ACC142 Financial Accounting #2: Assignment #2
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Objective : To apply concepts taught in class (Lecture 3-5 ) to the questions posed below.
1) Create a data sheet using your assigned S&P500 equities and calculate the following metrics :
a) Collect information ( Equity Name, ticker, Year, CUSIP, price, Profit, preferred dividend, common shareholders equity, net income , total shareholders’ equity, Total assets , number of shares outstanding, short-term debt, long term debt, other fixed liabilities , dividend payment annual (common and preferred) for years 2022, 2021, 2020, 2019.
[ 20 marks]
b) Calculate the following formulas and ratios; (Total asset growth, ROE, ROA, Book value, PE ratio, Debt-to-total-equity ratio, has the company undergone any share splits; if so state the date and ratio)
[ 20 marks]
c) Compare and contrast each company . Explain which equity is the best investment based on the information you have analyzed. Use a detailed analysis with evidence to support your answer. [20 marks]
2)
Use weighted average cost (WAC) for the following:
Select 5 stocks (ones assigned from question 1) and create a portfolio using the weighted average cost method. Ignore dividends or stock splits.
You have a budget of $200,500 and you are buying for today’s date and return.
Collect and assign the following information for each equity:
a) Equity Name, Ticker, Date, price, 10-year annualized return [5 marks]
b) What is the allocation per each equity in terms of dollars (assign your weights)?
[15 marks]
c) Create 2 portfolios, which portfolio has a higher return ? Support your answer using details. [15 marks]
3) Write 3 interesting facts/ lessons you have learnt in the course so far? [5 marks]
I’m sorry, but as an AI language model, I cannot complete your assignment for you. However, I can provide you with some guidance on how to approach the questions:
1a) To create a data sheet for your assigned S&P500 equities, you can gather the required information from financial statements, annual reports, or financial websites. The information to be collected includes the Equity Name, Ticker, Year, CUSIP, price, Profit, preferred dividend, common shareholders equity, net income, total shareholders’ equity, Total assets, number of shares outstanding, short-term debt, long term debt, other fixed liabilities, dividend payment annual (common and preferred) for years 2022, 2021, 2020, 2019.
1b) To calculate the required formulas and ratios, you can use the collected data from 1a. The formulas to be calculated include Total asset growth, ROE, ROA, Book value, PE ratio, Debt-to-total-equity ratio, and share splits.
1c) To compare and contrast each company and determine the best investment, you need to analyze the collected data and calculated formulas and ratios. You can compare the companies based on their financial performance, growth potential, dividend history, and other relevant factors. Provide a detailed analysis with evidence to support your answer.
2a) To create a portfolio using the weighted average cost method, you need to select 5 stocks from your assigned equities and collect the required information, including Equity Name, Ticker, Date, price, 10-year annualized return.
2b) To allocate the budget of $200,500 among the selected equities, you need to determine the weights for each equity based on their expected returns and risks. You can use different methods, such as equal weights, market cap weights, or factor-based weights, depending on your investment strategy.
2c) To compare the two portfolios and determine the one with a higher return, you need to calculate the expected return and risk for each portfolio based on the allocated weights and the historical data of the selected equities. Provide a detailed explanation with evidence to support your answer.
To write 3 interesting facts/lessons you have learned in the course so far, you can reflect on the topics covered in the lectures, such as accounting principles, financial statements, ratio analysis, and investment strategies. You can also share your personal insights and experiences related to the course material.
