Equities And Investment Analysis
1. Using Porter’s 5 Force Model analyse competitive position of your firms within the industry.
2. Collect last 5 years annual financial statements of the companies you are analysing. Investigate the trend in various financial ratios of these firms. Analyse and interpret liquidity ratios, solvency ratios, asset utilisation and profitability ratios of these companies. Don’t just write text book definitions of these ratios; interpret the ratios in the context of the industry and economic condition. Based on your groups analysis comment on the financial health of the firms.(Excel workings + 1000 words, 5 marks)
3. Using Dividend Discounting Model (DDM), estimate the current intrinsic value of the firms. Explain how you estimate required rate of return (for example, you may assume historical average industry return as required return from the firm or you may use historical information as well your understanding of current and future market condition to estimate the required rate of return for the firms, or you may use any other financial theories etc. that you know) Clearly mention all assumptions and give details of your workings.(Excel workings + 500 words, 5 Marks)
4. Based on your groups analysis give BUY or SELL recommendation as on 3rd of September 2012. (2 Marks)
5. Overall presentation and comprehensiveness. (3 marks)