Investment Analysis Paper on Ford Motor Group

| October 3, 2018

Investment Analysis Paper on Your Company Name Here
Your Name Here
Your University hear

Investment Analysis Paper on Your Company
Name Here
For seven weeks,
you will be building this paper. Each
week you will add a section and each week I will provide feedback. You will then incorporate my feedback and add
a new section each week. In week seven,
the paper will not only be a complete and thorough financial analysis, it might
almost be perfect. In this document, I
provide headings for you to follow. Use
this introductory space to write a paragraph or two that presents basic
business information (product, size, age, whatever) about your company.
It is an
expectation of this assignment that you follow this template; the headings are
provided to help you complete the assignment accurately. Remember that one paragraph of content is
required between headings as a minimum and that a paragraph is a minimum of
three sentences. Build you reference
section each week and ensure that each reference is list in alphabetic order.
Board
of Directors
Week one, select a publicly traded company that you wish
to analyze for this paper. Submit the name to your Instructor for approval.
Obtain the company’s financial statements (annual report) and the most recent
proxy statement. Using the information on the proxy statement, provide a board
of directors as the headings below suggest.
Monitoring Potential of
the Firm’s Board of Directors
You will want to
use level 2 headings within each weekly section.
Strengths and Weaknesses
of Board Structure
Add your content
here
Ethical Concerns
Add your content
here
Competitive
Financial Ratio Comparison
In week two, you
will begin your analysis of the financial data. Remember to add this content to
your week 1 paper; in other words, I will want to see that week 1’s feedback
has been incorporated and I will see the new week 2 content, too.
DuPont Identity
You will want to calculate the DuPont identity for your
company and as many competitors as you want.
This area will require a table or an appendix or both. Recommend a table or appendix that includes
this information.
Table 1
Raw Data for XYZ Company

Company Name

Year __

Year __

Year __

Net income

Revenue

Information from

Assets

balance sheet

Equity

Repeat the above table for the competitor(s).
Use the following equation
.0/msohtmlclip1/01/clip_image002.gif”> (1)
And another table that looks like this for the DuPont
analysis.
Table 2
DuPont Analysis

ROE

Profit Margin

Asset Turnover

Equity Multiplier

Company

Year __

Year __

Year __

Competitor

Year __

Year __

Year __

Differences or Trends
Add your content
here
Growth
In week three, you
will analyze your company’s growth using the growth model.
Dividend Growth Model
This section will
require a table or appendix or both. Add
a comment or two regarding your findings – are they logical or feasible?
Table 3
Dividend and Stock Price
Raw Data for Your Company

Company Name

Year _____

Net income

$

Equity

$

Total dividends
paid

$

Outstanding
shares

Earnings per
share (EPS)

$

Dividends
paid per share

$

Stock price
as of ____

$

Table 4
Growth Rate for __________

Analysis

Formula

Year
___

ROE

Net income/ Equity

Retention ratio

1 – (cash dividends/ net income)

Growth rate in earnings (g)

Retention ratio x ROE

Dividend
Discount Model (DDM) = .0/msohtmlclip1/01/clip_image004.gif”> (2)
.0/msohtmlclip1/01/clip_image006.gif”> (3)

Issues with Using the
Growth Model
Add your content
here
Reasonableness of Constant
Growth
Add your content
here
Annual
Report
Week four is the
week you will read the annual report
Potential Real Options
Add your discussion
here; are the options industry or company specific
Capital Budgeting Process
How would theses
options affect your company’s budgeting process?
Beta
In week 5, you will
discuss your company’s beta. Research investment websites as betas are
published in several sources – no need to calculate.
Expected Return – CAPM
Present your
calculations using a table, or a figure, or reference the appendix.

.0/msohtmlclip1/01/clip_image008.gif”>

(4)

The average historical equity premium is 6.9%, so 7% is an
estimate for the risk premium (Ross, Westerfield & Jaffe, 2013).
Dividend Growth Model versus
CAPM
Add your discussion
here
Debt
and Equity
In week six, you
will discuss your company’s debt and equity structure.
Equity
Discuss equity
value and equity cost here – remember to use tables, figures, or appendix as
appropriate.
Table 5
Market Value of Equity

Company name

Year

Shares
outstanding

Price as of
____ per share
Market value
of equity

CAPM

Debt
Discuss debt value and debt cost here – remember to use
tables, figures, or appendix as appropriate.
Table 6
Cost of Debt

Company name

Year

Long term
debt
Current
Portion of Debt
Total Debt

Cost of Debt
%

Tax Rate

.0/msohtmlclip1/01/clip_image010.gif”>

(5)

Weighted Cost of Capital
Show your calculation of the weighted cost of capital
here.
Table 7
Weighted Cost of Capital
Raw Data

Company name

Value $

%

Equity (Rs)

Debt (Rb)

Total Value

.0/msohtmlclip1/01/clip_image012.gif”> (6)

Capital Budgeting
Assumptions
Any assumptions and
difficulties?
Competitive
Review of Debt and Equity Mix
And in our last
week, you will compare your company’s debt and equity mix (see your prior work)
to that of the competitors you discussed earlier.
Competitive Review
Repeat your WACC analysis from above for a competitor. This section
will require a table or appendix or both.
Capital Structure Theories

General discussion
here
Summary
Conclude Week seven
with a current stock price analysis; given all of the analysis you performed
above, would you invest in this company? Why or why not?

Reference
Ross, S. R., Westerfield, R. W., &
Jaffe, J. (2013). Corporate finance
(10th ed.). NY:McGraw-Hill.
Every week you will be adding
citations and references so this section will grow accordingly. Be sure to use the hanging indent feature of
the software to make formatting references simple.

Appendix A

Use when needed.

Appendix B

Appendix C

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