... Apple Inc. has been noted as one of the most positive growing companies in the technology field today. The question is, How do we know this and how do we measure this? The answer is through three major financial business statements; The Income Statement, Balance Sheet, and Cash Flow Statement. All of these statements may seem to be redundant in what they portray but all of them are necessary in bringing to light the actual financial standing of any company. These statements are how a financial analyst can put together an honest analysis of the how the company is doing financially. Statements: The Income Statement for any company is a statement that shows the year-to-date profits and losses. In today’s world of the internet, it can be pulled as frequently as daily, weekly, monthly, quarterly, or just yearly. The balance sheet for a company gives a snapshot of the financial condition at any given moment but is usually generated at the end of an accounting time period (often at the end of the month or quarter). This sheet shows the assets, liabilities, and equity of the company to give a rounded idea of how the company is doing financially. A balance sheet is much like balancing a personal checkbook in that it is a way to log everything to do with the company including detailed costs and profits. The Cash Flow statement is another statement used to measure the amount of money going in and out of a company. This statement is more of a general...
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...■ Fundamental Analysis: Fundamental analysis is a technique that attempts to determine a security’s value by focusing on underlying factors that affect a company's actual business and its future prospects. On a broader scope, you can perform fundamental analysis on industries or the economy as a whole. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements Fundamental analysis serves to answer questions, such as: • Is the company’s revenue growing? • Is it actually making a profit? • Is it in a strong-enough position to beat out its competitors in the future? • Is it able to repay its debts? • Is management trying to "cook the books"? The term fundamental analysis is used most often in the context of stocks, but we can perform fundamental analysis on any security, from a bond to a derivative. As long as we look at the economic fundamentals, we are doing fundamental analysis. For the purpose of this tutorial, fundamental analysis always is referred to in the context of stocks. Intrinsic Value of Fundamental Analysis: Intrinsic value is one of the primary assumptions of fundamental analysis is that the price on the stock market does not fully reflect a stock’s “real” value. In financial jargon, this true value is known as the intrinsic value. For example, let’s say that a company’s stock was trading at $20. After doing extensive homework on the company, we determine...
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...has cash to invest in inventory for growth. Finally, the amount of cash available to the company should ease investors' minds regarding the notes payable, as cash is plentiful to cover that future loan expense. Of course, not all cash flow statements look this healthy, or exhibit a positive cash flow. But a negative cash flow should not automatically raise a red flag without some further analysis. Sometimes, a negative cash flow is a result of a company's decision to expand its business at a certain point in time, which would be a good thing for the future. This is why analyzing changes in cash flow from one period to the next gives the investor a better idea of how the company is performing, and whether or not a company may be on the brink of bankruptcy or success. (For information on cash flow accounting, see Cash Flow On Steroids: Why Companies Cheat.) Tying the CFS with the Balance Sheet and Income Statement As we have already discussed, the cash flow statement is derived from the income statement and the balance sheet. Net earnings from the income statement is the figure from which the information on the CFS is deduced. As for the balance sheet, the net cash flow in the CFS from one year to the next should equal the increase or decrease of cash between the two consecutive balance sheets that apply to the period that the cash flow statement covers. (For example, if you are calculating a cash flow for the year 2000, the balance sheets from the years 1999 and 2000 should...
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...the Financial Crisis 1. Ratio Analysis The performance and the stability of banks can be quantified and measured through the analysis of their financial ratios. We can have several hundreds of ratios at our disposal. However, we will use only those that are common, and of some meaning for the analysis of the banks. Also, it is important to note that we should use only major and comparable ratios in order to fully understand the financial position of these banks as compared to all those ratios that may include some vagueness in the research. Mainly five categories of these financial ratios are used to eliminate the vagueness created by redundant use of the financial heads and items from the financial statements. Hence, the five categories are: (CFA 2009, p498): - Profitability Ratios - Activity Ratios - Liquidity Ratios - Solvency Ratios - Valuation Ratios However, for the banking industry, which is our main concern, we will use only the first four categories, making an exception of the Valuation category. The financial stability department of the State Bank of Pakistan, which is the central bank of this major economy in the Muslim world, and actively involved in the promotion of Islamic Banking, suggests that the financial ratios fairly reflect the stability, health and the performance of the banks. Hence, these ratios can be used for our purpose. 2. Z-score Instead of just doing the Financial Ratios Analysis, we should also do the analysis of the banks’ insolvency risk...
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...of the companies. 3. To compare the financial position of the two companies. Scope of the report: 1. Studying the pros and cons of the financial statements of a company, it is possible to predict the probable future growth of a company Methodology: Data were collected from Annual Reports of Square Pharmaceuticals Ltd. and Renata Pharmaceuticals Ltd. from the year 2003 to 2008. Three types of financial tools were used to analyze the data which are: 1. Horizontal Analysis 2. Vertical Analysis and 3. Ratio Analysis. LITERATURE REVIEW: Financial Analysis: The art of transforming data from financial statements into information that is useful for informed decision making is financial analysis. Financial analysis involves the use of various financial statements. These statements do several things. First the balance sheet summarizes the assets, liabilities and owners’ equity of a business at a moment in time usually the end of a year or a quarter. Next the income statement summarizes the revenue and expenses of the firm over a particular period of time, again usually a year or a quarter. Need for Comparative Analysis: Every item reported in a financial statement has significance. We know a company had a certain amount of cash on the balance sheet but we do not know whether the amount represents an increase over prior year or whether it is adequate in relation to the company’s need for cash. To obtain such information, we need to compare the amount of cash with other...
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...FINANCIAL ANALYSIS OF DELL AND HP Executive Summary 2 This financial analysis report examines two high profile competitors, Dell and Hewlett Packard (HP), within the computer/technology industry in order to evaluate company performance and financial health. Overall company strategies were reviewed and considered along with the financial analysis to come to a conclusion for recommendation of investment. The reports introduction gives an overview to the computer/technology industry and expands on the strategies executed by Dell and HP. The financial analysis covers both companies’ common-size income statements and balance sheets, comparative income statements and balance sheets, and various financial statement ratios such as liquidity, capital structure and solvency, return on investment, operating performance, asset utilization and market measures from year 2006 to year 2010. A pro forma look ahead estimated financial performance is generated for each company and assumptions explored that helped derive the financial data for the pro forma. Conclusions are drawn from the above stated financial analysis as well as areas for improvement and investment recommendations. Dell and HP are both well known companies competing in an ever evolving and expanding industry. The industry is in every segment from personal to educational to professional. HP is a more mature company having been founded in 1939, but Dell made waves throughout not only the computer/technology industry but in...
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...Introduction: Introduction: Doing this organizational analysis, I wanted to further my knowledge about the car industry. The first prospect that came to mind was General Motors. I picked General Motors because of its popularity in the United States. I had some interesting general knowledge of the company like the dependability and quality of their cars. Some comments were, “I rather have a Chevy Truck than a Ford” and “The general motors cars are more dependable than Ford.” These comments made it clear that I liked the General Motors auto line of cars. Then, I asked myself what would be a cooperate company just as enormous. I came to a conclusion that Ford would be the other company. Though Ford has a nice line of cars, I had some negative thoughts about the company. Acronyms were said such as, “Found On Road Dead” or “Fix Or Repair Daily.” Each of those sayings had put a dent in my thoughts that I would not buy a Ford, not solely on those sayings, but also because of the influence of my parents and other such adverse publicity. These companies have a long-standing tradition in the U.S as manufacturing giants in the automobile industry, since they began here. With these two cooperategiants, I can evaluate and compare both companies financially. My over all preference. was to buy the General Motors line of cars; in doing this project I wanted to know if by researching each company if I would change my mind. Also, this will enable me to draw a conclusion on which company would...
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...that is a deviation from our traditional offerings. The expansion presents two potential outcomes. Outcome one has a potential for profit, incremental growth, and additional market share for the company. Outcome two has a potential for financial loss, reputation or brand damage and reduced market share. We have analyzed our current assets, liabilities, revenues, operational expenses, and credit history in order to make realistic and informed decisions about the expansion. In addition, a clear understanding of the company’s current capabilities in regards to financing, marketing and production had to be ascertained in order to develop and recommend a course of action. The research and analysis that was conducted was showing a clear need for the new product line in the desired market and the financial portion of the analysis showed that the potential gains of venturing into the new product line outweigh the risk to the company’s finances and brand. The recommendation to proceed will be cautious but aggressive and in two phases. Phase one will involve small-scale implementation of all needed infrastructure for the new product line into the company’s current facilities and launch the product into a test market with prime factors. If the results from the small-scale implementation show upward gains and at least moderate growth potential then the risk for proceeding to phase two is warranted. Phase two involves building out the remaining infrastructure for the new product line...
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...| Dr. Pepper Snapple Group Inc | Financial Analysis | | Mahruf Rashid Ratul | Wilmington UniversityMBA - 7200Professor Bruce Martin05/03/2015 | | Abstract Carbonated soft drinks are a norm in our everyday lives. With so many brands out there sometimes it is difficult as a consumer to pick a favorite. However, as an investor one must be careful and perform a financial analysis of the company one wishes to invest in. This paper focuses on the financials of Dr. Pepper Snapple, a leading CSD brand in north America. A brief introduction of the company and its business operations is followed by detailed financial analysis. Income statement and balance sheet analysis explains the company's health while the cash flow gives a clearer picture of the firms activities. Ratio analysis provides a tool to judge the firm performance over time including against its competitors and the industry. Comparison to competitors and the industry is can also be done by stock price, EPS and beta analysis. In conclusion, DPS is a stable and healthy firm as it will be shown in this paper. Company Overview Dr Pepper Snapple Group, Inc. is a leading integrated brand owner, manufacturer and distributor of non-alcoholic beverages non carbonated beverages and carbonated soft drinks in the United States, Canada and Mexico. Its product line also includes ready-to-drink teas, juices, juice drinks, water and mixers. some of its famous brands in the US are Dr. pepper, Schweppes, Sunkist, Snapple...
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...AMITY INTERNATIONAL BUSINESS SCHOOL ANALYSIS AND VALUATION OF EQUITY SECURITIES OF TATA CONSULTANCY SERVICES , INFOSYS AND WIPRO LTD. SUBMITTED TO: SUBMITTED BY : Ms.Vibha Singh Atreya Vyas A1802011445 Section C MBA IB TABLE OF CONTENTS S.No | Topic | Page Number | 1 | Introduction | 3 | 2 | Research Methodolgy | 4 | 2.1 | Research Objectives | 5 | 2.2 | Proposed Literature Review and Tentative Hypothesis | 5 | 3 | Data Collection | 7 | 4 | About Companies and Research | 8 | 5 | Limitation of Study | 11 | 6 | References | 12 | 1) INTRODUCTION In today’s era every company needs cash or cash equivalents to run its day to day activities smoothly. The major sources through which companies can borrow money are: * Bank Loans * Debenture * Preference Share * Equity Share. Bank Loan is the amount which companies receive after fulfilling all the required information which is mandate according to the rules of banks. Companies need to mortgage its assets as guarantee for the future repayment of its loan amt. on the loan bank charge interest which company has to pay irrespective of the fact that company is in profit or loss. Debentures are the instruments which are used to acknowledge the receipt of the debt form the debenture holders. Debenture Holders are sought lenders for the company. They...
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...| 2. i. ii. | BALANCE SHEETBalance Sheet For Nestle (M) Berhad Ended December 2007 – 2011 Fig. 1 : Balance Sheet of Nestlé Malaysia Fig. 2 : The Movement of Total Equity & Liabilities from 2007 to 2011 for Nestlé Malaysia Balance Sheet Analysis | 5 6 7 7 | 3. i. ii. iii. | PROFIT and LOSSProfit and Loss For Nestle (M) Berhad Ended December 2007 – 2011 Fig. 3 : Profit and Loss5 years Statistic: Profit for the year attribute to Shareholder Fig. 4 : 5 years Statistic: Profit for the year attribute to ShareholderProfit and Loss Analysis | 7-8 8 8 9 | 4.i.ii. | CASH FLOW Cash Flow Statement Nestle (M) Berhad for the year ended 31 December (2007 – 2011) Fig. 5 : Cash Flow Statement Fig. 6 : Net Cash from Operations Increasing Cash Flow Analysis | 9 10-11 11 11-12 | 5. i. a. b. c. d. e. f. g. | PERFORMANCE ANALYSIS RATIOFinancial Ratio for Nestle (M) Berhad Fig. 7 : Financial Ratio Fig. 8 : Calculation of Financial Ratio Current ratio The Quick Ratio Fig. 9 : Current Ratio & Quick RatioCurrent and Quick Ratio AnalysisThe debt to Equity Ratio Fig. 10 : Debt RatioDebt Ratio Analysis Inventory Turnover Fig. 11 : Inventory TurnoverInventory Turnover AnalysisProfitability Ratios Return on Asset (ROA)Return on Equity (ROE)Fig. 12 : Profit MarginFig. 13 : ROA & ROEPerformance Analysis Ratio | 12-13 13 14 15 15 15...
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...Chapter One Introduction 1.1 Introduction Risk is inherent in all aspects of a commercial operation; however for Banks and financial institutions, credit risk is an essential factor that needs to be managed. Credit risk is the possibility that a borrower or counter party will fail to meet its obligations in accordance with agreed terms. Credit risk, therefore, arises from the bank’s dealings with or lending to corporates, individuals, and other banks or financial institutions. Credit Risk Grading is an important tool for credit risk management as it helps a Bank to understand various dimensions of risk involved in different credit transactions. The aggregation of such grading across the borrower, activities and the lines of business can provide better assessment of the quality of credit portfolio of a bank or a branch. The credit risk grading system is vital to take decisions both at the pre-sanction stage as well as post-sanction stage. At the pre-sanction stage, credit grading helps the sanctioning authority to decide whether to or not to lend, what should be the pricing for a particular exposure, what should be the exposure, what should be the appropriate credit facility, what the various facilities are and what are the various risk mitigation tools to put a cap on the risk level. At the post-sanction stage, the bank can decide about the depth of the review, periodicity of the grading, and other precautions to be taken. Having considered the significance and necessity...
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...1. Ststement of Problem Dell is anticipating growth of 50% in 1997 and expects to beat the industry growth forecast. With this in mind we need to analyse how best we can arrange funding to support this growth. 2. Statement of Facts and assumptions: A few facts - Dell has been successful in sustaining competitive advantage and maintaining profitability for the following reasons: 1. It maintains the lowest inventory of FGI and WIP as it makes computers only on order. 2. As a result of item 1) it has substantial cost savings in terms of low inventory stocking costs and the fact that it can adopt new technology a lot more rapidly with minimal wastage of redundant outdated stock. 3. Another advantage of manufacturing just in time computers (other than configuration flexibility to match customer needs) Dell could keep its working capital in check. As can be seen from exhibit 2 in the dells working capital financial ratio. There is a steady decline of "Days sales of inventory". 4. Dell has witnessed a growth of 52.4% in 95-96 and has a gross margin of 20.5 percent. Assumptions: 1. The gross margin on sales would continue to remain 20.5 percent. 2. Dell will continue to operate with same efficiencies in operation. 3. Inventory levels of wip and FGI will continue at 10 to 20 percent of sales. 4. The average CCC will be at 41 days. 5. AR remains at 14% of sales and AP at 9 percent of sales. 6. Cash and short term investment remains at 12...
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...Contents Table of Contents 1 1 Research Methodology 2 2 Restaurant Industry Analysis 2 Market Segmentation 4 3 Need Gap Analysis 5 3.1 Changing Lifestyles and Preferences 5 3.2 Increasing number of working female population 6 3.3 Growing tourism industry 8 3.4 Health conscious consumer segment 8 3.5 Increasing Nuclear Families 8 4 Innovativeness 9 4.1 Uniqueness 9 5 Advantages over Competitors 9 6 Implementation Strategy 10 6.1 Marketing Strategy 10 6.1.1 Web-based Marketing Strategy 10 6.2 Sales Strategy 11 6.2.1 Scalability and Sales Forecast 11 7 Personnel Plan 12 8 Financial Planning 13 8.1 Projected Cash Flow 13 8.2 Break-even Analysis 13 8.3 Projected Profit and Loss 14 8.4 Projected Balance Sheet 15 8.5 Business Ratios 16 1 Research Methodology “Exploratory” research has been conducted in order to study the Indian Restaurant sector and gather data necessary for chalking out a business plan for opening a QSR. Major portion of the findings and analysis are based on: * Literature review from multiple sources * Exhaustive Secondary research The workflow for the study/research has been outlined in the figure given below. 2 Restaurant Industry Analysis Restaurant market in India is growing fast due to the increasing number of people eating out. * Restaurant/Food service market in India has witnessed tremendous growth in recent years * With increasing number of people eating out the industry offers...
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...Business Analysis Part III Glennyce J Nelson MGT-521 June 29, 2012 Dr. Olivia Herriford Business Analysis Part III For part III of the Business Analysis project, a review of the strategic initiatives taken by The Walt Disney Company relative to organizational and operational adaptations to the changing markets. An explanation of how recent economic trends are influencing the company, strategies Disney has used or could use for adapting to the changing markets. In addition, tactics Disney has implemented or could implement to achieve their strategic goals, the role human resources management plays in helping them achieve the goals, and would I be willing to invest in this company as a mutual fund manager. How Recent Economic Trends Are Influencing Disney. Even though the economy has been in a recession for the past couple years The Walt Disney Company has been doing well and shown continued growth. The company continues to show signs of being a healthy company as indicated by their continued increase in their net income Nelson (2012) “Disney’s income for 2011 and 2010 was $4,807 and $3,963 respectively, which represents a 21.30% increase.” (p. 4). In addition, the company had a net income of $3,307 in 2009, which represents a 19.84% increase for 2010. As shown in Figure A, Disney has shown growth in all areas of its financial statements during the past three years. Over all the company has not been significantly effected by the current economic downtrun and has...
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