Both descriptive and calculation type questions You will be expected to analyse

Both descriptive and calculation type questions you

This preview shows page 10 - 25 out of 88 pages.

Both descriptive and calculation type questions You will be expected to analyse and interpret the results of calculations No multiple choice Will cover all weeks (entire subject) You must score at least 50% in the final exam to pass the subject
Image of page 10
Assessment information Group assignment due week 11 (25%) Group work Analysing and an ASX-listed company Both hard copy and Turnitin submission are required plagiarism will be strictly dealt with
Image of page 11
Group Assignment 12 Case study (30 marks): 4-6 group members Groups will build an excel application (based on a provided excel template) and write an equity research report on a stock.
Image of page 12
Subject Information Financial statement analysis Critically evaluate financial statements as sources of information Extract useful information from financial statements Use analytical tools to evaluate a company’s financial performance & position Use financial statement information in credit & equity investment decisions
Image of page 13
Overview 14 Why are you here? Importance for degree? Employment opportunities? You’re thinking about building your investment portfolio?
Image of page 14
Image of page 15
16 Charlie Munger Warren Buffett Benjamin Graham
Image of page 16
Write a research report 17
Image of page 17
Or you really know about a lot of theories but never used them… 18 Boundary of firms Relational Contracting (within and between firms) Vertical Integration Governance structures Corporate strategy Financial accounting And, you know, mean-variance portfolio selection, DCF, WACC …
Image of page 18
Outline 19 UoS outline Schedule Assessments Introduction to financial strategy Facebook case study P/E ratio The 72 rule The equity premium Basics of research report
Image of page 19
Warren Buffett - The Book that Changed My Life 20 Let’s watch the video together. The book that changes Warren Buffet's life
Image of page 20
Is Facebook overpriced? (P/E approach) 21 P/E ratio indicates how market evaluates a company with respect to its current earning power. You may (roughly) interpret it as: for how many years the company can earn back its current price. P = market price per share E = earnings (net income or profit) per share
Image of page 21
Is Facebook overpriced? (2012) 22 Facebook’s P/E ratio in August, 2012 was 114 . Then, it needs 114 years to earn its current price (suppose current earning level will not change). Does that mean Facebook was overpriced? To answer this question, one important question is to figure out if Facebook can significantly lift its current earning power . Otherwise…
Image of page 22
Facebook vs. Google and Apple (2012) 23 Is Facebook more powerful than Google and Apple? By comparing to Google’s and Apple’s P/E ratios Google P/E = 20 Apple P/E=15 I would suggest that current P/E ratio for Facebook is still far too high.
Image of page 23
Price Target of Facebook? (2012) 24 We would like to work out the price level if Facebook has P/E ratio at the average value of those of Google and Apple ((20+15)/2 = 17.5). Current price of Facebook is $21 (as of August, 2012). If the P/E = 17.5, the price should be : 21 * 17.5 / 114 = $3 (per share).
Image of page 24
Image of page 25

You've reached the end of your free preview.

Want to read all 88 pages?

  • Spring '17
  • Balance Sheet, Generally Accepted Accounting Principles

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes