ACCT 5160
Daily Assignment 1
Market Efficiency vs. Valuation
The value of securities in the market comes from available information on
the financial health of a company. This information comes from accounting.
Market efficiency does not necessarily mean t
A5160 - GDuke Fall2013 Intro Lecture - slide 1
Chapter 1
Return to Fundamentals
What is this chapter about?
Value the set of methods for determining the
appropriate price to pay for a firm.
Fundamentals old school accounting but
first need to know EMH
Eff
A5160 - GDuke Fall2014 Lecture 3c - slide 1
Chapter 3 some gems
good accounting minimizes speculation so that one
can deploy the accounting to challenge speculation in
the market place. page 64
A valuation model should not be employed as a
method for dete
5
CAPITAL BUDGETING WORKSHEET
EquityAnalysisofaProject
INPUT SHEET: USER ENTERS ALL BOLD NUMBERS
INITIAL INVESTMENT
CASHFLOW DETAILS
DISCOUNT RATE
Initial Investment=
$50,000
Revenues in year 1=
Opportunity cost (if any)=
$7,484
Var. Expenses as % of Rev=
FINANCIAL PLANNING EXAMPLE
Background info
Bushman Airways
Historic Financial Statements
Current (2013 and 2012) financial statements
Balance sheet
Assets
Current
Plant, Property and Equip. (cost)
Accumulated Depreciation
TOTAL
Claims (Liabilities and Equ
TwoStageFCFEDiscountModel
Comparing DDM and FCFE Models: Two Stage Valuation
Inputs for FCFE Calculation
Current Net Income =
$100.00
(in currency)
Current Dividends =
$30.00
(in currency)
Current Capital Expenditures =
$75.00
(in currency)
Current Deprec
1. Current Ratio
Year
Current Assets
Current Liabilities
Current Ratio
#DIV/0!
#DIV/0!
#DIV/0!
2. Quick Ratio (Acid-Test Ratio)
Year
Cash & Equivalents + Short-term Investments + A/R
Current Liabilities
Quick Ratio
#DIV/0! #DIV/0! #DIV/0!
3. Cash Ratio
Ye
s13 section 1 Problem #1 Initial Analysis
The Grocery Store
Info
$ in thousands
Store cost
Depreciable cost
Cap ex
Depreciable PPE
Depreciation rate
Real growth rate
Inflation rate
Sales in year 1 at year 0 prices
Variable costs as a % of sales
Marketing
FocusInvestor.com: The Focused Few
A special note of thanks goes to John Kish, Devon
Everhart, Futile France, and Kuang-Yu Liu for their
assistance on this project.
Version 1.1
Decent overview of the workings of a DCF Model click here
Introduction to the
Dividend Discount Model
Assumptions
1. The firm is expected to grow at a higher growth rate in the first period.
2. The growth rate will drop at the end of the first period to the stable growth rate.
3. The dividend payout ratio is consistent with the exp
A5160 - GDuke Fall2014 Chapter 7 - slide 1
Chapter 7 value v. growth
project, executive summary
risk capm
idiosyncratic, systematic, unsystematic,
market, diversifiable and undiversifiable.
modern portfolio theory
book to market and price to earnings and
Executive Summary
Based on my calculations throughout the semester, only a minor amount of speculation is
factored into the stock price of TJX Companies, Inc. The market is optimistic about future
growth as indicated by a high price to earnings ratio. Sto
Megan Feltz
ACCT 5160
For the final report, I will be valuing TJX Companies, Inc. to determine whether or not
their stock is fairly valued. Much of the factors that I will use for valuation purposes have
already been discussed in previous daily assignment
Daily Assignment 9
Cash flows, net income, and comprehensive income
Chapter 9 returns to accounting and emphasizes historical returns. There is a focus on the
income statement and on the balance sheet. Consider in addition, two other issues: (1)
cash flow
Introduction to Financial Statement Analysis
What is Accounting?
AICPAs definition says the following: The Function of Accounting is to provide
quantitative information primarily financial in nature, about economic entities that is
intended to be useful
Daily Assignment 1
Estimating Cash Flows for TJX Companies
For your project company:
(1) find cash flows for last three years,
(2) estimate cash flows for next ten years,
(3) select a discount rate and compute the present value of next ten years of cash f
TJX P/E ratio
Daily Assignment 3 - due Thr 12 Sep 2013
For your project company:
(1) compute price/earnings ratio with current stock price,
(2) what does this number tell us about your company?
(3) what are limitations of this ratio?
(4) what are alternat
TJX Speculation in Stock Price
ACCT 5160
Minor Speculation in Stock Price
Question:
For your project company
1. Compare your valuation to stock price
2. Give a short description of how much speculation is in the stock price
One short page or a long paragr
Daily Assignment 8
TJX Required Rate of Return
For your project company:
1. Estimate the parameters of the equation from the end of chapter 7
2. Calculate r, the required rate of return.
3. What does this tell you about growth versus value for your projec
Daily Assignment 6
ACCT 5160
CAPM
To the right is given the closing Dow Jones Industrial Average index for twelve dates.
Find the closing stock price of your project company for the same twelve dates. Plot these points
with the Dow on the horizontal axis
Lat
36.8092188283
City
New York
Boston
Philadelphia
Charlotte
Atlanta
New Orleans
Miami
Dallas
Houston
Chicago
Detroit
Cleveland
Indy
Denver
Minneapolis
Phoenix
Salt Lake City
LA
SF
SD
Seattle
Lat
Long
40.7
42.3
40
35.2
33.8
30
25.8
32.8
29.8
41.8
42.4
41
A5160 - GDuke Fall2014 Lecture 4 - slide 1
Lecture 4 Mon 17 Nov 2014 (update)
Residual earnings
Abnormal earnings growth
midterm exam next Monday
DuPont (RoA and RoCE) if time permits
This is an update to the slides used in class. There
were two questions
Fina 4422 Spring 2014
Accounting Review Assignment
Fina 4422 Spring 2012 Assignment #2 Section #2
Accounting Review
Mary and friends start a company in 2015 wholesaling a new product in Colorado.
The following are summary transactions for Company M for 20