PROJECT: understanding of financial securities and markets to analyze a real company.
As a general guideline in doing the above analysis you should focus on the following aspects:
- Industry and Firm Analysis: Nature of the industry which your company belongs to. Focus on things such as the regulations, seasonality, supply and demand patterns, need for labor and technology and any special needs that might force the company to accumulate any specific assets/liabilities.
- Management and Governance: Ownership and control, board structure and firm’s interactions with the markets (Some of the data needed for this analysis can be obtained
from the proxy reports via Edgar: Look up for form DEF 14A)
- Evaluation: Cash Flows, growth pattern, any special projects that company is heavily
- Risk and Return: What is the risk profile of your company? (How much overall risk is there in this firm? Where is this risk coming from (market, firm, industry or currency)? How is the risk profile changing? What is the performance profile of an investment in this company? What return would you have earned investing in this company's stock? Would you have under or out-performed the market? How much of the performance can be attributed to management? How risky is this company's equity? Why? What is its cost of equity? How risky is this company's debt? What is its cost of debt? What is this company's current cost of capital?
- Diversification strategies; What are some of the diversification strategies that an investor of the firm can adopt to minimize the investment risk and create a portfolio for optimal risk-return relationship?
This work will be evaluated on the basis of creativity and the depth of understanding of the material as shown in the analysis. It will be adjudged on the basis of the written report.
Should have table of contents and reference
Can have graphs