FIN469 Investment Analysis Deliverable Template Fall 2018
Please answer – and provide the data to substantiate – the following items in your deliverable for your assigned company. This project’s main deliverable should not exceed eight pages, front & back, 12 font, double spaced (although you may include an appendix of any length or form necessary).
To simplify this assignment, you may want to follow the following template ….
This project is due in hard copy the Friday before the November, Thanksgiving break. Please, do not wait until the last days of that week to begin this deliverable as I believe you will find it a little much to complete in a single setting.
- Download and provide the last five years income statement.
Download and provide the last five years cash flow statement.
Download and provide the last five years balance sheet.
For these last five years, provide the adjustments for the free cash flow components needed for the Discounted Cash Flow model.
- Forecast the next five years income statement, providing any line item explanations that are material.
Forecast the next five years cash flow statement, providing all line item explanations.
For the next five year forecast, provide the adjustments via your forecast for the needed cash flow components to the DCF model.
- Provide a DCF model based valuation range, explaining in brief, your inputs. This range will serve as an “absolute valuation” metric.
- Provide 10 year price/earnings, price/book, and price/sales charts, commenting on today’s relative valuation. This will serve as a “relative valuation” metric.
- Discuss the important “systematic factors” (inflation, interest rates, industrial production, etc.) that you believe will drive this security’s return, explaining why you chose to include the ones that you did. You may wish to present a simply regression to prove your point (hint)….
- Discuss the important “fundamentals” (profitability, sales growth, cash flow dynamics, etc.) that you believe will drive this security’s return, explaining why you chose the ones that you did. Comment also on the “embedded expectations” that you believe the market is focusing on (please recall that any analysis is about understanding the embedded expectations in the market price).
- Given your analysis to this point, would you recommend a buy or a sell on this equity security? Explain your recommendation in a “summary paragraph” that you would provide as an executive summary at your employer.
- Provide the duration, convexity, and realized yield to maturity of any fixed income instrument of this company that matures after 2025. (please be sure to provide your inputs / analysis as well as a brief discussion of any assumptions)
- Provide the Black-Scholes valuation of any option of this company that expires within the next 9 months. (please be sure to provide your inputs as well as a brief discussion of your volatility measure) Briefly compare your valuation to that last price traded in the market.