This week’s assignment asks you to interpret your findings from the data collected in the Company Analysis and Stock Analysis. You will select one of the
Overview
This week's assignment asks you to interpret your findings from the data collected in the Company Analysis and Stock Analysis. You will select one of the three companies you gathered financials for to develop a brief presentation for shareholders. SEE attachments for information.
Instructions
You will develop a shareholders' presentation for the selected company.
- Create a PowerPoint presentation that includes 6 – 8 PowerPoint slides.
- When creating a PowerPoint presentation, you want to catch the audience's attention by using interesting backgrounds, charts, and graphs, or other graphics to present the information.
- Create talking points for your presentation by adding notes to each slide and comparing the companies' ratios. Use the notes to provide the narration of each slide because the notes will appear in the teleprompter. Use short bullet points on the slides and complete sentences in the notes.
- Now that you’re almost done with your detailed analysis consider what to present to the board of directors to evaluate the quality of their investment in the company. Put together a video presentation to highlight the company’s performance and to motivate investors to continue to invest in the company.
The presentation will include the following financial information:
- Provide a brief company overview and presentation to the board of directors that includes the company name, business structure, and location.
- Include a short summary (no more than one slide) of the following information:
- The ownership and management team.
- Company history.
- Mission statement.
- Product/service.
- Target market/customer.
- Include a short summary (no more than one slide) of the following information:
- Discuss the company's recent financial performance from the ratio analysis.
- Describe the company's competition and the company's performance relative to competitors.
- Discuss any identified problems and recommend solutions.
- Discuss how the company's capital mix affects its stock performance.
- Discuss the company's strategy, market opportunities, and future outlook.
- Present a recommendation to the board of directors on whether investors should invest more in the company or not.
Company Analysis
| FIN534: Financial Management Name: Sara Pilgrim Professor Name: Dr. Ingrid P Nelson Date: 11/17/2024 | |||
| Company Analysis | |||
| U.S. Stock exchange: Company Name: Apple Computer, Inc. | Company 1: Intel Corporation | Company 2 : Microsoft Corporation | |
| Determine the free cash flow for the last two most recent years for the two companies. | 2022: 11.5 Billion 2023: 11.9 Billion | 2022: 59.61 Billion 2023: 67.44 Billion | |
| Explain how a company’s free cash flow (cash flow from operating activities minus capital expenditures) impacts its growth potential. | See attached work document | ||
| Instructions: Find the numbers for these calculations from the income statement or balance sheet for each company from the annual report or 10-K. Make sure the numbers are not from the 10-Q or quarterly report as you want to make apples to apples comparisons. | |||
| Your Name: | Sara Pilgrim | ||
| Industry: | Technology | ||
| Company 1 Name: | Apple Computer, Inc. | ||
| Company 2 Name: | Intel Corporation | ||
| Company 3 Name: | Microsoft Corporation | ||
| Income Statement Information | |||
| Total Revenue | |||
| Apple Computer, Inc. | $383,285.00 | ||
| Intel Corporation | $54,228 | ||
| Microsoft Corporation | $211,915.00 | ||
| Gross Profit | |||
| Apple Computer, Inc. | $169,148.00 | ||
| Intel Corporation | $21,711.00 | ||
| Microsoft Corporation | $146,052.00 | ||
| Net Income | |||
| Apple Computer, Inc. | $96,995.00 | Note: Choose Net Income or EBITDA. Generally accepted accounting principles (GAAP) only requires the use of Net Income and EBITDA is optional. Foreign companies generally do not follow GAAP and use EBITDA because it normally makes the numbers look better. | |
| Intel Corporation | $1,675.00 | ||
| Microsoft Corporation | $72,361.00 | ||
| EBITDA | |||
| Apple Computer, Inc. | $125,820.00 | ||
| Intel Corporation | $9,695.00 | ||
| Microsoft Corporation | $102,384.00 | ||
| Balance Sheet Information | |||
| Total Assets | |||
| Apple Computer, Inc. | $352,583.00 | ||
| Intel Corporation | $191,572.00 | ||
| Microsoft Corporation | $411,976.00 | ||
| Total Liabilities | |||
| Apple Computer, Inc. | $290,437.00 | ||
| Intel Corporation | $81,607.00 | ||
| Microsoft Corporation | $205,753.00 | ||
| Total Stockholders' Equity | |||
| Apple Computer, Inc. | $62,146.00 | ||
| Intel Corporation | $109,965.00 | ||
| Microsoft Corporation | $206,223.00 | ||
| Ratios Calculations | |||
| Calculate the Following Ratios: | |||
| Debt to Equity Ratio Formula (Total Debt/Total Equity) | Total Debt | Total Equity | Debt to Equity Ratio |
| Apple Computer, Inc. | $290,437.00 | $62,146.00 | 4.67 |
| Intel Corporation | $81,607.00 | $109,965.00 | 0.74 |
| Microsoft Corporation | $205,753.00 | $206,223.00 | 1.00 |
| Gross Margin Formula (Gross Profits/Sales) | Gross Profits | Sales | Gross Margin |
| Apple Computer, Inc. | $169,148.00 | $383,285.00 | 44% |
| Intel Corporation | $21,711.00 | $54,228.00 | 40% |
| Microsoft Corporation | $146,052.00 | $211,915.00 | 69% |
| Operating Margin Formula (Operating Income/Sales) | Operating Income | Sales | Operating Margin |
| Apple Computer, Inc. | $114,301.00 | $383,285.00 | 0.30 |
| Intel Corporation | $11,471.00 | $54,228.00 | 0.21 |
| Microsoft Corporation | $88,523.00 | $211,915.00 | 0.42 |
| Find the appropriate amounts from the 10K annual report and insert them into the formula to calculate. | |||
| Formulas | Apple Computer, Inc | Intel Corporation | Microsoft Corporation |
| Profitability ratios: | |||
| Profit margin = Net Income/Sales | 0.25 | 0.03 | 0.34 |
| Return on equity = Net Income/Shareholders' Equity | 1.56 | 0.02 | 0.35 |
| Efficiency ratios: | |||
| Inventory turnover = Cost of Goods Sold/Average Inventory | 33.82 | 2.92 | 53.03 |
| Accounts receivable turnover = Net Sales/Average Accounts Receivable | 12.99 | 74.18 | -51.85 |
| Leverage ratios: | |||
| Debt to equity ratio = Total Liabilities/Shareholders' Equity | 4.673 | 0.742 | 0.998 |
| Debt/Assets = Total Liabilities/Total Assets | 0.824 | 0.426 | 0.499 |
| Liquidity ratios: | |||
| Current ratio = Current Assets/Current Liabilities | 0.988 | 1.542 | 1.769 |
| Quick ratio = (Current Assets – Inventory)/Current Liabilities | 0.785 | 1.516 | 1.808 |
| Discuss three takeaways or an analysis of what you’ve learned about each company based on their financial data. Include at least one paragraph for each company. | |||
| Analysis | |||
| Apple Computer, Inc | Apple has demonstrated satisfactory profitability and reasonable operating efficiency. The above-industry average return on equity and profit margins indicate that Apple has a strong ability to generate actual profits from sales in addition to generating high returns for shareholders. Still, debt financing makes up a large portion of its funding methods, which can lead to problems if not managed well. At the same time, Apple still has a comparatively high inventory turnover, which proves the company’s efficient management of inventory. A low liquidity ratio could mean that the company will have difficulty paying off short-term debt without using more funds. | ||
| Intel Corporation | During the fiscal years analyzed, Intel showed only average profitability and efficiency compared to companies in its industry, which suggests that it has had some difficulty in converting sales into profits and becoming attractive to investors. However, Intel can succeed in this segment if it has a solid current ratio, and the fact that Intel has a strong current ratio means that the company is able to meet its short-term obligations without any stress. Leverage is a very conservative approach and a lower debt equivalent ratio indicates a lower financial risk. Intel also has a very low account Accounts receivable turnover is a fundamental reflection of good collection practices and efficient credit management. | ||
| Microsoft Corporation | Microsoft's profit and cost-sales efficiency are relatively high. The high total Croissance Risqué – Return on Equity and Profit Margin demonstrates how proficiently Microsoft turns its sales into profit and returns worth to shareholders. A moderate debt-to-equity ratio indicates that the company is paying proper attention in using debt, which is actually very important. but at the same time has not over relied on them to finance its activities. Further, the rigidity of turnover ratio indicates good liquidity ratios as Microsoft has the ability to meet its short-term obligations. This food chain’s high inventory turnover ratio means that has an efficiency in its manner of handling inventories. |
Stock Analysis
| Stock Analysis | ||
| Instructions: Find the numbers for these calculations from the income statement or balance sheet for each company from the annual report or 10-K. Make sure the numbers are not from the 10-Q or quarterly report as you want to make apples to apples comparisons. | ||
| Your Name: | Sara Pilgrim | |
| 0 | Technology | |
| Apple Computer, Inc. | NASDAQ | |
| Intel Corporation | NASDAQ | |
| Microsoft Corporation | NASDAQ | |
| Stock | ||
| Ticker Symbol | ||
| Apple Computer, Inc. | AAPL | |
| Intel Corporation | INTC | |
| Microsoft Corporation | MSFT | |
| Stock Price Include the stock price at the balance sheet date. (Stock prices fluctuate daily and are available in the Wall Street Journal) | ||
| Fiscal Year End Date: | 12/31/23 | |
| Apple Computer, Inc. | $191.59 | |
| Intel Corporation | $50.00 | |
| Microsoft Corporation | $311.06 | |
| Market Cap Formula (Share Price/Number of Shares) | ||
| Apple Computer, Inc. | $2,911,930.00 | |
| Intel Corporation | $112,010.00 | |
| Microsoft Corporation | $3,100,880.00 | |
| Price to Earnings Ratio Formula (Share Price/EPS) | ||
| Apple Computer, Inc. | 26.52 | |
| Intel Corporation | 60.88 | |
| Microsoft Corporation | 42.87 | |
| Current Dividend Yield – Year End Formula (DPS/Share Price) | ||
| Apple Computer, Inc. | 0.58% | |
| Intel Corporation | 2.13% | |
| Microsoft Corporation | 0.72% | |
| Discuss the performance of the stocks, how the company's performance impacts the stock performance, and their investment potential. Include at least one paragraph for each company. You can consult the notes to the financial statements that appear right after the financial statements to find a detailed explanation or you can use Management's Discussion and Analysis in the Annual (10K) Report. | ||
| Analysis | ||
| Apple Computers, Inc | Apple's market confidence remains apparent and shows significant room for expansion. The firm dedicates all its profits to research and development, ensuring it remains at the forefront of the tech sector. Apple has consistently drawn in investors by emphasizing consistent, long-term growth, as the dividend yield is relatively low, indicating that investors are primarily interested in the rise in the company's stock price. | |
| Intel Corporation | Because of the anticipated heightened danger, the substantial dividends offer this company an appeal to investors aiming to put their money into high-yield equities. While it's still developing, Intel could potentially see better results moving forward, contingent upon the volatility of the market; it's considered somewhat secure yet also carries a degree of risk. | |
| Microsoft Corporation | Microsoft remains a stable and well-known investment option, showing strong indications of market leadership and potential for expansion. This approach of leveraging technology and expanding its range of services provides investors with assurance in the company's success. The present dividend yield, or the yield from dividends, is relatively small, but it also adds to the investment's worth, making Microsoft a versatile investment choice. |
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Company Analysis
| FIN534: Financial Management Name: Sara Pilgrim Professor Name: Professor Dr. Ingrid Nelson Date: 10/18/2024 | |||
| Company Analysis | |||
| U.S. Stock exchange: Company Name: | Company 1: Amazon (AMZN) : | Company 2 : Apple (AAPL): | |
| Determine the free cash flow for the last two most recent years for the two companies. | 1.Free Cash Flow (2023) = $84.946 billion – $52.729 billion = $32.217 billion 2.Free Cash Flow (2022) = $46.752 billion – $63.645 billion = -16.893 billion (negative FCF) | Free Cash Flow (2023) = $110,543 – $10,959 = $99,584 million Free Cash Flow (2022) = $122,151 – $10,708 = $111,443 million | |
| Explain how a company’s free cash flow (cash flow from operating activities minus capital expenditures) impacts its growth potential. | Since it shows the cash left over after capital and operational expenses are deducted, free cash flow (FCF) is a crucial indicator of a company's financial health. This leftover money can be put to a lot of different uses and is a key factor in assessing a company's potential for expansion. | The ability of a business to grow is largely dependent on its free cash flow (FCF), which offers the capital required for expansion, innovation, and investments in new goods without the need for outside funding. Strong financial cash flow (FCF) allows a business to take advantage of opportunities, weather setbacks, and pay off debt. | |
| Instructions: Find the numbers for these calculations from the income statement or balance sheet for each company from the annual report or 10-K. Make sure the numbers are not from the 10-Q or quarterly report as you want to make apples to apples comparisons. | |||
| Your Name: | Sara Pilgrim | ||
| Industry: | Technology and e-commerce | ||
| Company 1 Name: | Amazon.com, Inc | ||
| Company 2 Name: | Apple Inc., | ||
| Company 3 Name: | Microsoft Corporation (MSFT). | ||
| Income Statement Information | |||
| Total Revenue | |||
| Company 1 Name: Amazon.com, Inc | $574.78 billion | ||
| Company 2 Name: Apple Inc., | $383.29 billion | ||
| Company 3 Name: Microsoft Corporation (MSFT) | $212.03 billion | ||
| Gross Profit | |||
| Company 1 Name:Amazon.com, Inc. (AMZN | $93.805 billion | ||
| Company 2 Name:Apple Inc. (AAPL) | $169.148 billion | ||
| Company 3 Name:Microsoft Corporation (MSFT) | $149.35 billion | ||
| Net Income | |||
| Company 1 Name:Amazon.com, Inc. (AMZN | $30.425 billion | Note: Choose Net Income or EBITDA. Generally accepted accounting principles (GAAP) only requires the use of Net Income and EBITDA is optional. Foreign companies generally do not follow GAAP and use EBITDA because it normally makes the numbers look better. | |
| Company 2 Name:Apple Inc. (AAPL) | $96.995 billion | ||
| Company 3 Name:Microsoft Corporation (MSFT | $72.36 billion | ||
| EBITDA | |||
| Company 1 Name:Amazon.com, Inc. (AMZN | $21.62 billion | ||
| Company 2 Name:Apple Inc. (AAPL) | $113.74 billion | ||
| Company 3 Name:Microsoft Corporation (MSFT | $89.93 billion | ||
| Balance Sheet Information | |||
| Total Assets | |||
| Company 1 Name:Amazon.com, Inc. (AMZN | $527.854 billion | ||
| Company 2 Name:Apple Inc. (AAPL) | $352.583 billion | ||
| Company 3 Name:Microsoft Corporation (MSFT | $411.98 billion | ||
| Total Liabilities | |||
| Company 1 Name:Amazon.com, Inc. (AMZN | $325.979 billion | ||
| Company 2 Name:Apple Inc. (AAPL) | $290.437 billion | ||
| Company 3 Name:Microsoft Corporation (MSFT | $205.75 billion | ||
| Total Stockholders' Equity | |||
| Company 1 Name:Amazon.com, Inc. (AMZN | $201.875 billion | ||
| Company 2 Name:Apple Inc. (AAPL) | $62.146 billion | ||
| Company 3 Name:Microsoft Corporation (MSFT | $206.22 billion | ||
| Ratios Calculations | |||
| Calculate the Following Ratios: | |||
| Debt to Equity Ratio Formula (Total Debt/Total Equity) | Total Debt | Total Equity | Debt to Equity Ratio |
| Company 1 Name:Amazon.com, Inc. (AMZN | $325.979 billion | $201.875 billion | 1.61 |
| Company 2 Name:Apple Inc. (AAPL)<
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