Business finc 178822 | Business & Finance homework help

  

Project Description

OBJECTIVE

Dow-DuPont Company

Pages: 8-10. 

The specific objective of this graded written research exercise is to prepare an “executive level financial report” to the Chief Financial Officer (CFO) of a mythical company in which you are employed as a financial analyst.  This report will pertain to the financial evaluation of a real, publicly-traded, company. It will require independent research (web-based or library), careful financial analysis, and the proper application of key financial theories and formulas. Dow-DuPont Company

that is to be analyzed for this project. 

Alternatively, you can request approval of another publicly traded company. This request must be submitted before the end of the first week of the course. The request must include

identification of the company by ticker symbol and name

a reasonable and appropriate explanation of why you want to examine the alternative company

the source of the analyst’s report that will be used in the analysis (which must be submitted to me)

acknowledgement by you that all of the specific elements of the assignment (see below) will be prepared by you and included in the final research project report

Specifically, the primary question is: will Dow-DuPont Company

be financially viable over the next two to three years?

To assist you in your task, the CFO has provided the following general guidance. Since it is recognized that the industry is undergoing a major contraction, it is very important to comparatively evaluate Dow-DuPont Company

financial and stock performance trends against its Industry or major competitor.

SUGGESTED WEBSITES

HYPERLINK “http://www.morningstar.com” www.morningstar.com – To find the information for your company you need to type the stock symbol in the Quoteswindow to get into the company’s page.

HYPERLINK “http://www.marketwatch.com” www.marketwatch.com  -To find the information for your company you need to type the stock symbol in the Searchwindow to get into the company’s page.

HYPERLINK “http://www.money.cnn.com” www.money.cnn.com  -To find the information for your company you need to type the stock symbol in the Searchwindow to get into the company’s page.

HYPERLINK “http://www.finance.yahoo.com” www.finance.yahoo.com – To find the information for your company you need to type the stock symbol in theSearch window to get into the company’s page.

HYPERLINK “http://www.nyse.com” www.nyse.com – Click on Data, then click on Stocks (under Quotes), and type the name of the company or the stock symbol in the window “Keyword or symbol” to get into the company’s page.

HYPERLINK “http://www.nasdaq.com” www.nasdaq.com – To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.

Company’s websites

YOUR SPECIFIC ASSIGNMENT

Using the information from the websites the students have to develop evaluation of the financial and stock performance for Dow-DuPont Company. (Totally 85% of the assignment grade)  

-1—Background and Industry (one short paragraph). 

-2—Analysis of the most significant financial performance results. (15% of the project grade)

Select of most significant financial performance results for the company. Create Dow-DuPont Company a table that contains the  financial performance results for the last three years and for the major competitor or industry for the last year: Revenue, net income, working capital, and other financial performance results of your choice. Present the table with this information in your report.

Write about 1 page of the trend analysis of these financial performance results.

-3— Financial ratio analysis. (15% of the project grade)

Find financial ratios for the company for the last 1-3 years and its major competitor for the last year in the Internet.

      Present the ratios as the table(s) in your project.

      Write about 2 pages of analysis of the ratio results that you found. Compare the ratio results against the industry or main competitor. In your analysis you should answer the following questions:

How liquid is the company?

How is the company financing its assets?

Is management generating a substantial profit on the company’s assets?

-4- Evaluate Return on Equity for the company for the last three years using the DuPont analysis. (10% of the project grade)

Taking the information from the Income statements and the Balance sheets, calculate the company’s net profit margin, total assets turnover equity multiplier, and return on equity using the DuPont formula for the company for three years. Show your calculation!

ROE = Net profit margin x Total assets turnover x Equity multiplier

        = Net income/Sales x Sales/Total assets  x Total assets/Common equity

You can use Revenue instead of Sales.

        b. Compare the results to main competitor. For the major competitor you can use ratios from the Internet or calculate them for the last year.

Write about 1 page of analysis of the results that you received. In your report please answer the question: If the management of the company would like to improve their return on equity, what should the management of these companies do? 

-5- Evaluate other areas of financial analysis: capital spending, Beta values, credit rating service valuations (if possible), bond rating valuations (if possible), etc. (10% of the project grade)

1) Find the data for capital spending. How much did THE COMPANY spend on research, development, and engineering in the most recent year? How did this compare with the previous year?

2) Find the current beta for the company and its major competitor in the Internet. Find credit rating service valuations (if possible), bond rating valuations (if possible).

Write about 0.5 page of analysis of beta values that you found. Compare the beta values against the main competitor. In your report please answer the question: How risky the company is?

-6- Collect and evaluate the data about stock performance of the assigned company’s for the last one year. (20% of the project grade).

1) Find the market ratios for the company for the last 1-3 years and its major competitor for the last year in the Internet.

Present the market ratios as the table(s) in your project.

Write about 1 page of analysis of the market ratio results that you found. Compare the market ratio results against the industry or main competitor. In your report please answer the question: Are the common stockholders receiving an adequate return on their investment?

Compare the P/E ratio of your company with the industry average. Is there a difference between these two numbers? Is the stock overvalued, undervalued, or properly valued? Why?  In accordance with your findings, is it reasonable to buy the stock? Please explain your answers.

-2) Analysis of the historical stock prices trend for the last year.

Collect and evaluate the data about stock prices of the assigned company’s for the last one year for the company and its major competitor.

Create the chart(s) using the stock price chart tools on the websites or Excel. Present the chart(s) in your project.

Write about 0.5 page of analysis the historic stock prices trend for the last year.

3) Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on THE COMPANY stock. Note that you will need the risk-free rate and the market return. Show this information in your project.

1. Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on stock. Note that you will need the risk-free rate and the market return.

a) To get the current yield on 10-year Treasury securities go to www.finance.yahoo.com -click on Markets – U.S. Treasury Bonds Rates.  You will use the current yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks.

b) Between 1926 and 2014, the compound annual rate of return of S&P 500 is estimated a 10.5%. We will use this number as the market return.

c)  Calculate the required return on the stock using the Capital Asset Pricing Model (CAPM) Security Market Line. Please show your work.

2. There are several methods how to calculate the growth rate. One of the possible ways is to calculate the sustainable growth rate as g = ROE *(1- Dividend payout ratio). You can find ROE and the dividend Payout Ratio on HYPERLINK “http://www.finance.yahoo.com” www.finance.yahoo.com under Statistics.

Calculate the company’s sustainable growth rate. Please show your work.

3. Apply Gordon model (constant growth rate model) to calculate the intrinsic (economic) value of the stock. Please show your work.

Please note that for some companies it is not possible to use Gordon model. If that is the case, please explain why it is not possible to use this model for your company. What other models is it possible to use?

4. Compare the result of your calculations with the current stock price. Is stock overvalued, undervalued, or properly valued? Why?  In accordance with your findings, is it reasonable to buy the stock? Why? Please explain your answer.

-7- Develop a specific recommendation, with supporting rationale, as to whether 

or not the assigned company’s recent trend in financial and stock performance is of sufficient financial strength to warrant entering into a long-term commitment (about 1 page) (15% of the project grade).

Duepapers
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.