Reference no: EM132247600

Topic - Choose a company is listed on the stock exchange in Germany, Europe, the United States, or any other country of your choice.

Our company is Adidas and our competitor is Nike

Your Task

You are required to analyse and critically evaluate the financial statements, annual reports, etc. about the company of your choice to answer the following questions:

1. Briefly introduce the company and the types of the products they trade in, the sector of industry (1 to 2 slides).

2. What is the capital structure of these companies? What is the percentage of debt and equity? Calculate the WACC of the company.

3. Did the company issue any preferred stock or bond? If yes, explain why they did so and how much was the cost of borrowing. What is the bond rating of the company and how it has affected the cost of borrowing in the company?

4. Evaluate the stock prices of the company for the past 6 months and 1 year. Then critically explain a few recent news or information that caused a change in the price (that is related to Efficient Market Hypothesis).

5. Select at least one competitor of the company in the same industry and critically evaluate the financial performance (e.g., P/E, D/E, total assets, total equity, total debt, sales, market share, net income, EPS, dividend, etc.) of the two.

6. What is the P/E ratio and EPS (bothttm (trailing twelve months) and forward, go to Yahoo Finance and check the Statistics and Analysts buttons) of the company? What is the benchmark of the industry? Compare the P/E ratio of your selected company with those of competitors and the industry.

7. Had you invested in the company five years ago, how much would have been your return by at present? Calculate both the HPR and Geometric Average Return.

8. At the end of your presentation, you should deliver a recommendation to your classmates on the decision to invest in that company or not. Therefore, your presentation must have a clear objective and you should summarize and address those objectives at the end by considering all the points mentioned above. Objectively evaluate the decisions made by the company and/or investors in the past. Which decision do you agree or disagree with? Why? You should work as if you are preparing a technical report for the investors of the company.

Structure of the Group Presentation

1. Cover page
o The first slide must contain the full names of all group members, the logo of the school as well as the name of the course and the name of the professor.
2. The Table of Contents
3. Introduction (1/2 pages)
o Background and Scope
o Method of Investigation
4. Critical analysis:
o Answer to the 8 questions byanalyzing using theories and models studied in class
o Use of facts, figures, graphs and visual material (7 pages max)
5. Conclusion and Recommendation (1 page)
6. Bibliography (1 page)
o You should use the Harvard Referencing System.
7. Appendix

Note: Only need to do 4 questions