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Assume you are a professional financial analyst working for a wealthy investor. Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is not in his vocabulary). Your client would like to see two (2) companies you think are promising compared side-by-side, with a recommendation from you regarding which is the better investment choice (which should be supported by the numbers). In your analysis of the two (2) companies, be sure to include the following:
Company Overviews. Conduct research and describe the companies, their operations, locations, markets, and lines of business. Collect financial statements for the past three (3) years, fiscal or calendar (please insert these in an appendix to your paper). These financial statements must include at least the income statement and the balance sheet.
Evaluate the vulnerability of the company to external forces such as a recession, higher interest rates, and global competition.
Financial Performance. Based on the financial trends of the company, predict how these trends will impact financial performance in future periods. Explain your rationale for this prediction.
Given the performance of the stock in the periods presented on the company’s financial statements, discuss how the stock is likely to perform in the future, what type of investor would be drawn to this stock, and make a recommendation to management to improve stock performance.
Recommendations. State and support your opinion of each company’s common stock as an investment opportunity. Assume that you can choose only one (1) of these companies. State your choice and provide a solid defense for the company that you would choose.
Present your findings and recommendation to your client in a 7-9 page paper in which you:
1. Provide a detailed overview of two (2) U.S. publicly traded companies. This should be one to two (1-2) pages.
2. Evaluate the vulnerability of each company to external forces such as a recession, higher interest rates, and global competition.
3. Based on the financial trends of each company, predict how these trends will impact financial performance in future periods. Explain your rationale for this prediction.
4. Select five (5) financial ratios most appropriate to determining which of these two (2) companies would be a better investment. Perform a financial analysis and draw a conclusion to make this determination.
5. State and support your opinion of each company’s common stock as an investment opportunity. Assume that you can only pick one (1) of these companies. Provide a solid defense for the company that you would choose.
6. Cite at least five (5) quality references.
Your assignment must:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
Examine the concepts related to financial management and the financial environment.
FIN 540 – Assignments and Rubrics
©2011 Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information
and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of
Strayer University.
FIN 540 Student Version 1118 (1138 8-31-11) Page 7 of 10
Evaluate different types of financing available in the marketplace and the related impact on firm value.
Use technology and information resources to research issues in corporate finance.
Write clearly and concisely about corporate finance using proper writing mechanics
Grading for this assignment will be based on answer quality, logic/organization of the paper, and language and writing skills, using the following rubric.
Points: 200 Assignment: Professional Financial Analyst Criteria Unacceptable Below 70% F Fair 70-79% C Proficient 80-89% B Exemplary 90-100% A
1. Provide a detailed overview of two (2) U.S. publicly traded companies.
Weight: 15%
Did not submit or incompletely provided a detailed overview of two (2) U.S. publicly traded companies.
Partially provided a detailed overview of two (2) U.S. publicly traded companies.
Satisfactorily provided a detailed overview of two (2) U.S. publicly traded companies.
Thoroughly provided a detailed overview of two (2) U.S. publicly traded companies.
2. Evaluate the vulnerability of each company to external forces such as a recession, higher interest rates, and global competition.
Weight: 15%
Did not submit or incompletely evaluated the vulnerability of each company to external forces such as a recession, higher interest rates, and global competition.
Partially evaluated the vulnerability of each company to external forces such as a recession, higher interest rates, and global competition.
Satisfactorily evaluated the vulnerability of each company to external forces such as a recession, higher interest rates, and global competition.
Thoroughly evaluated the vulnerability of each company to external forces such as a recession, higher interest rates, and global competition.
3. Based on the financial trends of the company, predict how these trends will impact financial performance in future periods. Explain your rationale for this prediction.
Weight: 15%
Did not submit or incompletely predicted how these trends will impact financial performance in future periods, explaining your rationale for this prediction.
Partially predicted how these trends will impact financial performance in future periods, explaining your rationale for this prediction.
Satisfactorily predicted how these trends will impact financial performance in future periods, explaining your rationale for this prediction.
Thoroughly predicted how these trends will impact financial performance in future periods, explaining your rationale for this prediction.
4. Select five (5) financial ratios most appropriate to determining which of these two (2) companies would be a better investment. Perform a financial analysis and draw a conclusion to make this determination.
Weight: 20%
Did not submit or incompletely selected five (5) financial ratios most appropriate to determining which of these two (2) companies would be a better investment; did not or incompletely performed a financial analysis and drew a conclusion to make
Partially selected five (5) financial ratios most appropriate to determining which of these two (2) companies would be a better investment and partially performed a financial analysis and drew a conclusion to make this determination.
Satisfactorily selected five (5) financial ratios most appropriate to determining which of these two (2) companies would be a better investment and satisfactorily performed a financial analysis and drew a conclusion to make this determination.
Thoroughly selected five (5) financial ratios most appropriate to determining which of these two (2) companies would be a better investment and thoroughly performed a financial analysis and drew a conclusion to make this determination.
FIN 540 – Assignments and Rubrics
©2011 Strayer University. All Rights Reserved. This document contains Strayer University Confidential and Proprietary information
and may not be copied, further distributed, or otherwise disclosed in whole or in part, without the expressed written permission of
Strayer University.
FIN 540 Student Version 1118 (1138 8-31-11) Page 8 of 10
this determination.
5. State and support your opinion of each company’s common stock as an investment opportunity. Assume that you can only pick one (1) of these companies. Provide a solid defense for the company that you would choose.
Weight: 20%
Did not submit or incompletely stated and supported your opinion of each company’s common stock as an investment opportunity, providing a solid defense for the company that you would choose.
Partially stated and supported your opinion of each company’s common stock as an investment opportunity, providing a solid defense for the company that you would choose.
Satisfactorily stated and supported your opinion of each company’s common stock as an investment opportunity, providing a solid defense for the company that you would choose.
Thoroughly stated and supported your opinion of each company’s common stock as an investment opportunity, providing a solid defense for the company that you would choose.
6. 5 References
Weight: 5%
No references provided.
Does not meet the required number of references; some or all references poor quality choices.
Meets number of required references; all references high quality choices.
Exceeds number of required references; all references high quality choices.
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