Company Performance Evaluation Assignment Essay
Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages
Company Performance Evaluation Assignment Essay
The term project involves selecting a company and writing at least a six-page fundamental research report on it. This project is due at the time of the final exam. The requirements are as follows:
The company selected should be in Value Line’s edition of the 1700 largest companies, and should have a strong single industry component. For example, General Motors is influenced by what the automobile industry does while General Electric is a conglomerate with no strong industry component. General Motors qualifies while General Electric does not.
The summary should consist of approximately seven sentences. The first sentence should indicate the fundamental outlook for the company. The final sentence or two should give the relative valuation for the company. The last sentence should give your conclusion – recommendation of buy, sell, or hold. A hypothetical example follows:
“General Motors, long the leading U.S. automobile manufacturer, is awakening from a ten-year slumber. Management is focused on building more attractive cars at a more efficient price. Earnings for this year and next are likely to climb 15% each based on continued gains in market share.
Over the longer term, I expect sales and earnings to grow 10% a year. The shares are currently selling at a 10 P/E which is only about 50% of the average company. I believe that a relative P/E of 75% is more appropriate and the upgrading in multiple plus the earnings gain point to an IRR of 25% per year over the target period. Consequently, I find the stock to be highly attractive and rate it a strong buy.”
Indicate here how, if appropriate, you have deviated from established thinking on a company. Examples of differences can include unit growth for industry or company, market share, growth in earnings, per share, relative stock valuation, etc. Be sure to indicate why you feel the way you do.
This section should provide industry background and outlook. It should deal with such questions as:
- What has been its past growth rate?
- What are the competitive threats to the industry?
- What is the future growth rate projected to be? Why?
- Is it an attractive industry to invest in?
High return on equity, etc.
It is understood that you may not be able to provide exact industry figures. If not, you should at least be able to project whether the growth rate will be slower than, equal to, or greater than that for the overall economy. Make sure you place a projected revenue growth figure that is relative to projected U.S. economic growth of 6% (3% real, 3% inflation).
This section should provide the background and outlook for the company. In addition to providing a description of the company and what it does, it should answer, among others, the following questions.
- What key products does the company make?
- What has been the past growth rate in revenues and profits?
- How has the past growth compared with that for the industry? Why?
- What are revenues and profits projected to grow at over the next year and the next five years? Justify your projections.
- Is this a high-quality company, a speculative one, etc.? Indicate and justify.
This section should deal with the financial situation for the company. It needn’t be described extensively. It should answer the following questions.
- Does this company have a strong balance sheet?
- Does this company have a strong cash flow?
This is a key section. It integrates growth rate with the price you pay for that growth. It determines whether a stock is attractive or unattractive. You must use the chart listed on the next sheet to help you arrive at your decision. For example, you shouldn’t have a chart figure of 2% IRR and recommend purchase. To support your decision, you should answer the following questions:
- How does your projected relative P/E compare with the current and past one for the company? Why?
- How does your projected P/E compare to the market? Justify above or below market relative P/E’s.
- Is the stock attractive? Why? Obviously, a stock will be attractive if it is projected to provide better than average stock market returns.
- How risky is this stock? Has that been factored into your recommendation and into the calculation of relative P/E? Use volatility of earnings, balance sheet strength, and beta coefficient to support your feelings about risk.
Your paper will be judged on the following criteria:
- Your understanding of the subject matter.
- The quality of your research. Please put in a bibliography and attach the company’s Value Line sheet
- The clarity of your opinion. A strong opinion when justified is preferred.
- The logic of your opinions based on the facts.
- Your ability to justify your projections and opinions. You should constantly be answering the question why you feel the way you do?
- Your ability to think independently of the research you are given and of prevailing opinion on a stock. For example, thinking contrary to public opinion on a glamour growth company and justifying your approach can count favorably.
- The appearance of your work in terms of organization, color, charts, tables, etc. can help.
Required Valuation Chart
Current Next Year Target Growth
Year Year 2 Year 3 Rate
Mkt P/E (3) X X (3) X
Rel P/E X X X
Co P/E X X X
Target Price (1) X X (2) X
IRR X X X X
The X means don’t fill in. Fill in only those items that don’t have an X. Notes:
(1) – Put in current price per share
(2) – Put in calculated price per share
(3) – Professor Altfest will provide the market P/E
Note – Use these statistics for the overall market.
Return on Equity – 17%
Growth rate in earnings per share – 6%
Overall annual total stock market return – 8
DO NOT USE TESLA
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper.
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