Part 1: Financial Performance and Current Issues
In this section, students are expected to meet these objectives:
1) Evaluate the company’s overall financial performance by analysing the company’s share price performance, financial statements and other relevant news during the last five years. (Aisha)
Price movement
· look for three major sensitive public announcements and the effect of these announcements on the company’s share price
· technical analysis (50-day vs 200-day moving average lines) to identify buy/sell/hold signals
2) Peer group comparison/industry analysis (compare a minimum of five financial ratios of FXL with competitors) (Aisha)
· you can get the ratios from Eikon/DatAnalysis
· you can select the most relevant ratios for your analysis.
3) Analyse the company’s/industry’s current issues and explain the effect of these issues on the company’s future earnings (you can consider a SWOT and PORTER or PESTEL analysis) (Aisha)
1. At the Macro Level - Global and Domestic
· General factors that apply for the industry (GDP, employment, growth of the industry, regulation, etc.)
2. At the Micro Level
· The company-specific requirements (operation, level of debt, objectives, competition, etc.
4) Estimate the ROE of the company for the most recent five years using the DuPont ROE approach. (Aisha)
· DuPont Analysis can be done using the 3-step procedure
o 3 steps: Profit Margin, Total Asset Turnover and Financial Leverage
· Show your own calculations of each component, using numbers from financial statements
Compare the individual component of DuPont ratios of FXL with its industry peer group companies