Firm analysis with data sources and calculations

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Industry1: Internet and Direct Marketing Retail ->Firm choice: Amazon

Industry2: Automotive ->Firm choice: Tesla

Introduction: 

Summarize industry overall and each of the firms in terms of financial characteristics:  major players, market share, value, profitability, growth, efficiency, liquidity etc.

Part a: Business models and Investment strategy

Comment on firms’ business models and investment strategies: what is the unique niche of this firm’s investment strategy?  What are the strength and weakness? 

Any challenges does this firm need to address? Any big changes in the investment for the next 5 years?

Part b:  WACC and Capital structure.

Calculate market value based leverage ratio, cost of equity, cost of debt, WACC for the each of firms in the past five years.  Please use original raw data if possible, such as historical stock price, financial statements information, etc. 

Conduct and evaluate each firm’s WACC through peer analysis (with each other) and trend analysis (check trend over past five year or more).

Find out how the firms raise capital:  debt borrowing, common stock issuance, or relying on internal retained earnings? Please answer this question using historical data.

Should the firm change the way it raises the capital in the future?

Part c: Dividend and payout policy.

Calculate and analyze firm’s payout activities in the past five years using historical data: EPS, DPS. Find and report firms’ share repurchase activities. Display time trend analysis and peer analysis.

Should firms change or follow payout policy in the next five years?

Part d: Corporate Governance:

Analyze firms’ corporate governance mechanism and executive compensation structure: board structure, any other corporate governance mechanism, compensation components/incentives, anti-takeover provisions. 

Are these effective in terms of monitoring executive officers? Are corporate governance mechanism effective? Conduct time trend and peer analysis. 

Grading:

+ lease use footnote or endnote when you need to use reference and cite complete resources in the attached reference section.

+ Measures and calculations should be based on original data such as financial statements, etc. Directly use calculated measures from web sources will lower your grade.

+ Missing Time trend ( 5 year or more) and peer analysis will lower your grade.

+ Missing comments and conclusions on each of the firm policies will lower your grade.

+ Copying analysis directly from the web or other sources would seriously affect your grade. 

+ The report should include at least the following sessions: cover page, title, introduction, main body, conclusion and the list of references.  

    • 24 days ago
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