Investment Analysis Template – FIN 320 – Week 8

Section I Overview and Financials- Provide a detailed overview of the stock of the publicly traded U.S. corporation you selected in the assignment of Week 4. Provide the rationale for your selection and plans for a diversified portfolio

From the company you chose in Week 4, go to the Profile Section (in Yahoo Finance) and provide a summary in your own words.

Also indicate why you would select this company in your portfolio to make it diversified (I.e. strong financials, longevity, values of the company , etc)

You can use Yahoo! Finance, Google Finance, or MSN Money or the Strayer University Library) to review the company.  Example below is from Yahoo! Finance

Example:

Microsoft Corporation

Ticker Symbol – MSFT

Overview

https://finance.yahoo.com/quote/MSFT?p=MSFT&.tsrc=fin-srch

Collect financial statement data for the prior three years. You can copy and paste the data as there may be a charge to download it. You can find the information in Financials Section in Yahoo! Finance for your company

Section II – Select five financial ratios, then analyze the past three years of financial data for the investment (please obtain data from the financial statements or the equivalent)

Go to the Statistics page in Yahoo Finance and choose at least 5 financial ratios.  You may need to scroll down to see all of them.

Some good ratios to use are:

1)      Profit Margin = (Net Profit/Total Revenue) X 100

2)      Current Ratio = (Current Assets/Current Liabilities)

3)      Return on Equity =

{Net Income / [(Prior Year Shareholder’s Equity + Current Year Shareholder’s Equity)/2)]}

4)      Return on Assets

{Net Income / [(Prior Year Total Assets + Current Year Total Assets)/2)]}

5)      Debt to Equity Ratio = (Total Liabilities/Total Shareholder’s Equity)

Calculate each ratio for the three years from your financial statements and comment on their trends.  For example, if the Current Ratio numbers are 1.2, 1.0 and .98, you would comment that the liquidity of the company is trending downward, and they may run into problems paying current debt in the future. 

Do the above analysis for each ratio

Section III – Analyze Price to Market Beta

·       Analyze the price of the investment to stock market beta for the past five years.

·       To do so you can go to https://www.profitspi.com/stock/view.aspx?v=stock-chart&uv=260209&p=AAPL and overlay the Beta to Stock Price. When you apply the changes the Graph will appear.

·       Note:  try different options under Customized Chart Studies and Settings areas

Section IV – Type of Investor

·       Determine the type of investor who would be the best candidate for the chosen investment (e.g., a risk-averse investor, an aggressive investor, a broker, and a dealer in the market).

·       Provide a rationale for why this investment is a solid choice. Support your assertion that someone with the investor profile you outlined should invest in this stock.

·       Note: make sure you include your reasons for why you chose the Type of Investor

Section V – Sources

• List five resources to demonstrate that there is enough information to support your decision regarding your selected investment.

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