Assignment: Portfolio Theory and Asset Pricing Models
For this activity, you assume the role of chief investment officer for a boutique investment company. Your investment firm is considering acquiring a stake in either Apple, Inc. or HP. The goal of the Comparative Company Financial Analysis is for you to do a financial analysis of the two publicly traded corporations and make a recommendation regarding investing in either of the two corporations.
The key question that must be answered is: should the company acquire a stake in either of the two companies, and if so, which one is the more attractive option?
Your financial analysis report will be driven by a rigorous financial statement analysis and supplemented with your written analysis, interpretation, and evaluation of the data.
Your research should be strategically driven by the probing question:
Would you invest your financial capital in the selected firm as a shareholder?
The steps in preparation of financial analysis report include the following:
Obtain the balance sheet, income statement, and statement of cash flows for the past 2 years for both Apple, Inc, and HP. Download or read the firms' annual report.
Conduct a comparative analysis, focusing on liquidity, profitability and debt. You have wide discretion in how to structure your analysis and final report. However, your comments should be supported by specific data, outlined using tables and / or charts. The purpose of your analysis is to recommend investment in either of the two companies or in none.
The table below can be used and modified as needed. It is only offered as an illustration.
Company Liquidity Metrics Profitability Metrics Debt Metrics
Apple
HP
Choose the key financial information that can help you illustrate the difference between the two companies, under each of the three categories.
To validate your research, 2 years of data should be analyzed. All the information needed can be located in the companies' latest annual report or by accessing Yahoo Finance and looking up each company's financial information.
The financial analysis report must be written properly. It must include a title page, a table of contents, and a reference page. For the final report, information sources from the web, etc. must be cited properly, using APA style. This means that every table that you cut and pasted or typed from the web must have a source at the bottom of the table AND that citing must also be included in a reference page at the end of the report.
Assignment Outcomes
Analyze the most effective strategies to manage organizational finances.
Explain why analysis of financial data is critical for effective decision making.
Practice ethical behavior in regard to information and information technology.
Exchange of contact information is not allowed. We block teachers that violate this policy
(2010). Publication manual of the American psychological association. (6th edition). American Psychological Association.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.