Business Finance Research Paper

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Research Paper 

 

 

Components 

 This project consists of two major activities: 1. Conduct secondary literature research (i.e. library, internet, etc.) 2. Write the research paper. 

 

Due Date and Time 

 Week 2: The introduction and background components of the paper are due by 11:59 pm on Sunday. Week 4: The literature review and analysis components of the paper are due by 11:59 pm on Sunday. Week 6: The abstract, conclusion, and reference components of the paper are due by 11:59pm Sunday. 

 The Project to be addressed by the Paper 

 You have just graduated from Shorter College’s MBA program and have secured a position as a fund manager for a well-known investment banking house. You have been given $300 million to manage/invest. The fund is a pension/retirement fund so its perspective is long term with low risk of loss of capital and a required return of 5% per annum. In order to reduce the investment risk you are instructed to make 12 investments of $25 million dollars each. Your challenge is to determine if the fund you are managing should invest $25 million dollars in the stock of the company you have selected for analysis. Your analysis, based on the concepts covered in this course, should address each of the following: 

 1. Business Strategy Analysis: Develop an understanding of the business and competitive strategies of the company. Which of the three generic competitive strategies does it utilize (low cost provider, differentiation, or focus). This should be covered in no more than three paragraphs. Do not spend time writing a history of the company. This is an analysis, not a history lesson. 

 2. Accounting Analysis: Do the accounting practices adopted by the company generally reflect and accurate picture of the economic performance of the company? (Did your research find any public announcements of restatement of earnings or other financial statements that would indicate the financial statements may be of dubious value? Check the SEC 8K filings). 

 3. Financial Analysis: Analyze and evaluate the financial ratios and cash flow measures of the company relative to its historical performance. For purposes of this project, a two- year reflection is sufficient. You should use at least 10 of the ratios including all four of the profitability ratios. Please be sure to speak to the ratios with respect to the meaning of their measurement and compare to other industry peers. 

 4. Prospective Analysis: Develop forecasted performance measures and list the assumptions associated with your forecast. List your assumptions and reasons for your forecast. You may also cite the works of other analysts who have published forecasted earnings for the time frame you are addressing. 

 5. Conclusion: Will you or will you not invest $25 million in this particular Company? Support your conclusion. Remember a negative conclusion is just as valid and valuable as a positive conclusion. 

 Writing the Paper 

 The following are general guidelines for format and organization: 

 

References:  The Research Paper should cite at least eight references that are properly described in APA format. These should include the Annual Report or SEC 10K filings of the company. 

 

Format:  Minimum of ten pages (including self prepared exhibits), with numbered pages. No binders please.  Typed, double spaced.  New Times Roman (i.e. business) font, 12 point. • Margins – 1.25 inches. 

 

 Include boldface headings and subheadings.  Note source citations as appropriate under APA guideline. 

 

Organization: • Title page – Name of paper, your name, course number and name, and date submitted. • Introduction – A brief statement of the purpose of the paper and an introduction of the company to the reader. • Background- A short synopsis of the company’s performance in the past two years. • Literature Review- Review literature germane to the company’s current competitive strategies, accounting practices, financial statement and ratio analyses, and future prospects.  Analysis- Summarize the literature review findings with respect to competitive strategies, accounting practices, financial statement analyses and ratios, and future prospects. • Conclusion/Recommendations – Should you invest or not invest the $25 million and why or why not. 

 Ideally, a rough draft of the paper should be ready by week six to allow time for necessary revisions. 

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