SCHOOL OF BUSINESS STUDIES
DIPLOMA IN BUSINESS STUDIES(BANKINGAND FINANCE)
ABMF 3043 INVESTMENT & FINANCIAL ANALYSIS
TITLE: FUNDAMENTAL ANALYSIS OFACOMPANY
LISTED ON BURSA MALAYSIA
LECTURER: LEE HOCK GE
Name Student ID Signature
Aw Yong Li Wei 14PBD02557
Cheah Huey Shan 14PBD07187
Cheah Shu Ki 14PBD07227
Chua Wan Ling 14PBD03480
Jordan Tan Chyi Horng 14PBD04482
Lee Shei Wen 14PBD01641
Table of Contents
No Title Pages
1. Introduction
Company Background 1-2
2. Top- Down Approach 3
3. Economy Analysis:
(a) Gross Domestic Product (GDP)
(b) Business Cycle
(c) Interest Rate
(d) Inflation
(e) Unemployment Rate 3-7
4. Sector/ Industry Analysis:
Pioneering Stage
Expansion Stage
Stabilization / Maturity Stage 8-9
5.
Company Analysis:
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Governments use economic analysis to determine tax rates and assess the financial condition of the country. Economic analysis is refer to the understand economic factors that affect stock price such as Gross Domestic Product (GDP) growth, inflation, interest rate and business cycle.
i. Gross Domestic Product (GDP) Growth Diagram 2: Malaysia GDP Annual Growth Rate Gross Domestic Product (GDP) is the most popular statistics that used to measure the size of the economy. The bigger the value of GDP, the bigger the size of the economy. It is the total market value of all goods in the hands of the final user or ultimate consumer and services produced yearly within the boundary of the country. Real GDP is used to compute the economic growth.
Economic growth is surveyed by the improving of the yearly percentage of real GDP. Thus, the increasing of production capacity more than the price level will affect the economic growth to the positive way. Whole community is enjoying for their goods and services to realized higher standard
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Reasons on Selecting the Stocks as my Investment
First of all, Maxis Berhad has a constant growth of holding company, its income, and also, the ability to pay the dividends as well, it is dependent upon the dividends and a distribution that has receives from its subsidiaries. The payment of dividends or other distributions by the subsidiaries of company will depend on their operating results, financial condition, capital expenditure in nature , plans and other factors that maybe either respective board of directors deem as relevant. Dividends may only be paid out of distributable reserves. Maxis Berhad offers mobile, line of fixed, and globalization telecommunications services in our country. Constant growth can be seen through the yearly financial profits in between 2010 until 2014.Through this financial summary we can clearly to see that the Maxis Berhad is under the control in terms of its financial performance as
The GDP is manly used to measure the greatness of the economy. It tells the total dollar value of all goods and services produced over a specific time period. GDP is calculated by either the income approach or by the expenditure method. The income approach is calculated by adding up the total compensation to employees, gross profits for firms, and taxes, less any grant.
Economy is the theory of trading something, in most cases, a currency of sorts, for a service or a good. The United States’ economy was first invented around the creation of the colonies. When the colonies declared independence from Britain, a more formal economy was developed to what it is today.the new world progressed from a small marginally successful economy to a large industrial economy by the late 18th century. Starting at trading of furs, we brought our newly found economy to light. This gave us a gate to the new superpower we didn 't know yet know about.
This was done with the help of a weighted average unlevered beta, the market risk premium and the risk free rate. The risk free rate of 5.85 % has been acquired from the 30 year T bond rates. The beta was found out using the three other comparable companies and their unleveraged betas. With help of all these values the discount rate of 10.847% was calculated which contributed in discounting the cash flows and obtaining the present value of cash flows. The continuing value for Calaveras has been estimated using the key value driver formula which was found out to be $ 7019.715.
Companies all over the globe will experience some sales and profit decrease. Home Depot in the growing housing industry benefited greatly from the houses being built. The accounting concept portrayed in this situation for home depot is called operating leverage. Operation leverage is when managers view a small change in revenue and magnify it to dramatic changes in revenue (Edmonds, Tsay, & Olds, 2011). With a decrease in the market for construction materials, Home Depot is experiencing a 3% decrease revenue and a 21% decrease in profitability.
Outline the similarities and differences between the Single Index Model (SIM) and the Capital Asset Pricing Model (CAPM). Justify which of the two models makes a better assessment of return of a security (25 marks). To reduce a firm’s specific risk or residual risk a portfolio should have negative covariance or rather it should have no variance at all, for large portfolios however calculating variance requires greater and sophisticated computing power. As such, Index models greatly decrease the computations needed to calculate the optimum portfolio. The use of such Index models also eliminates illogical or rather absurd results.
In order to, analyze the company’s performance, we will closely focus on financial performance which is the degree to which financial objectives have been accomplished. This process measures the result of the overall financial health of the company over a period. The most efficient and effective metrics we choose were the improving operating income and return on equity and increasing sales, earning per share. Firstly, our sales have gradually increased in every single period, despite the minor changes in initiatives.
Case Study 1: Banc One Corporation Asset and Liability Management Gizem Akkan So basically, the main problem Banc One Corporation has falling share prices as it is written from a 48 ¾ to 36 ¾ in April 1993. The basic reason behind this decline is that its exposure to derivative securities. This decline in share prices raises concerns among the Banc One’s Investors as well as its analysts since they are uncomfortable with huge amount of derivative usage particularly swaps. They think they are not able to measure risks they exposed so this create uncertainity about the firm’s financial stability.
1. Case: Crown, Cork and Seal in 1989 (a) Perform an industry analysis of the U.S metal can industry in 1989.Define the industry. Analyze the effect of buyer and supplier power, competition, barriers to entry, complements and substitute for the industry. Summarize your assessment of industry’s attractiveness. Is this an industry in which the average metal company can expect an attractive return over the long run?
If the market is in recession the demand can be expected to be on the lower side whereas in case of boom condition, demand will definitely be much higher. Competitors: The strategies of the competitors over the past periods should be analysed in depth and should be used to fine tune the forecast for next
This compare and contrast paper will explore the history and development of these two corporate giants; conduct a strategic and financial analysis of each company; and compare and contrast the executive leadership, corporate strategy, acquisitions and divestments of each. The future direction of the companies over the next three to five
MACRO ENVIORNMENT: Macro environmental factors are those irrepressible external factors that affect the company’s decision making process. These factors include demographic, socio-cultural, economic, political-legal and also the natural factors. Demographic factors – Demographic factors include age, sex, religion, location, thickness, occupation etc. Apple Company has 217 stores in United Stated and about 273 stores worldwide.
1. What corporate diversification strategy is being pursued by Sany? What evidence do you have that supports your position? The Sany Heavy Industry Co. Ltd might be a company pursuing a low level of diversification which uses a single business corporate strategy.
Outline the similarities and differences between the Single Index Model (SIM) and the Capital Asset Pricing Model (CAPM). Justify which of the two models makes a better assessment of return of a security (25 marks). To reduce a firm’s specific risk or residual risk a portfolio should have negative covariance or rather it should have no variance at all, for large portfolios however calculating variance requires greater and sophisticated computing power. As such, Index models greatly decrease the computations needed to calculate the optimum portfolio. The use of such Index models also eliminates illogical or rather absurd results.
Business PESTLE Analysis Task Kieran Kikillus Pick n Pay Person Addressed: Gareth Ackerman, chairman of Pick n Pay Title of Report: Analysis of External Factors Affecting Pick n Pay Terms of Reference The chairman of Pick n Pay, Gareth Ackerman has requested a report which is designed to analyse the macro environment in which the business operates to identify any potential threats, as well as to formulate appropriate strategies to prevent any of these threats from crippling the business unexpectedly.
Maxis reputation has been built around their quality network and superior customer service. Due to high standards and expectations that come with the Maxis brand it is not without reason that customers are more demanding of Maxis. As a result, Maxis always think that their business on being the customer 's first choice. Capital requirement usually build up a firm which is the high capability to compete in the industry. However, telecommunication is a high competitive industry in order to gain large market share.