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Explain the background of the mentioned topic, using appropriate references. Clearly explain the objectives of your case study. This should include the details of which types of performance and risk you choose to study.

March 3, 2020/in Finance /by Donald

6FNCE001W Banking Theory and Practice 2019-20Individual Coursework

To be submitted before 1pm on Thursday, 19^th March 2020

The assignment is a case study. The length of the essay is 1000 words (+/- 10%) excluding cover page, table of contents, abstract, references and appendices.

Required:

Conduct a case study on how Brexit and uncertainty of Brexit plan have affected a chosen UK commercial bank so far, in the context of performance and risk level. Your case study needs to include the following elements:

Explain the background of the mentioned topic, using appropriate references.
Clearly explain the objectives of your case study. This should include the details of which types of performance and risk you choose to study.
Collect financial data of your chosen UK commercial bank from a reliable source.
Carefully evaluate financial ratios/measures which meet the objectives of the case study.
Analysis the financial ratios/measures, with the support of appropriate diagrams.
Critically argue whether the bank’s performance and risk were affected by Brexit.
Your essay has to include a cover page (with the title of essay, do NOT include your student ID), a list of reference, and the required appendix.
The referencing format should be Harvard referencing style.

This essay should be submitted via the module blackboard site. You are expected to understand the university regulation on academic offence. The rules on late submission and plagiarism are applied and fully enforced by the school.

Key Marking Criteria:

Explanation on the topic
Quality of data collected
Choice and evaluation of financial ratios/measures for bank analysis
Analysis of the chosen financial ratios/measures
Validity and insightfulness in discussion and arguments

Extra Notes

This Link is for the UK banks that you should chose one from

https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/authorisations/which-firms-does-the-pra-regulate/2019/list-of-banks/banks_1219.pdf

It has to be one from the list in the link above.

You should measure data for risk and Performance and risk ratio. Just for one bank. And an old established bank as you will need data from 2014.

You should only write 100 words about Brexit not more.

These should be before June 2016 when Brexit was announced. So, you should analyze from 2014-2016 as the before period. Then from 2016-2019 to analyze the after effect. To see any impact from Brexit. You should analyze any impact on performance and risk.

Performance can be from profitability using ratio using return on equity ratio. And special measurements from net interest margins. And also, the market share of the bank. Credit risk and interest risk also.

SO there has to be two ratios for performance and two ratios for risk they should be used to show the before and the after. And their financial reports can show why they have made a loss for example. And mention the bank name.

Identify the link between board independence and the quality of financial reporting among the 80 companies.

February 28, 2020/in Finance /by Donald

Identify the link between board independence and the quality of financial reporting among the 80 companies.

Use analysis to compare between unqualified (40) board independence and quality of financial reporting and qualified (40) audit opinion and quality of financial reporting,

Present results in as complete, clear and helpful way as possible, analyse results in a useful way, critically comment on the quality of responses and the reliability/limitations of the findings. Use tables and figures in this section to communicate your data clearly and concisely.

Include link or where you got the sources from if possible.

Prepare a valuation of a large financial and banking institution. This should involve: (1) Dividend Discount Model valuation; (2) Valuation by Comparables (use multiples – Price to Earnings Ratio, Price to Book Value Ratio, etc.; Morningstar.com has several ratios under “Valuation”); and, Damodaran’s Excess Returns Model (Excel model provided).

February 22, 2020/in Finance /by Donald

FINC 440 Instructions & Recommendations for Preparing the Course Assignment

This project is closely aligned with the Course Outcomes and Finance Program Objectives. Completion of this project can be used as part of a portfolio to show potential employers the student is skilled at performing company valuations and financial statement analysis and can be included on the student’s resume.

Due at the end of Week 7 – Valuation of Financial Institution:

The purpose of this note is to carefully explain the general expectations and requirements for the Valuation of Financial Institution and Technical Analysis Assignment that is to be prepared for FINC 440. The information and materials presented here are intended to make sure that you clearly understand the general expectations and that there are no misunderstandings about what is to be done and what is expected.

Review this material so that you are familiar with the specific requirements that are be followed in the preparation and submission of the Assignment.

This Assignment comprises 15% of the final course grade. It will take some time and effort to produce high quality analysis.

Prepare a valuation of a large financial and banking institution. This should involve: (1) Dividend Discount Model valuation; (2) Valuation by Comparables (use multiples – Price to Earnings Ratio, Price to Book Value Ratio, etc.; Morningstar.com has several ratios under “Valuation”); and, Damodaran’s Excess Returns Model (Excel model provided).
Explain the principal assumptions used in the DDM valuation?
Are the valuations consistent – why or why not?
What special challenges or issues did you encounter with the valuations?

Submission: Submit to Gradebook and Post a Copy in the Discussion Section of the Online Classroom.

Required Outline & Other Information about the Assignments –

Work Hard to Avoid Personal Pronouns – The excessive use of personal pronouns is discouraged in business and analytical writing. It is recommended that personal pronouns are avoided altogether, if possible. Please make sure that personal pronouns (e.g., I, we, my, our, etc.) are avoided in paper. It will take some work, but it can be done easily by rearranging the wording of sentences.
Companies Are Not “They,” “Their,” or “Them” – This is a reminder that a company is not a “they,” “their,” or “them.” A company is very much an “it.” So, to reference a company, use “it,” the name of the company, or “the company,” or “the organization,” or “the firm,” etc.
Outline for Paper –Students must use the required outline for this assignment. The closer that the paper conforms to the required outline, the better! The outline is presented in the next section.
Evaluation Rubric – An evaluation rubric is available for the Assignments. It will be used to evaluate the Assignments. The rubric shows the important components that must be included in the papers. It is a good idea to take a look at the rubric and make sure that each Assignment addresses the requirements. A copy is posted with each Assignment in the online classroom.
Subheadings – Each section of the paper must begin with a sub-heading. Please use the sub-headings included in the required outline (presented in the next section).

Here is the Required Outline (It must be used for each Assignment) –

The five class Assignments are intended to be constructive learning experiences. They are designed to show students how to prepare analytical reports in finance using critical thinking, research, and writing skills. The following outline is to be used for each Assignment; these titles are the required subheadings for the sections of the written report:

Cover Page – Include a cover page containing the title of the Assignment, the student’s name, the professor’s name, the course title, and the date.

Introduction – The Introduction must include:

(a) A review of the Assignment purpose, research methods and the principal information sources, and other information related to the completion of the analysis.

(b) The introduction should also include an overview of the sections of the paper that follow. (1/2 to 1 page)

Analysis Section – The body of the report is to address the assigned topics and questions. It is essential that students include appropriate in-text reference citations in APA format:
Summary / Conclusion – The summary or conclusion should review the major observations, conclusions and recommendations developed in the analysis. No new material should be introduced in this section. (1/2 to 1 page)
References – Provide list of references in APA format.

Assess cost concepts, management control processes of budgeting, revenue cycle management, working capital, time value analysis, capital budgeting analysis, and long-term financing decisions.

February 21, 2020/in Finance /by Donald

Unit 4 Assignment

Cost Accounting System Paper

Unit outcomes addressed in this Assignment:

Differentiate among the general types of cost behavior.
Propose a rationale for cost allocation in healthcare organizations.

Course outcome addressed in this Assignment:

HA520-2: Assess cost concepts, management control processes of budgeting, revenue cycle management, working capital, time value analysis, capital budgeting analysis, and long-term financing decisions.

PC 6.1: Incorporate data, inferences, and reasoning to solve problems.

Assignment Instructions

Unit 4 Case 2: Sooner Health Network

SOONER HEALTH NETWORK (the Network), which consists of five medical group practices, is a subsidiary of not-for-profit Sooner Health System (the System). The Network includes both primary care and specialty physicians, with an emphasis on obstetrics/gynecology, eldercare, and pediatrics. Prior to the founding of the Network, the five practices operated independently.

The Network has three practice locations, each staffed with a mix of primary care and specialist physicians. Although the Network itself is only marginally profitable, it is an important contributor to the profitability of the System because it generates a large amount of revenues from referrals for both inpatient admissions and inpatient and outpatient ancillary services. In fact, each $1 of revenue generated within the Network is estimated to lead to $8 of inpatient and ancillary revenues to the System. By limiting the amount of ancillary services provided at the three Network locations, patients are forced (or at least encouraged) to use other System facilities for such services.

Still, some ancillary services are best performed at the Network locations for one or more of the following reasons: lower costs, increased physician efficiency, and improved patient convenience and hence better CAHPS (Consumer Assessment of Healthcare Providers and Systems) scores. For example, one of the practice locations now has a diagnostic imaging capability. When the scanner was moved from another facility to the Network location, volume increased, costs decreased, and both physician and patient satisfaction improved. (For more information on the CAHPS program, see www. ahrq .gov/ cahps/ about-cahps/index.html)

The proposal currently being considered by the Network is to provide ultrasound services at the Network locations. Preliminary analysis indicates that two approaches are most suitable.

Alternative 1 involves the purchase of one ultrasound machine for each of the Network’s three locations. Patients would schedule appointments, generally at the clinic they are using, during preset times on specified days of the week. Then, the full-time ultrasound technician would travel from one location to another to administer the tests as scheduled. Alternative 2, on the other hand, involves the purchase of only one ultrasound machine, but patient scheduling would be the same. The machine would be mounted in a van that the technician would drive to each of the three Network locations. Most of the operating costs of the two alternatives are identical, but Alternative 2 has the added cost of operating the van and setting up the machine after each move.

The two alternatives differ substantially in capital investment costs because Alternative 1 requires three ultrasound machines, at a cost of $100,000 each, whereas Alternative 2 requires only one machine. However, Alternative 2 requires a van, which with necessary modifications would cost $40,000. Thus, the capital costs for Alternative 1 total 3 x $100,000 = $300,000, whereas the costs for Alternative 2 amount to only $100,000 + $40,000 = $140,000.

Because the two alternatives have different operating costs, a proper cost analysis of the two alternatives must include both capital investment and operating costs. The Network financial staff, which is the System financial staff, considered several methods for estimating the operating costs of each alternative. After much discussion, the chief financial officer (CFO) decided that the activity-based costing (ABC) method would be best. Furthermore, an ad hoc task force was assigned to perform the cost analysis.

To begin the ABC analysis, the task force had to develop the activities involved in the two alternatives. This task was accomplished by conducting walkthroughs of the entire process from the standpoint of the patient, the ultrasound technician, and the billing and collections department. The results are shown in exhibit 8.1. A review of the activities confirms that all except one – consisting of transportation, setup, and breakdown – are applicable to both alternatives.

The next step in the ABC process is to detail the costs associated with each activity. This step uses financial, operational, and volume data, along with the appropriate cost driver for each activity, to estimate resource consumption. Note that traditional costing, which often focuses on department-level costs, typically first deals with direct costs then allocates indirect (overhead) costs proportionally according to a predetermined allocation rate. In ABC costing, the activities required to produce some service, including both direct and indirect, are estimated simultaneously. For example, exhibit 8.1 contains activities that entail direct costs (such as technician time) and activities that entail indirect costs (such as billing and collection). Although the ABC method is more complex and hence costlier than the traditional method, it is the only way to accurately (more or less) estimate the costs of individual services.

Activity cost detail on a per procedure basis is contained in exhibit 8.2. Each activity is assigned a cost driver that is most highly correlated with the actual utilization of resources. Then, the number of driver units, along with the cost per unit, is estimated for each activity. The product of the number of units and the cost per unit gives the cost of each activity. Finally, the activity costs are summed to obtain the total per procedure cost.

Many of the activity costs cannot be calculated without an estimate of the number of ultrasounds that will be performed. The best estimate is that 50 procedures would be done each week, regardless of which alternative is chosen. Assuming the technician works 48 weeks per year, the annual volume estimate is 2,400 procedures. Of course, one factor that complicates the analysis is that a much greater total volume can be accommodated under Alternative 1 (with three machines) than with Alternative 2 (with only one machine). However, to keep the initial analysis manageable, the decision was made to assume the same annual volume regardless of the alternative chosen.

Other costs are thought to be relevant to the decision. First, in addition to the purchasing and operating (primarily consisting of fuel expenses) costs of the van, the estimated annual vehicle maintenance costs are $1,000. Furthermore, annual maintenance costs on each of the three ultrasound machines under Alternative 1 are estimated at $1,000, whereas the annual maintenance costs for the single machine under Alternative 2 are estimated higher, at $1,500, because of added wear and tear. The manufacturer of the ultrasound machines has indicated that a discount may be available if three machines, as opposed to only one, are purchased. The amount of the discount is somewhat uncertain, although 5 percent has been mentioned.

Finally, to get a rough estimate of the total annual costs over the life of the equipment, assumptions about the useful life of the ultrasound machines and the van must be made. Although somewhat controversial, the decision was made to assume a five-year life for both the ultrasound machines and the van and that the value of these assets would be negligible at the end of five years.

Instructions

You are the chair of the Network’s ad hoc task force. Your charge is to evaluate the two alternatives and to make a recommendation on which one to accept, if revenues would be identical for the two alternatives, and hence the decision can be made solely on the basis of costs. As part of the analysis, the costs of the two alternatives must be estimated on a per procedure basis and an annual basis. In addition, any relevant qualitative factors must be considered before the recommendation is made.

To keep the base case analysis manageable, the task force was instructed to assume that the operating costs remain constant over the useful life of the equipment. For comparative purposes, this assumption is not too egregious because the activities are roughly the same for both alternatives and, hence, inflation would have a somewhat neutral impact on the cost comparison.

In addition, the System CFO has asked the task force to perform some sensitivity (scenario) analyses. He is concerned about the accuracy of the cost detail inputs. Although he is confident about many of the estimates, he thinks others are more arbitrary. Those activity cost inputs considered to be most uncertain are supplies cost per unit; billing and collection cost per unit; general administration cost per unit; and transportation, setup, and breakdown cost per unit.

Thus, first, the task force must redo the analysis assuming that these inputs are higher than the base case values by 10 and 20 percent. Activity cost inputs less than the base case values could also be examined, but the critical issue here is not to underestimate the total costs involved in the two alternatives. Second, the task force must determine what would happen to the cost estimates if the useful life of the capital equipment were as short as three years or as long as seven years. Another concern was that the useful life of the equipment depended on the alternative chosen; that is, there would be less wear and tear under Alternative 1 than under Alternative 2. Finally, the task force must assess the impact of a purchase discount: Would the discount amount influence the ultimate decision?

You believe that performing a sensitivity analysis on the number of procedures would be helpful, but you realize this task would require recalculation of the per unit cost inputs, an effort thought to be too time-consuming to undertake at this point in the analysis.

Conduct a case study on how Brexit and uncertainty of Brexit plan have affected a chosen UK commercial bank so far, in the context of performance and risk level.

February 21, 2020/in Finance /by Donald

6FNCE001W Banking Theory and Practice 2019-20Individual Coursework

The assignment is a case study. The length of the essay is 1000 words (+/- 10%) excluding cover page, table of contents, abstract, references and appendices.

Required:

Explain the background of the mentioned topic, using appropriate references.
Clearly explain the objectives of your case study. This should include the details of which types of performance and risk you choose to study.
Collect financial data of your chosen UK commercial bank from a reliable source.
Carefully evaluate financial ratios/measures which meet the objectives of the case study.
Analysis the financial ratios/measures, with the support of appropriate diagrams.
Critically argue whether the bank’s performance and risk were affected by Brexit.
Your essay has to include a cover page (with the title of essay, do NOT include your student ID), a list of reference, and the required appendix.
The referencing format should be Harvard referencing style.

Key Marking Criteria:

Explanation on the topic
Quality of data collected
Choice and evaluation of financial ratios/measures for bank analysis
Analysis of the chosen financial ratios/measures
Validity and insightfulness in discussion and arguments

Extra Notes

This Link is for the UK banks that you should chose one from

https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/authorisations/which-firms-does-the-pra-regulate/2019/list-of-banks/banks_1219.pdf

It has to be one from the list in the link above.

You should measure data for risk and Performance and risk ratio. Just for one bank. And an old established bank as you will need data from 2014.

You should only write 100 words about Brexit not more.

These should be before June 2016 when Brexit was announced. So, you should analyse from 2014-2016 as the before period. Then from 2016-2019 to analyse the after effect. To see any impact from Brexit. You should analyse any impact on performance and risk.

Does the decision-maker’s responsibility to provide for his or her family outweigh his or her ethical responsibility to company stakeholders?

February 20, 2020/in Finance /by Donald

Prepare a 3-page analysis that describes the appropriate stakeholders in the case, the ethical issues based on how the action affects stakeholders, and summarize possible decisions for the business based on the effect on stakeholders. In addition, include the answers to the questions below:
Introduction
• Who are the stakeholders in this case?
• What are the interests of the stakeholders?
Legal Analysis
• Do any of the environmental laws from the Digital Book apply to this case? Perform research on the laws that may apply, and be sure to cite to an authoritative source.
• If they do apply, analyze the legality of the company’s actions in this case.
• If the laws do not apply to the actions in this case, explain why they do not apply.
Ethical Analysis
• Are government regulations and fines simply a “pay to play” system where companies can simply accept fines and proceed with environmental violations if the actions result in overall profitability?
• Do ethical responsibilities change with relocation if the law in the new jurisdiction is different?
• Does the decision-maker’s responsibility to provide for his or her family outweigh his or her ethical responsibility to company stakeholders?
Conclusion and Recommendation
• Based on the above, as well as what you have learned about ethical theories and foundations of moral development, what is your final recommendation to the decision-maker regarding this case?
• Your recommendation should be at least 2 paragraphs and include at least three reasons, with specific references to authoritative sources, stating how you arrived at that conclusion.

Collect and evaluate the data about stock prices of the assigned company for the last one year for the company and its major competitor.

February 18, 2020/in Finance /by Donald

FINC 330 Project Description

Research Project Part 2

Due at the end of week 7

Bond and Stock Performance Analysis

OBJECTIVE

In this part of the project you are to assume to have been hired to join a team serving as an internal financial analyst to THE COMPANY. Your client plans to invest in bonds and (or) stocks issued by THE COMPANY (NIKE). In part 6 of the assignment you are asked to provide some recommendations to THE COMPANY’S management.

THE COMPANY (NIKE)for part 2 of the project can be the company that you were using for the Research Project Part 1, NIKE. THE COMPANY for this part of the project must have bonds listed on the website http://finra-markets.morningstar.com/BondCenter/Default.jsp. To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS.

SUGGESTED WEBSITES

www.morningstar.com – To find the information for your company you need to type the stock symbol in the Quotes window to get into the company’s page.

http://finra-markets.morningstar.com/BondCenter/Default.jsp – To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS.

https://markets.businessinsider.com/bonds. To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH.

www.marketwatch.com -To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.

www.money.cnn.com -To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.

www.finance.yahoo.com – To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.

www.nyse.com – Click on Data, then click on Stocks (under Quotes), and type the name of the company or the stock symbol in the window “Keyword or symbol” to get into the company’s page.

www.nasdaq.com – To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.

Company’s websites (NIKE)

YOUR SPECIFIC ASSIGNMENT

Using the information from the websites the student will develop evaluation of bond and stock performance for THE COMPANY (NIKE). (The evaluation portion will total 85% of the assignment grade)

-1—Background and Industry (one short paragraph).

-2- The financial leverage ratios (10% of the project grade)

a) Find the financial leverage ratios for NIKE for the last 3-5 years in the Internet. Present these ratios as the table(s) in your project.

You can find these ratios in the Internet or calculate them. If you use published ratios you must indicate that and cite their source.

Debt-to-assets ratio (Debt ratio)
Debt-to Equity ratio
Interest Coverage ratio (the Times Interest Earned)

b) Write (about) 1 page of the analysis of the ratio results. In your analysis you should answer the following questions. Please explain your answer to each question.

How is NIKE’s financing its assets?
Discuss how much risk is associated with the bonds issued by the company?
How can this risk be measured? Please explain.

-3- Collect and evaluate the data about bond performance of NIKE.
(15% of the project grade).

The information on bonds can be found on the website http://finra-markets.morningstar.com/BondCenter/Default.jsp. To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS.

Another useful website on bond information is https://markets.businessinsider.com/bonds. To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH.

Copy the quotations of two bonds issued by NIKE that contain the Price. Present these quotations in your project.

Assume that par value of the bond is $1,000. What were the last prices of the bonds in $$$ (listed in the Price column)? Show your work in your project.
Assume that par value of the bond is $1,000. Calculate the annual coupon interest payments. Show your work in your project.
Assume that par value of the bond is $1,000. Calculate the current yield of the bonds. Show your work in your project.

Write a 1 page of the analysis of the In your analysis you should answer the following questions. Please explain your answer to each question.
1. How much is the YTM listed in quotations is for the bonds? Explain the meaning of YTM.
2. If you are going to buy a bond issued by NIKE, which bond would you choose? Why?
3. Are these bonds callable? If the bonds that you chose are callable (non-callable), will it change your decision to buy them?
4. If you are an investor who is looking for a bond to invest in, are you going to buy a bond that you chose? Take a look at the balance sheet and income statement of the company. What data or ratios support your decision to buy this bond or not? You may want to incorporate the results of the Research Project Part 1, as well as the results of the financial leverage ratios to answer this question. You should develop a specific recommendation, with supporting rationale to explain your answer.

-4- Collect and evaluate the data about stock performance of the assigned company for the last one year. (totally 35% of the project grade).

1) Find the market ratios for the company for the last 1-3 years and its major competitor for the last year in the Internet. (10% of the project grade)

Price/Earnings ratio
Market/Book ratio (also called (Price/Book ratio)
Earnings per share
Dividends per share
Other market ratios on your choice

These ratios are available on www.morningstar.com > Company’s page – under Valuation, Financials, and under Dividends.

You can find these ratios in the Internet or calculate them. If you use published ratios you must indicate that and cite their source.

Present the market ratios as the table(s) in your project.
Write about 1 page of analysis of the market ratio results that you found. Compare the market ratio results against the industry or main competitor. In your report please answer the question: Are the common stockholders receiving an adequate return on their investment?

Compare the P/E ratio of your company with the industry average or 5-year average. Is the stock overvalued, undervalued, or properly valued? Why? In accordance with your findings, is it reasonable to buy the stock? Please explain your answers.

-2) Analysis of the historical stock prices trend for the last year. (10% of the project grade)

Collect and evaluate the data about stock prices of the assigned company for the last one year for the company and its major competitor.
Create the chart(s) using the stock price chart tools on the websites or Excel. Present the chart(s) in your project.
Write about 0.5 page of analysis the historic stock prices trend for the last year.

3) Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on NIKE stock. Note that you will need the risk-free rate and the market return. Show this information in your project. (15% of the project grade)

Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on stock. Note that you will need the risk-free rate, beta, and the market return.
a) To get the current yield on 10-year Treasury securities go to www.finance.yahoo.com -click on Markets – U.S. Treasury Bonds Rates. You will use the current yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks. Discuss how appropriate this rate is as a measure of risk.
b) Between 1926 and 2017, the compound annual rate of return of S&P 500 is estimated a 6.5%. We will use this number as the market return. Discuss how appropriate this rate is as a measure of return.
c) Beta is listed in finance.yahoo.com and in www.morningstar.com on the company’s front page. What is the beta listed for the company? What does it mean?
d) Calculate the required return on the stock using the Capital Asset Pricing Model (CAPM) Security Market Line. Please show your work.
There are several methods how to calculate the growth rate. One of the possible ways is to calculate the sustainable growth rate as g = ROE *(1- Dividend payout ratio). You can find ROE and the Dividend Payout Ratio on www.morningstar.com > Company’s page – under Financials and under Dividends

Calculate the company’s sustainable growth rate. Please show your work.

Apply the Gordon model (constant growth rate model) to calculate the intrinsic (economic) value of the stock. Please show your work.

Please note that for some companies it is not possible to use the Gordon model. If that is the case, please explain why it is not possible to use this model for your company. What other models is it possible to use?

Compare the result of your calculations with the current stock price. Is the stock overvalued, undervalued, or properly valued? Why? In accordance with your findings, is it reasonable to buy the stock? Why? Please explain your answer.

–5- Develop a specific recommendation, with supporting rationale for your client, as to whether the assigned company’s recent trend in financial and stock performance is of sufficient financial strength to warrant entering in a long-term investment in bonds and/or stocks of the company. Explain your answer (about 1 page) (10% of the project grade).

-6- Develop a specific recommendation, with supporting rationale for the NIKE management – Think about the financial strategy of the company, how to best balance THE COMPANY’S financial leverage to optimize shareholder wealth going forward taking into consideration the company’s current market position, credit rating, dividend policy, etc. (10% of the project grade).

-7- Reflection – the students should write a paragraph in their own words reflecting on what they learned from the assignment and how they think they could apply what they learned in the workplace. (5% of the project grade).

PRESENTATION OF PAPER AND WRITING (15%) of the project grade):

-Organization, Format and Presentation of Paper including the Introduction, Body, and Summary. Each section of the paper must begin with a sub-heading. Please use the sub-headings included in the assignment (4% of the project grade)

Use of Tables, Figures and Other Graphics to Summarize and Support Analysis Presented in the Paper (3% of the project grade)

Logical and Smooth Flowing Transitions and Relationships among Sections of the Written Report (3% of the project grade)

Research Sources and Significance of Research Information and Data, Use of APA Citation Methodology (5% of the project grade)

Analyse the legal and organisational requirements for financial reporting in different business organisations.

February 18, 2020/in Finance /by Donald

Sample Assignments

Scenario

For the purpose of this assignment you are to assume the role of a junior accountant for a retail group and your line manager is the Regional Director of Finance. The Director of Finance needs to produce a leaflet for some new members of the Board as part of the induction pack. They are experts in a range of business fields but have limited financial knowledge. You have been asked to prepare a first draft of the leaflet.

Activity 1

The leaflet must provide an overview of accounting policies and procedures and:

explain the purpose and requirements of a business organisation maintaining financial records.
analyse the techniques of using manual and computerized accounting systems.
analyse the legal and organisational requirements for financial reporting in different business organisations.

LO1 Assessment Criteria 1.1 1.2 1.3

Activity 2

At the next meeting of the Board there is an agenda item titled ‘Discussion of financial statements and their usefulness for stakeholder groups’. This will be led by the Regional Director of Finance. You have received an email asking you to produce a draft paper which evaluates the usefulness of financial statements to a range of stakeholder groups.

LO1 Assessment Criteria 1.4

Activity 3

Due to a reduction in sales revenue and a fall in group profits the Board of Directors is investigating inventory management, credit control and current liquidity In order to make meaningful comparisons. Your line manager has asked a few staff in the department to analyse the final accounts of competitors and you have been selected to joint this group.

Analyse, using ratio analysis, the components of working capital for your chosen competitor.
Using your analysis, explain how working capital can be managed effectively in business organisations.

LO2 Assessment Criteria 2.1 2.2

Activity 4

A number of new managers have been recruited to the retail group who will have responsibility for managing their own budgets. Your line manager has asked you to prepare a presentation on financial procedures for the induction programme. In the presentation and accompanying hand out you must:

explain the difference between financial and management accounting.
explain the budgetary control process.

LO3 Assessment Criteria 3.1 3.2

Activity 5

The retail group has introduced a new product, and uses a standard cost system. Standard costs for 1,000 kilograms of the new product are:

Requirements	Quantity	Price per kilogram	Total Cost
	Kilograms	£	£
a	800	0.25	200
b	200	0.40	80
c	200	0.10	20
Input	1,200		300
Output	1,000		200

The production of 1,000 kilograms of the new product requires 1200 kilograms of raw materials. Hence the yield is 1,000 / 1,200 or 5/6 of input. Materials records indicate.

Materials	Opening Inventory	Purchases (units) in January	Closing Inventory
A	10,000 kilograms	162,000 @ £0.24	15,000 kilograms
B	12,000 kilograms	30,000 @ £0.42	4,000 kilograms
C	15,000 kilograms	32,000 @ £0.11	11,000 kilograms

To convert 1,200 kilograms of raw materials into 1,000 kilograms of finished product required 25 hours of labour at £7.25 per hour.

Actual direct labour hours and costs are 3,800 hours at £27,550. Factory overhead is applied on a direct labour hour basis at a rate of £5 per hour (£3 fixed, £2 variable).

Factory overhead is £20,000 with 4,000 direct labour hours. Actual overhead are £22,000, Actual finished production is 200,000 new products.

The standard cost per kilogram of the finished product:

Materials	£0.30 per kilogram
Labour	£0.12 per kilogram
Factory overheads	£0.10 per kilogram

The standard selling price per unit 50% mark up on total cost. The actual selling prices 30% mark up on total cost.

Calculate the total and unit costs of the finished product.
Produce an absorption costing statement showing the marginal cost.
Calculate the materials, labour and overhead variances.
Interpret the variance results considering both financial and non-financial factors.
Produce a statement reconciling budgeted to actual profit.
Evaluate a range of costing techniques that could be used for pricing purposes.

LO3 Assessment Criteria 3.3 3.4.

Activity 6

Your line manager has been pleased with your work to date and has invited you to a meeting with the Marketing Director. She has been researching a number of projects to encourage customers to return to the store. You have been asked to report on the financial viability of the projects.

The costs associated with each project are as follows:

	Project 1	Project 2	Project 3	Project 4
	£	£	£	£
Initial Cost	550,000	550,000	290,000	460,000
Expected Cash Flow
Year 1	20,000	50,000	15,000	30,000
Year 2	75,000	175,000	80,000	95,000
Year 3	125,000	200,000	120,000	150,000
Year 4	250,000	175,000	100,000	210,000
Year 5	200,000	70,000	60,000	300,000

Table of Discount Factors

	Rate percent
Year	4.5		5.0		5.5	6.0
1	0.9569378		0.9523810		0.9478673	0.9433962
2	0.9157300		0.9070295		0.8984524	0.8899964
3	0.8762966		0.8638376		0.8516137	0.8396193
4	0.8385613		0.8227025		0.8072167	0.7920937
5	0.8024510	0.7835262		0.7651344	0.7472582

Using appropriate project appraisal techniques assess and demonstrate the financial viability of each project.
Evaluate the methods of investment appraisal completed in part (a). Recommend to the Marketing Director the most appropriate project for the business.
Explain appropriate internal and external sources of finance that could be used to finance this project.

LO4 Assessment Criteria 4.1 4.2 4.3

Guidelines for assessors

The assignment submitted by learners must achieve the learning outcomes and meet the standards specified by the assessment criteria for the unit. The suggested evidence below is how learners can demonstrate they have met the required standard.

Task Number	Assessment criteria	Suggested evidence
1	LO1 AC 1.1 1.2 1.3	The leaflet should be appropriately presented for the intended audience. The learner is expected to use an appropriate presentation format and produce a clear explanation of the purpose of financial records and provide an overview of financial record keeping. The learner is not expected to produce a full set of accounts but may use extracts from accounts to illustrate debit and credit entries or an audit trail from a computerized system. The information must include an overview of Income Statements (profit and loss accounts) and Statement of Financial Position (balance sheets) for different types of ownership. The learner should ensure all technical terms are clearly explained. The learner could consider including a hand out or glossary of terms in the overview.
2	LO1 AC 1.4	The learner needs to evaluate the key information that financial statements provide for different stakeholders and make a judgement on their use and relevance.
3	LO2 AC 2.1 2.2	The learner is expected to use an appropriate report format and draw information from the published accounts of the chosen retail group. (Income Statements (profit and loss accounts) and Statement of Financial Position (balance sheets)) As a minimum the learner should calculate liquidity ratios for the last two years. The learner may also consider the debtor and creditor collection periods and stock turnover to support the discussion on improvements to working capital. The learner should clearly state any assumptions made in relation to the data used from company reports.
4	LO3 AC 3.1 3.2	The learner is expected to use an appropriate presentation format and produce a hand out taking into account the end users. There should be a detailed explanation of the budgetary control process and the difference between management and financial accounting must be clearly explained. The explanations should be supported by illustrations. The learner is not expected to produce a detailed budget statement.
5	LO3 AC 3.3 3.4	The learner must show full workings of all calculations. All financial statements should be presented in a format that complies with current accounting conventions. The learner should state clearly any assumptions made and clearly distinguish adverse and favourable variances justifying any recommendations. The learner is expected to manipulate the break- even formula and giver a detailed explanation of the results.
6	LO4 AC 4.1 4.2 4.3	The learner must complete the tasks in order to demonstrate achievement of the LO at the appropriate standards. The learner should use appropriate terminology to meet the needs of a readership who have a non-financial background. The learner is expected to use a range of investment appraisal techniques and show all stages of any calculations. The learner should be able to use discount factor tables; and calculate exact discount factors using extrapolation. Any decisions made should be supported by clear justification explaining why a particular project has been accepted or rejected. The learner is not expected to discuss all sources of finance but focus on those sources that are relevant and realistic for the project selected.

Create the chart(s) using the stock price chart tools on the websites or Excel. Present the chart(s) in your project.

February 18, 2020/in Finance /by Donald

Bond and Stock Performance Analysis

The main COMPANY for this project is HOME DEPOT and the competitor is LOWES

OBJECTIVE

In this part of the project you are to assume to have been hired to join a team serving as an internal financial analyst to THE COMPANY. Your client plans to invest in bonds and (or) stocks issued by THE COMPANY (SELECTED BY INSTRUCTOR). In part 6 of the assignment you are asked to provide some recommendations to THE COMPANY’S management.

THE COMPANY for part 2 of the project can be the company that you were using for the Research Project Part 1 or ANOTHER COMPANY determined by your professor. THE COMPANY for this part of the project must have bonds listed on the website http://finra-markets.morningstar.com/BondCenter/Default.jsp. To find the information on bonds, click on Search in the middle of the screen (under Market Center Bond Guide), under Quick Search type the Issuer Name and the Symbol, and click SHOW RESULTS.

Alternatively, you can request approval of another publicly traded company. This request must be submitted before the end of the first week of the course. The request must include

identification of the company by ticker symbol and name
a reasonable and appropriate explanation of why you want to examine the alternative company
the source of the analyst’s report that will be used in the analysis (which must be submitted to me)
acknowledgement by you that all the specific elements of the assignment (see below) will be prepared by you and included in the final research project report

SUGGESTED WEBSITES

www.morningstar.com – To find the information for your company you need to type the stock symbol in the Quotes window to get into the company’s page.

https://markets.businessinsider.com/bonds. To find the information on bonds, scroll down the page, type the name of the company in the window under Bond Finder, and click SEARCH.

www.marketwatch.com -To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.

www.money.cnn.com -To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.

www.finance.yahoo.com – To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.

www.nyse.com – Click on Data, then click on Stocks (under Quotes), and type the name of the company or the stock symbol in the window “Keyword or symbol” to get into the company’s page.

www.nasdaq.com – To find the information for your company you need to type the stock symbol in the Search window to get into the company’s page.

Company’s websites

YOUR SPECIFIC ASSIGNMENT

-3- Collect and evaluate the data about bond performance of the assigned company. (15% of the project grade).

Copy the quotations of two bonds issued by THE COMPANY (SELECTED BY INSTRUCTOR) that contain the Price. Present these quotations in your project.

Assume that par value of the bond is $1,000. What were the last prices of the bonds in $$$ (listed in the Price column)? Show your work in your project.
Assume that par value of the bond is $1,000. Calculate the annual coupon interest payments. Show your work in your project.
Assume that par value of the bond is $1,000. Calculate the current yield of the bonds. Show your work in your project.
Write a 1-2 page of the analysis of the bonds. In your analysis you should answer the following questions. Please explain your answer to each question.
1. How much is the YTM listed in quotations is for the bonds? Explain the meaning of YTM.
2. If you are going to buy a bond issued by THE COMPANY, which bond would you choose? Why?
3. Are these bonds callable? If the bonds that you chose are callable (non-callable), will it change your decision to buy them?
4. If you are an investor who is looking for a bond to invest in, are you going to buy a bond that you chose? Take a look at the balance sheet and income statement of the company. What data or ratios support your decision to buy this bond or not? You may want to incorporate the results of the Research Project Part 1, as well as the results of the financial leverage ratios to answer this question. You should develop a specific recommendation, with supporting rationale to explain your answer.

-4- Collect and evaluate the data about stock performance of the assigned company for the last one year. (totally 35% of the project grade).

1) Find the market ratios for the company for the last 1-3 years and its major competitor for the last year in the Internet. (10% of the project grade)

Price/Earnings ratio
Market/Book ratio (also called (Price/Book ratio)
Earnings per share
Dividends per share
Other market ratios on your choice

These ratios are available on www.morningstar.com > Company’s page – under Valuation, Financials, and under Dividends

You can find these ratios in the Internet or calculate them. If you use published ratios you must indicate that and cite their source.

Present the market ratios as the table(s) in your project.
Write about 1 page of analysis of the market ratio results that you found. Compare the market ratio results against the industry or main competitor. In your report please answer the question: Are the common stockholders receiving an adequate return on their investment?
Compare the P/E ratio of your company with the industry average or 5-year average. Is the stock overvalued, undervalued, or properly valued? Why? In accordance with your findings, is it reasonable to buy the stock? Please explain your answers.

-2) Analysis of the historical stock prices trend for the last year. (10% of the project grade)

Collect and evaluate the data about stock prices of the assigned company for the last one year for the company and its major competitor.
Create the chart(s) using the stock price chart tools on the websites or Excel. Present the chart(s) in your project.
Write about 0.5 page of analysis the historic stock prices trend for the last year.

3) Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on THE COMPANY stock. Note that you will need the risk-free rate and the market return. Show this information in your project. (15% of the project grade)

Apply the Capital Asset Pricing Model (CAPM) Security Market Line to estimate the required return on stock. Note that you will need the risk-free rate, beta, and the market return.
a) To get the current yield on 10-year Treasury securities go to www.finance.yahoo.com -click on Markets – U.S. Treasury Bonds Rates. You will use the current yield on 10-year Treasury securities as the risk-free rate to estimate the required rate of return on stocks. Discuss how appropriate this rate is as a measure of risk.
b) Between 1926 and 2017, the compound annual rate of return of S&P 500 is estimated a 6.5%. We will use this number as the market return. Discuss how appropriate this rate is as a measure of return.
c) Beta is listed in finance.yahoo.comand in www.morningstar.comon the company’s front page. What is the beta listed for the company? What does it mean?
d) Calculate the required return on the stockusingthe Capital Asset Pricing Model (CAPM) Security Market Line. Please show your work.
There are several methods how to calculate the growth rate. One of the possible ways is to calculate the sustainable growth rate as g = ROE *(1- Dividend payout ratio). You can find ROE and the Dividend Payout Ratio on www.morningstar.com> Company’s page – under Financials and under Dividends

Calculate the company’s sustainable growth rate. Please show your work.

Apply the Gordon model (constant growth rate model) to calculate the intrinsic (economic) value of the stock. Please show your work.

Note that for some companies it is not possible to use the Gordon model. If that is the case,explain why it is not possible to use this model for your company. What other models is it possible to use?

Compare the result of your calculations with the current stock price. Is the stock overvalued, undervalued, or properly valued? Why? In accordance with your findings, is it reasonable to buy the stock? Why? Please explain your answer.

What is the underlying theory? Describe the underlying theory/ies that is directly related to your research question, i.e., why X causes Y and through what channels the causality takes place.

February 15, 2020/in Finance /by Donald

The impact/effect of electric vehicles on automotive industry.

Does electric vehicles have an impact on the automotive industry?

Will it cause changes to the automotive industries ecosystem? Which includes manufacturers, end customers and government regulations.

Electric vehicles Automotive industry

Why is this question important? (i.e. the motivation of the study)

· Why is the question interesting?

· From whose perspective are you undertaking this study?

· Who will benefit from this research and why?

· Provide evidence (citing papers or showing data) to your claims.

It is interesting because the topic revolves around a recent scenario of emergence of electric cars and how it will change

the world around us in the coming future and to research the depths of the situation to get more knowledge about the future

of the automotive industry which as a result makes it more motivating to study.

Germany will stop the sale of all new petrol and diesel cars from 2030, Scotland from 2032,

and France and the UK from 2040.

The business perspective of the already existing automotive companies, who have been in the market from centuries,

And are the market leaders of gasoline production cars.

Business, public and the government will benefit from this study as the shift to electric was once considered far off and

unlikely for many people, the rising concern for climate change and sustainability has helped sway public opinion towards

the need for transportation based on alternative energy. As more people invest in electric vehicles, the automotive industry

is bound to experience some serious changes.

https://www.altenergymag.com/article/2019/03/the-impact-of-electric-cars-on-the-automotive-industry/30627

https://www.weforum.org/agenda/2019/03/the-dirty-secret-of-electric-vehicles/

What is the underlying theory?

Describe the underlying theory/ies that is directly related to your research question, i.e., why X causes Y and through what channels the causality takes place. In other words, what is the economic explanation which says that if we change X that would change Y. Cite few high quality papers that discuss these theories (seminal and the most recent ones).

Underlying theory here is that how the conventional auto industries that are manufacturing fossil fuel burning vehicles

are affected by the electric cars.

Already existing literature suggests that the electric car production is negatively affecting the conventional industries as

the time is passing by and till 2025 there will be a heavy shift as the production of electric cars will increase from 1 million

today to around 25 million.

What is (are) your specific hypothesis (hypotheses)?

Here please state each of the specific hypothesis that you want to statistically test. Each hypothesis should be very precise and clearly predict the direction of relation between the key variables (concepts) of interest.

Example:

H₁: Ceteris paribus, better disclosure standards leads to higher firm valuation.

Note: Here it clearly states that if we keep everything else constant (Ceteris paribus) there is a positive relation between the conceptsdisclosure standards and firm valuation. Thus, in the following equation if is firm valuation and is disclosure standard then we should expect β₁ to be positive in sign and statistically significant.

You can have more than one hypothesis.

H1: Ceteris paribus, better decision-making leads to higher firm valuation.

Y it=∝ +β_1 X_1t+〖β_2 X〗_2t+〖β_3 C〗_1t+⋯+〖β_n C〗_nt+ γ_t+δ_i+ϵ_it

H1: Electric vehicles will impact the sales of conventional automotive industry negatively

H0: Electric vehicles will not impact the sales of conventional automotive industry negatively

What is your specific contribution that is not there in the literature?

· Which area of literature is your study contributing [cite few high quality (4*) papers (see the web link below) related to this area of literature].

· Cite high quality (4*) papers that are closely related to what you are proposing and state how your study is going to be different from them.

· Explain what new we will learn from your study that we do not know from existing literature.

Note: This is the most important part of your proposal. Your contribution needs to be considered significant and material enough. The ‘contribution’ is considered ‘meaningful and significant’ if you can convincingly achieve any one or more of the following:

· It addresses a real world problem

· It significantly impacts knowledge in which you generate a novel question that is interesting and material enough to be investigated.

· It fills a significant gap (lack of understanding) in the literature

· Generates and advances theory

· Produces salient novel and unexpected results

· Addresses a hard-to-solve research issue

· Introduces new procedures/models

Following cannot be considered significant contribution:

If it merely reconfirms a theory/conjecture/question using different dataset or conducting the tests in a different context (jurisdictions/economic periods etc.) unless you can convince that the dataset and/or context is very unique and the investigation is producing (or expected to produce) something different or unexpected result than we already know.

Journal rating list:https://charteredabs.org/academic-journal-guide-2018/

The topic I have chosen addresses an upcoming real-world scenario and revolves around a concept that is very new.

with the help of relevant theories, I will compare the financial impact of electric vehicles on the automotive industry.

With the help of primary research and literature this topic could also fill in the lack of understanding of the topic

as the scenario is quite recent and in-depth research could further clarify certain problems that could be

relevant to the future.

The sector could either be affected in a positive way or it could possibly it could heavily impact the economy

which could result in a potential downfall for the sector. Machinery, expertise could be quite expensive for the

financial aspect of the business as it is quite niche.

We add to the ongoing debate of whether Eco motor cars deters or encourages the financial sector to do better

after being legalised.

Show the general regression equation with your dependent variable, key independent variable/s and the control variables.

Example model:

Is the dependent variable for ith firm and t year

Are independent variables of interest (you can have one, two or more).

Are control variables

Is the time fixed effect, is the unit (firms) fixed effects and is the error term

What data do you propose to use to test your hypothesis?

· Specifically define each of your variables and describe your data.

· Complete the variable description table below.

Global data plc

What method/s will you apply to test your hypothesis?

Explain why this method is ideal for empirical estimation of your econometric model.

What are the advantages of this method over others?

Is this method most recent and sophisticated enough to address the concern of various forms of endogeneity? Particularly, how does it deal with:

· Omitted variable bias and alternative explanations

· Reverse causality

· Sample selection bias

Read the following paper to understand the concept of these issues:

https://ecgi.global/sites/default/files/working_papers/documents/SSRN-id1718555.pdf

Provide evidence (citing papers or showing data) to your claims.

Difference-in-Differences (DiD) is shock based method whereby credible causality could be established using the shock
as exogenous event/shockthat triggers changes in the independent variable.
In this study, we use DiD approach to determine the effect of electric vehicles on the financial sector of the

automotive industry and its financial activities.

Variable description table

Sample size:For how long this data set is available and for how many firms. Clearly discuss the sample selection.

Frequency:Yearly, Quarterly or Monthly

Variable	Description What is this variable? What is the unit? If constructed, how it is constructed? What concept does it capture and why? What is source from which this was obtained?	Economic justification of including the variable (cite papers that use them).
Dependent variable/s (	Automotive industry
	Automakers	NA
	Production	NA
		NA
		NA
Key independent variable/s (	Electric vehicles




Control variables (	Vehicle prices

Cite all the key papers (8-10) in this proposal and place a reference list here.

Reference

Fama, Eugene F., Market Efficiency, Long-Term Returns, and Behavioural Finance (February 1997). Available at SSRN: https://ssrn.com/abstract=15108 or http://dx.doi.org/10.2139/ssrn.15108

Altuwaijri, Basmah, Investors’ Sentiment and the Stock Market Behaviour: An Empirical Analysis of the Saudi Stock Market (December 24, 2016). Available at SSRN: https://ssrn.com/abtstract=2889708 or http://dx.doi.org/10.2139/ssrn.2889708

Essays, UK. (November 2018). Comparative Study on CSR Behaviour Across Industries in Mauritius. Retrieved from https://www.ukessays.com/dissertation/full-dissertations/csr-behaviour-mauritius.php?vref=1

https://www.altenergymag.com/article/2019/03/the-impact-of-electric-cars-on-the-automotive-industry/30627

https://www.weforum.org/agenda/2019/03/the-dirty-secret-of-electric-vehicles/

Archive for category: Finance

Explain the background of the mentioned topic, using appropriate references. Clearly explain the objectives of your case study. This should include the details of which types of performance and risk you choose to study.

Identify the link between board independence and the quality of financial reporting among the 80 companies.

Assess cost concepts, management control processes of budgeting, revenue cycle management, working capital, time value analysis, capital budgeting analysis, and long-term financing decisions.

Conduct a case study on how Brexit and uncertainty of Brexit plan have affected a chosen UK commercial bank so far, in the context of performance and risk level.

Does the decision-maker’s responsibility to provide for his or her family outweigh his or her ethical responsibility to company stakeholders?

Collect and evaluate the data about stock prices of the assigned company for the last one year for the company and its major competitor.

Analyse the legal and organisational requirements for financial reporting in different business organisations.

Create the chart(s) using the stock price chart tools on the websites or Excel. Present the chart(s) in your project.

What is the underlying theory? Describe the underlying theory/ies that is directly related to your research question, i.e., why X causes Y and through what channels the causality takes place.

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