Overview
Spartacus, here is what I need on Competency 1. Although I will also share with you the assignments directions, please focus on this below. The Fortune 100 company will be Vorwerk International
Competency 1 Assessment: This assessment is not difficult, but will take time. Use Yahoo Finance and choose a US based firm. Make sure you are using the CLASSIC version. You can confirm this by looking in the upper right hand corner for the green bar that states "TRY THE NEW YAHOO!FINANCE". That is how you know you are on the classic site. If you are on the beta version, you will see a black bar that says "BACK TO CLASSIC YAHOO! FINANCE". Again, you want to use the CLASSIC VERSION.
Part 1 - Key Indicators: You must provide answers for all 28 key indicators for your company (bullets may include more than one indicator). Use current figures unless otherwise required. You do not need to purchase a trial subscription for Yahoo Finance. All answers can be found on the site at no charge. Most of the key indicator figures are found under the summary tab (your firm’s main page), but you may need to use other tabs (historical, financials, analysis, etc). Please see my location notes below. Your answers must be clearly stated. If you add a screenshot, make sure you highlight the indicator. You only need to include the answers for this portion of the assignment. No discussions or explanations are required for the key indicators section of this assignment. Simply state the answers correctly. There are points for accuracy.
Location Notes: Go to your firm’s main Yahoo Finance page (this will be the Summary tab). The location of these indicators is as follows:
*The company and its ticker symbol: Summary Tab
*Cash flow from operations: Click the Financials tab and the blue Cash Flow link. You are looking for the TTM figure for Cash Flow from Operations. You need ONE figure. Make sure to add 3 zeros to this figure or include the statement that it is posted "in thousands".
*Price-to-earnings ratio: Summary Tab - You need ONE figure.
*Stock dividends and the yield: Summary Tab - You need TWO figures.
*Earnings per share ratio: Summary Tab - You need ONE figure.
*Revenue estimates for the next 12 months: Click the Analysis tab. Look towards the middle of the page for the Revenue Estimate section. You are looking for the Low, Ave and High Revenue Estimates for the NEXT year (far right column). You need THREE figures.
*Revenue from the previous 3 years: Click on the Financials tab and the blue Income Statement link. This will bring up all of your revenues. You need THREE figures. Make sure you add 3 zeros to each figure or include a statement that all figures are posted "in thousands".
*Statement of cash flows and identify net cash from operating, investing, and financing activities over the past 3 years: Click on the Financials tab and the blue Cash Flows link. This will bring up all of your cash flows. You need NINE figures. Make sure to add 3 zeros to each figure or include a statement that all figures are posted "in thousands".
*Average trade volume: Summary Tab - You need ONE figure.
*The current stock price, the 52-week high (not the range, just the high), and 1-year estimated stock price: Summary Tab - You need THREE figures for this requirement.
*Analysts’ recommendations for the stock (buy, sell, or hold): Summary Tab – Look towards the bottom right of the page UNDER the colorful bar chart for the Recommendation Rating. State the figure and whether it is closer to a buy, sell or hold. OR, you can simply take a screenshot of that graphic and paste it to your slide. Make sure you are on the CLASSIC VERSION as you are looking for the RECOMMENDATION RATING which is under the recommendation trends chart on the lower right of the page (scroll down).
*Market cap for the company: Summary Tab - You need ONE figure.
Part 2 - Discussions: Next, you have four specific discussion slides that are required. Discussions should be substantial (min 4-5 sentences), include validation (facts and figures), and answer the questions completely. Use complete sentences.
1-Stock vs PE ratio: Define PE and what it measures. State the general formula (no calculations are required). What does a high PE tell us about the value of the stock (over or undervalued)? What does a low PE tell us about the value of the stock (over or undervalued)? Is your firm over, under or fairly valued and why? HINT: Yahoo calculates fair value of the stock on the basis of growth rate, which is normally posted under the Ave Volume figure on your firm's main page. If this information is not there, look under the STATISTICS tab as this information is based upon PE/Growth or PEG. A PEG between 1-2 is fair value. A PEG >2 is overvalued and a PEG of <1 is undervalued.
2-Market Cap: Define market cap and what it measures. State the general formula (no calculations are required). How is it used as a tool to measure risk as it relates to the size of the firm? What are the size criteria used to define firms as it relates to market cap? Is a larger firm preferred, why or why not?
3-Trends in stock price, dividends and stockholders equity: Copy and paste the table below to your slide and then include the discussion within the notes. Fill in the details. State a time frame (ie last 2 or 3 years). All indicators must use the same time frame, so choose year-end dates for your firm (based upon your equity dates - so fill those in first). State the beginning figures, ending figures, % change and the reason for trend over that time period for EACH indicator (stock price, dividends and stockholders equity). For stockholder's equity, click the Financials tab, the blue Balance Sheet link and the Total Equity Gross Minority arrow. This will open up your stockholder's equity figures. Make sure to add 3 zeros to the equity figures or include a statement that they are posted "in thousands" next to the word "Equity". Use the historical tab for the stock price and dividends. For stock price, use the ADJUSTED close prices for each date. For dividends, use the dividends paid RIGHT AFTER those dates. To calculate % change = (End Figure-Beg Figure)/Beg Figure and move the decimal point to the right two spaces to convert from decimal to %. For the discussion, set the foundation first. What occurred as to recent events/market conditions over your time period? How did this affect your firm? How did this affect demand? Once you set this foundatin, then you can discuss the % change figures and the reasons for those increases/decreases based upon demand, profits and cash flow. 😉
Stock Price | Dividends | Equity (in thousands) | |
Beginning Figure | |||
Ending Figure | |||
% Change |
4-Your overall recommendation based upon your research. You must tell me whether or not you recommend the stock. Then, choose 5-6 key indicators from above that support your recommendation (with the exception of analysts recommendation as their opinion does not matter on this slide - you are the analyst). State the indicator, the figure and how it supports your recommendation. Numerical justification is required on this slide. Only use information from this presentation. Keep the justification brief, but factual and concise.
Materials
Textbook
Brealey, R., Myers, S. C., & Marcus, A. J. (2023). Fundamentals of corporate finance (11th ed.). McGraw-Hill Education.
Tools
McGraw-Hill Connect