The Corporate Finance assignment
For a company, comparative performance (against peers) may be as important, as performance measured using financial accounting and externally reported. Comprehensive business analysis, including robust market analysis and newsgathering represents a basis on which on a daily level millions of shares, representing billions of Euro's and Dollars, are being traded all around the world. In this assignment we are going to look at 2 electronics manufacturers: Apple and Samsung. You need to provide comparative business analysis of two personal electronics manufactures. This analysis should include: business strategy analysis, financial analysis and prospective analysis (as a basis for valuation). Companies need to be compared, and you need to provide and explain your opinion and advice on these 2 companies, both from equity (for instance shareholders or other investors), debt perspective (for instance a rating agency like Standards & Poors, Moody's or Fitch) and management perspective (to enable the improvement of performance).
1. Objective
The objective of this assignment to transfer knowledge into practice. In this modules corporate finance students will experience team-wise practice based research to work out a research assignment in a thesis-like way. Each team has to deliver a client presentation to the board of directors, acted by the lecturers, a defence session and an underpinning report. For the agency partner meeting a team evaluation report discussing the team dynamics and an individual reflection report in which the progress of the learning objectives will be evaluated. This is called the practice driven pathway and orientation on the Standard for hbo-Masters. Students will deliver professional products individually per specific competency.
For the comparison of Apple and Samsung all currently, publically available data can and should be used. Hint: You may have noticed Volkswagen being in the news quite frequently the last few days. The advice that you give, as a result of your analysis, should have two indicated perspectives: equity (shareholders or other investors) and debt perspective. More precisely, you would need to present an advice (supported by your analysis) which company represents a better investment.
Business analysis should also enable a company to better understand drivers of its performance and work further on its improvement. This means that there is also a third perspective of the analysis - management perspective, to help companies manage their performance. Therefore, you are also invited, for one of the companies that comparatively represents a better investment, to suggest the design of the strategic performance measurement system to track and manage the performance of the company (financial, but also market, innovation, corporate social responsibility performance, etc.) to ensure that ultimately the value is created for shareholders. For this part of the assignment you need to use the knowledge and understanding of: company's mission, vision, strategy, strategic goals and value proposition; as well as key success factors of the industry, in order to: propose relevant performance dimensions, performance goals, possible performance indicators and initiatives that would lead to the improvement of performance and increase in the value for shareholders.
2. Test criteria
We work in groups of 4 students. Each student must be individually graded on his/her part in the group performance. Groups are divided in two students who deal with the past and two who cover the future perspective. Each student needs to add an individual (critical) self-reflection paragraph in the appendix of the assignment. Everyone needs to contribute to the final presentation during the last session.
The assignment needs to meet the following criteria:
A report written following the Master Thesis Manual (2015-2016): (Approximately 4,000 words) not including executive summary, appendices & bibliography:
It must include the following elements:
- Business strategy analysis
- Financial analysis
- Prospective analysis (Valuation)
- Strategic performance measurement system
- Conclusion / recommendation
3. Assessment procedure
You must use in your data analysis recent financial statements found for Apple and Samsung as a basis but you are further required to use also data you can find on the industry where these 2 companies reside in, the more recent of course the better. Also all news facts since the publication of the financial statements and their possible effects on for example stock price and debt rating should be included.
You must conduct desk research about the country(ies) the manufacturers operate in, the industry, and market conditions and further relevant global macro-economic circumstances which may be applicable. To do this you will need to use what you have learned in previous courses.
It is your challenge to develop a written report in which the two manufacturers are compared and analysed and in which you rate the companies in relationship to each other and the market in which they operate. In that sense you need to consider taking multiple points of view as your evidence underlying your judgment (and at minimum the equity and debt perspective).