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For the second milestone due , you will first complete the Company and Market Analysis portion of your project. Using historic and quantitative data, you will |
provide a brief discussion of the absolute and relative performance of the companies listed below in each sheet in terms of industry trends. Next, with |
your completed company and market analysis in mind, you will begin to construct an investment portfolio that includes a consideration of assets, securities, and |
rates of return for each of the companies that you will be including in the portfolio. |
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Prompt:Referring to the microeconomic and quantitative data that you have gathered and analyzed, in a 2- to 3-page paper, first briefly discuss each company’s |
stocks and bonds (both corporate and government) for absolute and relative investment performance with regard to industry trends. |
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Next, with your company and market analysis in mind, begin to construct an investment portfolio that includes a consideration of assets, securities, and rates of |
return for each of the companies that you will be including in the portfolio. |
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Specifically, the following critical elements must be addressed:
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I.
Company and Market Analysis: In this section, you will analyze the company and its position in the financial markets. |
A. Industry Trends |
i. Compile historic industry microeconomic data from database research for relative comparisons and inputs into asset valuation models. |
ii. Analyze quantitative data across sectors and industries to measure absolute and relative performance. |
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II.
Portfolio: With your company and market analysis in mind, construct a complete portfolio that includes the following: |
B. Asset |
i. Explain the inclusion of specific asset classes for the portfolio, considering the portfolio’s risk/return trade-offs and the company’s investment objectives. |
ii. Apply the asset allocation weightings across asset classes, sectors, and industries. |
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B. Securities |
i. Analyze the company’s historical revenue and earnings growth in order to demonstrate a comparison to that of peers in the industry. |
ii. Determine the intrinsic value of assets utilizing the asset valuation models. |
C. Rates of Return |
i. Analyze the assets’ historical risk and rates of return, utilizing a comparison of the assets’ rates of return to similar securities or benchmarks for support. |
ii. Calculate required rates of return, utilizing various asset valuation models (e.g., stock valuation models, bond valuation models, real estate valuation models, etc.). |
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Apple (AAPL) Stock
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2016
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2017
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2018
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2019
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2020
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2021
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Revenues
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215639 |
224265 |
233235 |
242565 |
252267 |
262358 |
Cost of Goods Sold |
131376 |
156985 |
163265 |
169795 |
176587 |
183650 |
Selling, General & Administrative Expenses |
14194 |
38125 |
39650 |
41236 |
41624 |
43289 |
Research and development |
10045 |
0 |
0 |
0 |
0 |
0 |
Operating Income |
60024 |
29154 |
30321 |
31533 |
34056 |
35418 |
Net Interest Expenditure |
-1348 |
0 |
0 |
0 |
0 |
0 |
Pre-Tax Income |
61372 |
29154 |
30321 |
31533 |
34056 |
35418 |
Taxes |
15685 |
8746 |
9096 |
9460 |
10217 |
10625 |
Net Income |
45687 |
20408 |
21224 |
22073 |
23839 |
24793 |
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Earnings Per Share |
8.31 |
3.83 |
4.12 |
4.43 |
4.95 |
5.34 |
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Shares Outstanding |
5500 |
5328 |
5156 |
4984 |
4812 |
4640 |
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Apple (AAPL) Bond
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Firm
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Ind Avg
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Debt & Coverage Ratios
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Debt/Assets |
0.60 |
0.50 |
Debt/Equity |
0.60 |
0.50 |
Current Assets/Current Liability |
1.35 |
1.77 |
EBITDA/Interest |
42.95 |
49.50 |
Debt/EBITDA |
2.64 |
2.27 |
Cash Flow Ops/Total Debt |
0.34 |
0.19 |
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