Final Exam Sutdy Guide fall08

Final Exam Sutdy Guide fall08 - sea,^ q tT,l iG t,1 4...

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Unformatted text preview: ' - sea,,^.+,--'. q , tT, ,l iG) t/, ,1 , 4 I.tCJ"^ [. it''' '\l'i. 4YL a?,^q l{Z Business 172A Investment Analysis Final Exam Study GuideChapter 12: Company Analysis: Historical RecordMajor goal of company analysis:to forecastthe quantity & quality of future earningsCompany Analysis (a) Parts:1. description of company's businesses & properties, includes historical date & details @senior management2. financial material including capitalization, record of earnings, & dividends for several,complete business cycles, flow of firnds analysis, & analysis of recent balance sheets &income statements3. Past stock price history & volume data4. Prospects for company in form of projected future hnancial statements & analysis ofinvestment merits in securitySecurity Analysis Report Should Address:1. quality of company's managementa. Nature of management: definition of management conveys two important ideas-managers are responsible for attainment of various organizational objectives botheffectively(degree to which company achieves its goals) & efficiency (amount ofresources required to produce a certain level ofoutput ofa good or service)(4) basic functions-Planning: setting goals for organization & identifliing tasks & resourcesnecessary to obtain goalsOrganizing: assigns tasks to various parts of organization & allocates resourcesw/in. organizationLeading: motivation of employees to achieve goals of organizationControlling: monitoring performance(3) skills must have: technical, conceptual, & humanb. Evaluating Management: (Questions to ask)What are the age & experience of characteristics of senior management?How efective is the company's strategic planning?Has the company developed &followed a sound marketing strategt?Has the company effectively & numbly adapted to changes in the environment?Has management maintained or improved the company's overallcompetitive position?Has the company grown in an organized, sustainable manner?Has the company beenfnanced adequately & appropriately?Does the compcmy have good relations with employees?Wat is the company's public image?How ffictive is the company's board of directors?2. competitive position of company within its industry: Why is it so important & should onealways restrict investnent choices to industry leaders, never assume that a company willmaintain its competitive position din. its industry in the future. Analyze gowth rate insales, profit margin & return on equity, a longer & broader product line indicates a morecompetitive position, a sign of strong company is new products introduced, producesefficiently, price leader holds dominant competitive position, & exploits patents orproprietary technology3. analysis of company's financial statements: make sure numbers are real, not made up....
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This note was uploaded on 09/08/2010 for the course BUS 172A at San Jose State.

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Final Exam Sutdy Guide fall08 - sea,^ q tT,l iG t,1 4...

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