BUS 120 Grossmont Community College Investment Decision Report

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BUS 120

grossmont Community College

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project is due on June 7th but would like it to be done before the 6th. Pick a company of your choice.

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M McGraw Hill - Login S Ask a new question - Stx C In Preparing A Com In - Grossmont Cu X Annual Report ProjectX com/courses/37153/assignments/782565?module_item_id=1661842 Overview: 1 1 You will pick a publicly traded company that is traded on the New York Stock Exchange (NYSE), NASDAQ, or the S&P 500. It is required that you pick a company that is on Fortune's list of "Top 100 companies to work for". ub You will function as an investment advisory firm. Once you have selected your company and been approved, you will begin an in-depth analysis of the company. The analysis will be comprised of several elements, such as the company's most recent financial statements, as well as learning all you can about the company in terms of products, success within its industry, and any current news that would be relevant to an investor. In your financial analysis, you should be looking at such things as revenue, net income, cash, etc. It should include ratio analysis on the financial statements. See Chapter 13 of your textbook for a list of ratios and be sure to include several of each category: Liquidity, Profitability, Solvency, and Market Prospects. Also remember that there is more in-depth coverage of many ratios in the chapters themselves. Use the Glossary to help you find where a particular ratio has been discussed in the text. You will also take into account other factors that would influence your decision whether or not to recommend purchase of this stock. Some items in this category might include a new product or service, recent cost cutting moves, or consolidation or merger with another company. Finding this information will be part of your research for the project. While conducting your research, you will be tracking the price movement of the stock as well as other relevant information about the company's situation so as to better explain your positions in your final report. Requirements: You will be required to submit a final report written assessment of the company you chose must be a minimum of three pages, a maximum of five. All summaries and written assessments must be type-written using MS Word or comparable software, no more than double-spaced with margins of no more than one О. Sign in - Grossmont Cu X Annual Report Project | X S Ask a new question - St X M McGraw Hill - Login In Preparing A are.com/courses/37153/assignments/782565?module_item_id=1661842 BUS-120-3706 > Assignments > Annual Report Project Instructions and Assignment Link Annual Report Project Instructions and As- signment Link Start Assignment ES Submitting a file upload Due Jun 7 by 11:59pm Points 100 File Types doc, xls, xlsx, docx, and pdf Financial Accounting Spring 2021 100 points - due June 7th Overview: rse 1 You will pick a publicly traded company that is traded on the New York Stock Exchange (NYSE), NASDAQ, or the S&P 500. It is required that you pick a company that is on Fortune's list of "Top 100 companies to work for". oport Hub You will function as an investment advisory firm. Once you have selected your company and been approved, you will begin an in-depth analysis of the company. The analysis will be comprised of several elements, such as the company's most recent financial statements, as well as learning all you can about the company in terms of products, success within its industry, and any current news that would be relevant to an investor. In your financial analysis, you should be looking at such things as revenue, net income, cash. etc. It should include ratio analysis on the financial statements. See Chapter 13 of your textbook for a list of ratios and be sure to include several of each category: Liquidity, Prontability, Solvency and Market S Ask a new question-S X M McGraw Hill - Login X * In Preparing A Com Sign In - Grossmont Cu X Annual Report Project IX ure.com/courses/37153/assignments/782565?module_item_id=1661842 Requirements: You will be required to submit a final report written assessment of the company you chose must be a minimum of three pages, a maximum of five. All summaries and written assessments must be type-written using MS Word or comparable software, no more than double-spaced with margins of no more than one inch. In the final report assessment, you will support your reasons for either recommending or not recommending investing in this company by performing financial statement analysis, ratio analysis, and other contributing market factors as outlined above. The more detail and depth that you include in your analysis presents, the better. You must provide documentation of the company's financial information, i.e. a copy of their most recent financials (Income Statement, Balance Sheet, and Statement of Cash Flows) available in their annual report or their 10K. To find the financial statements of your company, go to their website, click on Investor Relations (or some other similar link), and download the most recent Annual Report or 10K. I expect you to do a good job of explaining your position. I will not tell you how to do the project as I want you to develop your own best methods. I will act as a resource and a sounding board for suggestions and ideas. Project Grading: Your project will be graded on completeness, correctness, creativity, and the quality of presentation. I will be available to answer questions and provide some guidance, but the goal is for you to use your talents and imagination to figure out the best methods to accomplish the objectives of this project. Your project should include, but is not limited to, the following: 1. Recent financial statements (see above) 2. Success in their industry 3. Current news S Ask a new question - St X C In Preparing A Annual Report Project X M McGraw Hill - Login Sign In - Grossmont Cu X ucture.com/courses/37153/assignments/782565?module_item_id=1661842 you wu ucvtiop your minnasticmous. I will act as a csource and a sounn6 Dodiu Ion S066C>LIONS anu ideas. Project Grading: Your project will be graded on completeness, correctness, creativity, and the quality of presentation. I will be available to answer questions and provide some guidance, but the goal is for you to use your talents and imagination to figure out the best methods to accomplish the objectives of this project. Your project should include, but is not limited to, the following: 1. Recent financial statements (see above) 2. Success in their industry 3. Current news 4. Ratio analysis (see Chapter 13) 5. New products/service, cost cutting moves, consolidation or mergers? 6. Tracking & analysis of stock price (I suggest using Excel) 7. Professional appearance (cover sheet, no misspellings/grammatical errors) Project Timeline: 1. Project information distributed: Week of April 25th 2. Company picks: Week of May 2nd 3. Final written report submitted: June 7th Key Resources: Chapter 13 of your textbook - Financial Statement Analysis http://finance.yahoo.com Www.fool.com 2
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Submission date: 30-May-2021 01:28AM (UTC-0700)
Submission ID: 1596959184
File name: INVESTMENT_DECISION.docx (455.81K)
Word count: 1338
Character count: 7137

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Running Head: INVESTMENT DECISION

1

INVESTMENT DECISION
Name:
Institution:
Date:

INVESTMENT

2

INTRODUCTION
Amazon Plc is a multinational logistics company that is listed in the NYSE (New York
Stock Exchange), its currently trading at 3224.680 with the Ticker Symbol AMZN. The
company was originally founded as an online bookstore and was later revolutionised to be a
logistics company. It was one of the most successful and profitable business in the United
States of America this is according to Forbes list 2020. Jeff Bezos who is the Chief Executive
Officer is one of the richest man on earth (Forbes, 2020) this is because of the revenue that is
generated from Amazon. Amazon owns several assets together with other smaller businesses
this makes the preparation of its financial statements a bit complicated. Their Accountants
together with independent auditors have to make consolidated financial statements that will
cover all the assets together with the subsidiaries and company associates.
Based on the financial statements that have been provided, we will be able to evaluate
an in-depth analysis of the company by looking at the financial ratios that will be evaluated
from the consolidated income statement, statement of financial position, and the consolidated
cash flow statement. The statement will enable us to work out the profitability ratios, this will
help us to see if the company is more profitable and if it is worth investing. The liquidity ratio
that will be evaluated from the same will show how liquid that company is or rather how
effectively it will meet its current liabilities in case of liquidation. The other ratio is the asset
management ratio, these ratios will explain how effectively the company manages its assets
and how the assets are used to generate revenue to the company. In order to recommend an
investment in the company, the ratios must agree to a certain threshold that we will look at after
the analysis.

INVESTMENT

3

Investment Decision Using Financial Statements
We used the financial statements for 2019 because the operation of the business in 2020
and 2021 were affected by the global (Coronavirus Pandemic). The 2019 financial statements
will give us a clear cut experience or rather information on how the company is performing.
We will use 2018 financial statements as the base analysis, this will help us compare between
the two years how the company has grown. By doing this we will get a clear forecast on what
we will expect in the next 5 to 10 years.
Profitability Ratio
Reviewing the financial statements we can see that the return on assets (ROA) as per
the financial year ended 2019, the company was able to associate or rather attribute six percent
(6%) of the profits to the assets that it has, (Klaus, 2013). With revolution and the bid to
improve the profit margins, Amazon needs to increase the percentage on this ratio to about
15%, this will be done by undertaking some of the risks that we have recapitulated or rather
discussed from the strategic alternatives assessment. This can be done efficiently by increasing
the net income and liquidating the fixed assets to current assets.
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒

𝑅𝑂𝐴 = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
The return on assets of Amazon for the financial year ended 2019 is;
13,180,000

𝑅𝑂𝐴 = 225,248,000 = 0.05851

The reinvestment, diversification, and expansion of the shareholder's equity can be
associated and classified under the value enhancement umbrella. Although this should be
carefully done with the help of calculated risk from both the finance department and the risk
mitigation departments. As evaluated before in the return on investments, twenty-one percent
(21%) of Amazon's profits were attributed to the shareholder's equity. To improve this figure,
the company should be able to diversify its assets and venture into moderate risk investments.
𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒

𝑅𝑂𝐸 = 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟 ′ 𝑠𝐸𝑞𝑢𝑖𝑡𝑦
𝑅𝑂𝐸 =

13,180,000
62,060,000

= 0.2123 = 21.23%

This was as per the financial year ended in 2019.

INVESTMENT

4

Liquidity Ratio
The liquidation of assets should also be done by Amazon and as stated earlier on, it will
improve or rather increase the return on assets by generating income from other medium-term
ventures. This can be backed up by the low level of the liquidity ratios that were presented by
Amazon in the financial year ended in 2019. They had a current ratio of $ 1.097, which meant
that for a dollar that the company (Amazon) owes, it has $ 1.097 to pay it off.
In general, this means that the dollar that the company borrowed has in turn generated
$ 0.097 as an interest. This is a low margin and the company should be able to liquidate more
assets in the bid to increase the current ratio or r...


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Just what I was looking for! Super helpful.

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