Essay
Identify two public corporations that belong to the same industry and are registered in the U.S. to issue shares. You will need to obtain the latest financial reports.
- Required: Assume that you buy 1,000 common shares of each of these companies on the first day of classes. During the course, you will be evaluating the behavior of the value in the market of these stocks, day after day, from the time of purchase until the seventh week of the course.
- Part A
- Once you obtain the Annual Reports of each of the selected companies, you must perform an analysis of the information contained in them. Here the analysis of financial quotients, trend analysis, and other tools that exist for the analysis and interpretation of financial statements will be used.
- You will need to identify what factors cause the price of these shares to fluctuate during this period of time in light of the information you have been collecting. You should apply efficient market theory and other information you have available to interpret this data.
- It should also include a graph where it presents the movement of the value of each share for the period. It will indicate in it those points where the change is more drastic and what happened that day that could cause that change.
- Part B
- At the end of the period, in addition to the information requested above, you must answer, in narrative form, the following questions for each of the companies:
- Describe the characteristics of the industry.
- Compare the results obtained for both companies and evaluate them in terms of the similarities or differences that they reflect with respect to other companies in the same industry.
- What was the price of the shares at the time of acquiring them?
- What was the highest price reached during the period? The lowest?
- Which of the two companies offered you better performance? How much was it?
- Was that performance predictable using the data obtained by performing the analysis of the financial statements for the selected year and the information obtained about the companies?
- What was the condition of the industry at the beginning of the period? In the end?
- What was the behavior of the actions during the period?
- Identify and explain what external factors may have affected the value of each company’s shares during the period.
- Identify and explain what external factors may have affected the value of each company’s shares during the period.
- How is the capital structure of each of the companies composed? If they have issued bonds, what is their rating?
- What is the presence of each in international trade? What percentage of your revenue comes from international sales?
- Compare the information presented in the Annual Reports and explain their similarities and differences in terms of content, including the opinion of the external auditors and the notes to the financial statements. Explain how you would use this information if you were (a) a potential investor in the company, (b) part of the company’s management.
- In light of the analysis carried out the financial theories studied, what recommendations would they make to companies to improve their performance or value in the market?
- At the end of the period, in addition to the information requested above, you must answer, in narrative form, the following questions for each of the companies:
Instructions:
- Contribute a minimum of 4 pages. It must include at least 4 academic sources, and formats be and cited in accordance with current APA regulations. Avoid plagiarism.
