Assignment 8

User Generated

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Business Finance

Description

Imagine that you are a financial manager researching investments for your client. Use the Strayer University library, located at https://research.strayer.edu to research the stock of any U.S. publicly traded company that you may consider as an investment opportunity for your client. Your investment should align with your client’s investment goals. (Note: Please ensure that you are able to find enough information about this company in order to complete this assignment. You will create an appendix, in which you will insert related information.)

The assignment covers the following topics:

  • Rationale for choosing the company in which to invest
  • Ratio analysis
  • Stock price analysis
  • Recommendations

Refer to the following resources to assist with completing your assignment:

Stock Selection

Market and Company Information

  • U.S. Securities and Exchange Commission – “Market Structure
  • Yahoo! Finance
  • Mergent Online (Note: This resource is also available through the Strayer Learning Resource Center.)
  • Seeking Alpha (Note: Also available through the Android or iTunes App store.)
  • Morningstar (Note: You can create a no-cost Basic Access account.)
  • Research Hub, located in the left menu of your course in Blackboard.

Write a ten to fifteen (10-15) page paper in which you:

  1. Provide a rationale for the stock that you selected, indicating the significant economic, financial, and other factors that led you to consider this stock.
  2. Suggest the primary reasons why the selected stock is a suitable investment for your client. Include a description of your client’s profile.
  3. Select any five (5) financial ratios that you have learned about in the text. Analyze the past three (3) years of the selected financial ratios for the company; you may obtain this information from the company’s financial statements. Determine the company’s financial health. (Note:Suggested ratios include, but are not limited to, current ratio, quick ratio, earnings per share, and price earnings ratio.)
  4. Based on your financial review, determine the risk level of the stock from your investor’s point of view. Indicate key strategies that you may use in order to minimize these perceived risks.
  5. Provide your recommendations of this stock as an investment opportunity. Support your rationale with resources, such as peer-reviewed articles, material from the Strayer Learning Resource Center, and reviews by market analysts.
  6. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia and other similar websites do not qualify as academic resources.

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Explanation & Answer

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Attached.

Running head: ASSIGNMENT 8

1

Assignment 8

Student’s Name

Institutional Affiliation

Instructor

Date

ASSIGNMENT 8

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Assignment 8

Introduction

As a financial manager researching in investments for my client in any of the United
States publicly traded companies, I would select Coca-Cola Company for the client. This is
because the company is considered to be among the most profitable and prosperous brand in the
United States. This article looks into the rationales for selecting Coca-Cola Company, indicating
the significant financial, economic, and other factors that enable the consideration of the brand.
Other areas of discussion include the primary reasons why the selected stock is a suitable
investment for the client, and five financial ratios of the company focusing on the past three
years, and risk levels of the capital. Also, the paper will provide recommendations for the CocaCola Company as an investment opportunity.

The rationale for Selecting Coca-Cola Company

Coca-Cola is considered the best company for investment purposes because of several
reasons. Coca-Cola Company has many branches all over the world distributed in almost all the
continents. Therefore, it is one of the most successful brands in the world, and it is being
celebrated globally. According to Butler & Tischler (2015), Coca-Cola Company established its
branches in almost 200 countries worldwide. The company can account for more than 1.8 billion
refreshment items sold in the overall market. Besides, the company has the dominant world
market share of approximately 60% in soft drink trading.

ASSIGNMENT 8

3

Considering the 5-year financial report for Coca-Cola Company, it is apparent that the
brand's financial performance has been rising consistently for the past five years. Therefore,
putting this factor into consideration, I would recommend the company for the client as the best
brand to invest in. The table below shows the summary of financial performance for Coca-Cola
Company for the past five years from 2013 (Butler & Tischler, 2015). According to the data as
presented in the tables, the sales in dollars in 2012 is $48.02 billion. The amount is much higher
than the sales in 2009 which was $ 30.99 billion. Also, in the year 2013, the sales were $46.85
billion while in the year 2011 it was $ 46.54 billion.

A table is showing financial performance for Coca-Cola Company from 2009 to 2013 (Butler &
Tischler, 2015).

Coca-Cola 5-YEAR SUMMARY
Sales in Billion

EBIT in

Total Net Income

Earnings per share in Billion

dollars

Billion dollars

in Billion dollars

dollars

Year

2013

46.85

11.48

8.58

1.9

2012

48.02

11.81

9.02

1.97

2011

46.54

11.44

8.57

1.85

2010

35.12

14.24

11.81

2.53

2009

30.99

8.95

6.82

1.47

ASSIGNMENT 8

4

The stock value for the Coca-Cola Company showed positive growth from the year 2009
through 2013. The positive growth of the stock values can be another good reason for the
investor to pump his money into the company. Therefore, this is another reason I woul...


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