Assignment
This is a group project, here is the project outline, my part is What is your opinion on financial status of your firm? Does it look good financially and operationally (you just need do this part), I highlight my part in the outline. We choose public firm was COSTCO
My part requires: do not need work cited or reference. 2 pages, times new roman, double space, 1-inch margin.
Outline:
In this assignment, we want to develop abilities to analyze financial statements, stock and bond valuation, and WACC. To handle this assignment, you and your team members are supposed to select a public firm and then collect relevant financial information from yahoo finance or other source (e.g. website of MorningStar) for your analyses.
Using collected information, you need to do:
1. Financial statement analysis
1) Balance sheet and income statement during the last three years.
2) Ratio analysis during the last three years.
3) Free cash flow of your firm and its competitor during the last two years.
4) What is your opinion on financial status of your firm? Does it look good financially and operationally?
2. Stock valuation
1) After downloading daily stock prices of your firm, its competitor, and S&P 500 during the last one year, then estimate correlations among them.
2) Calculate betas of your firm and its competitor.
3) Calculate an expected return of your firm and its competitor, using CAPM (Capital Asset Pricing Model). Then evaluate its stock price with Dividend models. If the firm does not have dividend information, you may need to set up your own reasonable assumptions for dividend payments.
4) How do you think about current stock prices of your firm and its competitor? Are they undervalued or overvalued?
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.