Homework: Financial Management
This homework involves researching your industry. Being able to understand the inner workings of an industry and company from an operations and strategic point of view is critical to your success as a financial executive.
Each student will choose to research top 3 companies within their industry by reading industry blogs/articles from sources such as Statista, Visualcapitalist, CNBC, MarketWatch, WSJ, SeekingAlpha, Barron's, The Economist, Zero Hedge and Marketfolly.
Students will use MorningStar to gather metrics/key ratios:
Replace ‘KO' with your stock symbol
I. Profitability (OM, NM, ROE, ROIC)
i. Do margins seem high for the industry as a whole?
ii. Analyze the profitability trends. Increasing or decreasing, why?
iii. Which company seems to be the most profitable and why?
II. Growth (Rev, OI, NI, OCF)
i. Do the companies have higher growth rates relative to market/GDP?
ii. Analyze the growth trends. Increasing or decreasing, why?
iii. Which company seems to have the most potential and why?
III. Financial Health (CR, QR, FL, D/E)
i. Does the industry have high overall risk and leverage?
ii. Analyze the leverage trends. Increasing or decreasing, why?
iii. Which company seem to be the riskiest and why?
IV. Efficiency (DSO, DSI, FAT, AT)
i. Which metrics seems most important for your industry?
ii. Analyze the efficiency trends. Increasing or decreasing, why?
iii. Which company seems to be the most efficient and why?
Valuation (P/E, P/B, P/S, P/CF vs Industry vs SP500)
i. Do the valuation ratios seem high relative to history and the SP500?
ii. Analyze the valuation trends.
iii. Which companies do you think are the cheapest and most expensive?
Format your homework according to the following formatting requirements:
i) The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
ii) The response also includes a cover page containing the title of the homework, the student's name, the course title, and the date. The cover page is not included in the required page length.
iii) Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.