What is the risk profile of your firm

Reference no: EM131306906 , Length: word count:1000

MANAGERIAL FINANCE - ASSIGNMENT

As a financial analyst, you have been asked to analyze a firm. Your task is to make a recommendation as to whether or not to invest in this firm given the analysis you undertake.

Assignment format

• Written report
o About 2000 words using size 12 Times New Roman

- Not including visual aids (tables and figures)
o Double spacing

Assignment details
This assignment provides an opportunity to get some practical experience in applying corporate finance principles to real firms. In the process, you will get a chance to:
• Evaluate the risk profile of the firm, and examine the sources of risk
• Analyze the firm's stockholders
• Examine the firm's investment choices

The firm
• The firm must be listed on the Ho Chi Minh City Stock Exchange (VN100) or the New York Stock Exchange (NYSE) or the National Association of Securities Dealers Automated Quotations (NASDAQ).
• Select a firm that has plenty of publicly available information

Objectives of assessment task:
• Develop critical and analytical skills related to the topic areas addressed in the course
• Develop various research synthesizing skills
• Communicate clearly and effectively

Assessment guide:
• The assignment is to be done individually
• The assignment is to be presented as a business report. Your analysis should provide the support for your recommendations.
• The assessment criteria are attached

Questions to guide your analysis
1. Ownership structure
• Who is the average investor in this firm? (Individual or pension fund, taxable or tax-exempt, small or large, domestic or foreign)
• Is this a company where there is a separation between management and ownership? If so, is there evidence of conflict of interest between management and shareholders?

2. Risk and performance
• What is the risk profile of your firm? (How much overall risk is there in this firm? Interest rate risk, exchange rate risk, market risk, operational risk, and so on)?
• Based on its stock price, do you think this company has performed well over the past five years (please show the chart of the stock price in the past five years? Why)?

3. Investments
• Is there a typical project for this firm? If yes, what would it look like in terms of life (long term or short term), investment needs, and cash flow patterns?
• How profitable are the projects that the firm has on its books currently?
• Are the projects in the future likely to look like the projects in the past? Why or why not?

4. Dividend policy
. How did the firm conduct the dividend policy in the past five years? Is it good or bad, why?

5. Capital structure
. Present capital structure of the firm; explain if that structure is good or bad, why? (student should make comparison with the other firms in the same industry)

6. Valuation
• Do you think that the firm is correctly valued by the market? Why?

Reference no: EM131306906

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