least two metrics. For example, one of the metrics might be the Altman’s Z score over time.
  2. Assess the company’s operating/investing/financing activities and identify key strategic initiatives that played an essential role in its turnaround. For example, Blackberry increased its software revenue through a series of acquisitions.
    1. Analyze the revenue mix from both software and hardware segments over time.
    1. Comment on its key acquisitions and how they fit into the turnaround case.
    1. Summarize and comment on profitability ratios as in Exhibit 4.21 on page 243.
    1. Comment on its inventory management strategies.
    1. Comment on its IP licensing strategies.
    1. Comment on its real estate dealings in 2014.
  3. Summarize the Blackberry turnaround based on the above discussions. You may include your own analysis as well as areas of concerns in the summary. Limit to 2 pages.

Blackberry’s Financial Statement Analysis - Long Term Debt

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