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How would you explain your ROE performance over two years based on Du Pont Identity analysis? What drove the increase or decrease in your ROE from 2012 to 2013?Would you invest or buy the stock of the firm based on your analysis? Why or why not? Explain i

01 / 10 / 2021 Assignment

This paper circulates around the core theme of How would you explain your ROE performance over two years based on Du Pont Identity analysis? What drove the increase or decrease in your ROE from 2012 to 2013?Would you invest or buy the stock of the firm based on your analysis? Why or why not? Explain i together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.

Goal To apply the concepts (financial ratios) learned in class by evaluating the financial performance of a company of your choice using publicly available financial information.

? Procedure First, choose any firm of your interest but make sure they have all financial and stock prices information for the last 4 years.

Second, save on Excel the annual income statement, balance sheet, cash flow for the most recent last 4 years available for your firm. See page 3-7 how to get the information.

Finally, based on the information, you calculate financial ratios (just for 2 years: 2012 and 2013) and write up your evaluation based on these 2 years only.

? What to do:

1. Calculation of Ratios (30 points) on MS Excel

• Use the Financial statements of your chosen firm to calculate the financial ratios. Save your company’s financial data (Most recent 4 years of i) Income Statement, ii) Balance sheet, iii) Statement for Cash Flow, and iv) daily stock prices of 4 years) on Excel. Name and Save the completed file.

• Name it as ”your last name_”+”your first name_”+”Ticker Symbol_”+”Ratios” For example, my Excel file for Apple, Inc. will be named as “Lee_Cheolwoo_AAPL_Ratios.xls” or “Lee_Cheolwoo_AAPL_Ratios.xlsx”

• It should contain:

o Most recent 4 years’ Income Statement/Balance Sheet/Statement for Cash Flow

o Daily Stock Prices for 4 years (Last day of those 4 years will be the day you get the prices data)

o Ratio Table (Use 2012 and 2013 only). Please show the ticker symbol (Ticker symbol is explained in footnote 2 on page 3) for your firm somewhere in this table so I can check your ratios with your firm’s numbers. Although you provide 4 years of data, you will use just two years¬¬––2012 and 2013––in order to construct your ratios. If you use other 2 years, you’ll be severely penalized.

2. Performance Evaluation (70 points) on MS Word (Usually between 7 to 10 pages)

• Performance evaluation should be typed on MS Word and must be named as ”your last name_”+”your first name_”+”Ticker Symbol_”+”Evaluation.” For example , my word file will be name as “Lee_Cheolwoo_AAPL_Evaluation.doc” or “Lee_Cheolwoo_AAPL_Evaluation.docx”

• Part 1 [20 pts]: Write a short company analysis of the firm IN YOUR OWN WORDS such as:

o brief business history, what business the firm is in, the industry the firm is in,

o information on the firm such as the size of the firm in terms of revenues, number of employees, assets and market value, the current officers, and how the industry as a whole is performing.

• Part 2 [50 pts]: Write an evaluation of the firm by evaluating each ratio:

o what each ratio measures

o and whether the firm is doing better or worse compared i) to the previous year (Time-trend analysis) and also ii) to the industry average (Peer group analysis) [See Appendix A on page 8 for industry average].

o How would you explain your ROE performance over two years based on Du Pont Identity analysis? What drove the increase or decrease in your ROE from 2012 to 2013?

o Would you invest or buy the stock of the firm based on your analysis? Why or why not? Explain in detail.

• Where to submit:

?Send both of them to me at .edu”>[email protected] before or on 6/18/2015 by 5 pm.

# Read Carefully:

• Any failure to follow the instructions described here will cause severe deductions.

• Make sure your excel file and write-up include everything section ‘what to do’ on page 1 describes

• Writing with spelling errors and with low level of elaboration will be penalized.

• I won’t accept late project. Remember that you can turn in your project early but I will not accept late project particularly for the following reasons: computer not working, disk lost, computer crashed, file not compatible, a university excused activity. For a university excused activity, you should arrange your project submission earlier than the submission deadline.

• If you have any further question on the project, ask me after class or email me.

• You are responsible for any consequence because you fail to read this information carefully.

Calculate the following 17 ratios

Column 1

Name of Ratio Column 2

Write the Formula Column 3 (C3)

Calculate Ratio for Year 2012 Column 4 (C4)

Calculate Ratio for Year 2013

1 Current Ratio e.g., CA/CL

2 Quick Ratio (CA-Inv)/CL

3 Total Debt Ratio

4 Debt/Equity Ratio *Total Debt is shown as “Total Liabilities”

5 Inventory Turnover *Cost of goods sold is shown as “Cost of Revenue, Total”; some services firms do not have inv.

6 Receivables Turnover *Sales is shown as “Revenue” | *AR are shown as “Total Receivables, Net”

7 Capital Intensity Ratio 1/TAT

8 Profit Margin

9 ROA

10 ROE

11 Market Price *Find the price in .yahoo.com/”>http://finance.yahoo.com. Use the last trading day’s stock price for each year (year-closing price). See pages 5-7 for instructions

12 Number of Shares Outstanding *See the bottom of the Balance Sheet for “Total Common Shares Outstanding”

*expressed in millions

13 Book value per Share =(Total Equity /number of shares outstanding)

* TE and no. of shares outstanding are expressed in millions

14 Market to Book (M/B) Ratio (Year-closing stock price/Book value per share)

* year–closing stock price is the last trading day’s stock price for that year.

15 EPS =NI/# of shares outstanding (EPS=earnings per share)

16 P/E Ratio Price to Earnings Ratio=Market Price/EPS

17 EBITDA Ratio * Enterprise Value = Total market value of the stock + The book value of all liabilities – Cash

* Total market value of the stock = year-closing price (item 11)* number of shares outstanding (item 12)

* Use ‘Total Liabilities’ for the book value of all liabilities

* EBITDA=Operating Income + Depreciation/Amortization

Instructions: How to find the financial statements information in the internet. Attach the web page by copying the page and pasting it to your project.

How to get the financial statements:

1. Go to .google.com/finance”>https://www.google.com/finance

2. Type in your ticker symbol (if you don’t know what the ticker symbol is, please refer to the original project packet)

3. Click on “Financial”

4. Choose “Annual Data.” Make sure you click on “Annual,” not “Quarterly,” in order to use annual financial statements information.

5. You will see I/S, B/S, Cash Flow under “Financials.” Clicking on “Income Statement” “Balance Sheet” “Cash Flow” will get you what you need.

6. Simply highlight 4 years of data and paste into your Excel spreadsheet. When you paste, use “paste special” and select “text” if copy and paste is not working as you intended.

Instructions: In order to find Historical Stock Prices

Source: .yahoo.com/”>http://finance.yahoo.com

1. Type in your ticker on “Quote Lookup” field on the left

2. Then, click on “Historical Prices”

3. Enter the information being asked such as a start date, and end date, daily.

4. At the bottom of the page, you will find “Download To Spreadsheet.” Click and save it.

?

Below is how your excel file saved looks.

Appendix A. Industry Averages of Financial Ratios

Assume that ratios in this table are the industry averages for the firm you choose for two years you consider. Use information in this table when you write up “Part 2
of the Performance Evaluation”

Name of Ratio Industry Average

1 Current Ratio 1.5

2 Quick Ratio 1.3

3 Total Debt Ratio 0.5

4 Debt/Equity Ratio 1

5 Inventory Turnover 7x

6 Receivable Turnover 8X

7 Capital Intensity Ratio 0.5

8 Profit Margin 10%

9 ROA 15%

10 ROE 20%

11 Market Price

12 Number of Shares Outstanding

13 Book value per Share

14 Market to Book Value 5x

15 EPS $2

16 P/E Ratio 3x

17 Enterprise Value/EBITDA Ratio 5x

†For items from 11 to 13, you don’t have to discuss in comparison to industry average.

††x means times

Ethical Integrity: Plagiarism

• Plagiarism or cheating of any kind will result in an automatic F. No tolerance and no second chance on this issue.

• For more information, .ferris.edu/htmls/colleges/artsands/languages-and-literature/writing-center/Other-Writing-References.htm”>http://www.ferris.edu/htmls/colleges/artsands/languages-and-literature/writing-center/Other-Writing-References.htm

• Alternatively, refer to .suite101.com/content/a-definition-for-plagiarism-a10232″>http://www.suite101.com/content/a-definition-for-plagiarism-a10232



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