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FIN/571: Corporate Finance Shareholder Analysis

Posted: May 13th, 2023

Week 4 Signature Assignment
Write a 2- to 3-page shareholder analysis in which you address the following:
• Evaluate economic conditions that influence company performance. Consider political, environmental, currency (money), global economics, and government influences on economic conditions.
• Compare market conditions from the previous year with the company’s performance for that same year. Conclude how the market conditions that year influenced the company’s performance, such as interest rates, Federal Reserve Bank monetary policy changes, or other market conditions relevant to the company you selected.
• Assignment Help by UK’s No.1 UK Essays Writing Service | Homework Help Online in UK Coursework Help – Analyze year-over-year performance from the past two years. Consider key metrics or ratios such as trailing PE ratio, forward PE ratio, price to book, return on assets, and return on equity in your conclusions.
Cite references to support your assessment according to APA Paper Writing Service by Expert Writers Pro Paper Help: Essay Writing Service Paper Writing Service by Essay Pro Paper Help: Essay Writing Service guidelines.
Need first-class papers? Get Fast Essay Writers US & urgent essay writing service Ca – Note template for you to do research to collect your thoughts on these possible cause- effect factors
Evaluate economic conditions that influence company performance. Consider political, environmental, currency (money), global economics, and government influences on economic conditions.

Possible/Probable Causes of Economic Conditions
Political Influences

Environmental Influences

Currency (money) Influences

Glcbal Economics Influences

Governmental Influences

Compare market conditions from the previous year with the company’s performance for that same year. Conclude how the market conditions that year influenced the company’s performance, such as interest rates, Federal Reserve Bank monetary policy changes, or other market conditions relevant to the company you selected.
Causes Effects
Interest rates

Federal Reserve Bank monetary policy changes

Other market conditions relevant to the company

Assignment Help by UK’s No.1 UK Essays Writing Service | Homework Help Online in UK Coursework Help – Analyze year-over-year performance from the past two years. Consider key metrics or ratios such as trailing PE ratio, forward PE ratio, price to book, return on assets, and return on equity in your conclusions.

Possible/Probable Causes Effects on Performance of the company
Trailing PE Ratio

Forward PE Ratio

Price to Book

Return on Assets

Return on Equity

References in APA Paper Writing Service by Expert Writers Pro Paper Help: Online Research Essay Help:

Assignment submission template in format of the rubric
Evaluate a variety of economic conditions that influenced the company’s performance [30%]

Relevant charts, graphs, photos that depict your cause-effect hypothesis

Comparison of the market conditions in the previous year to the company’s performance of the same year to conclude the influences of market conditions on performance [30%]

Relevant charts, graphs, photos that depict your cause-effect hypothesis

Assignment Help by UK’s No.1 UK Essays Writing Service | Homework Help Online in UK Coursework Help – Analyze year-over-year performance for the company prior to making conclusions in the analysis. [35%]

Relevant charts, graphs, photos that depict your cause-effect hypothesis

Recognize a need for a solution and thoroughly explore possible solutions [5%]

Relevant charts, graphs, photos that depict your cause-effect hypothesis

References
Shareholder Analysis

Introduction:

In this shareholder analysis, we will evaluate the economic conditions that influence company performance, compare market conditions from the previous year with the company’s performance, and analyze the year-over-year performance of the company. The company selected for this analysis is ABC Corporation.

Evaluate Economic Conditions:

Economic conditions play a crucial role in influencing company performance. Several factors can impact the economic conditions, including political, environmental, currency, global economics, and government influences.

Political Influences: Political stability and government policies can significantly affect a company’s performance. Changes in regulations, tax policies, or trade agreements can create opportunities or challenges for businesses.

Environmental Influences: Environmental factors such as climate change, natural disasters, and sustainability initiatives can impact industries differently. For example, companies in the renewable energy sector may benefit from favorable environmental policies and incentives.

Currency Influences: Fluctuations in currency exchange rates can affect a company’s competitiveness, especially for multinational corporations involved in international trade. Changes in exchange rates can impact the cost of raw materials, production, and sales in different markets.

Global Economics Influences: Economic conditions in different countries and regions can have a ripple effect on companies operating globally. Factors such as GDP growth, inflation rates, and consumer spending patterns can impact demand for products and services.

Governmental Influences: Government interventions, such as fiscal policies, monetary policies, and stimulus packages, can influence overall economic conditions. For instance, changes in interest rates set by central banks can impact borrowing costs for businesses and consumer spending.

Compare Market Conditions and Company Performance:

To understand how market conditions influence the company’s performance, we need to analyze factors such as interest rates, Federal Reserve Bank monetary policy changes, and other relevant market conditions.

Interest Rates: Changes in interest rates can affect borrowing costs, consumer spending, and investment decisions. If interest rates are high, it may discourage borrowing and lead to lower consumer spending, affecting the company’s sales.

Federal Reserve Bank Monetary Policy Changes: The Federal Reserve Bank’s monetary policy decisions, such as adjusting the federal funds rate or implementing quantitative easing, can impact market liquidity, borrowing costs, and investor sentiment. These changes can have implications for the company’s access to capital and investor confidence.

Other Market Conditions: Other relevant market conditions, such as industry-specific factors, competitive landscape, and consumer trends, can also influence the company’s performance. For example, technological advancements or changes in consumer preferences can impact sales and market share.

Assignment Help by UK’s No.1 UK Essays Writing Service | Homework Help Online in UK Coursework Help – Analyze Year-over-Year Performance:

Analyzing key metrics and ratios over the past two years can provide insights into the company’s performance.

Trailing PE Ratio: The trailing price-to-earnings (PE) ratio reflects the market’s valuation of a company’s earnings. A higher PE ratio suggests higher expectations for future earnings growth, while a lower ratio may indicate lower market expectations.

Forward PE Ratio: The forward PE ratio is based on estimated future earnings. It provides insight into market expectations for future performance. Comparing the forward PE ratio with the trailing PE ratio can indicate whether market sentiment has changed.

Price to Book: The price-to-book (P/B) ratio compares a company’s market value to its book value, reflecting the market’s perception of a company’s financial health. A higher P/B ratio may suggest market optimism, while a lower ratio may indicate undervaluation.

Return on Assets: Return on assets (ROA) measures a company’s profitability relative to its total assets. A higher ROA indicates better asset utilization and profitability.

Return on Equity: Return on equity (ROE) measures a company’s profitability relative to shareholders’ equity. A higher ROE indicates efficient use of shareholder funds and better returns.

Conclusion:

Economic conditions, including political, environmental, currency, global economics, and government influences, can significantly impact a company’s performance. Market conditions
_____________________

FIN/571: Corporate Finance

Week 3 Assessment Prep: Finance Report
The following chart is a comparison of Apple’s financial reports from fiscal year 2020 with the market conditions from the same year:
Metric Fiscal Year 2020 Market Conditions
Revenue $274.5 billion COVID-19 pandemic causing economic uncertainty, recession fears, and volatile markets
Net Income $57.4 billion Low-interest rates due to Federal Reserve Bank monetary policy to support the economy
Cash and Cash Equivalents $193.8 billion Increased demand for safe-haven assets due to economic uncertainty
Earnings per Share $3.28 Declining interest rates leading to lower borrowing costs for companies
Gross Margin 38.2% Increased competition in the technology sector leading to lower margins
R&D Expenditures $18.7 billion Increased investment in research and development due to competition and technological advancement
Apple’s financial reports for fiscal year 2020 were strong despite the challenging market conditions caused by the COVID-19 pandemic. The company’s revenue increased by 5.5% compared to the previous year, driven by strong sales of iPhones, iPads, and wearables. The company’s net income also increased by 3.9%, driven by strong revenue growth and disciplined cost management.
The market conditions during the fiscal year 2020 were marked by the COVID-19 pandemic, which caused significant economic uncertainty and led to recession fears and volatile markets. The Federal Reserve Bank responded by implementing low-interest rates and other monetary policies to support the economy. These policies led to lower borrowing costs for companies like Apple, which helped to boost their net income.
In addition, there was an increased demand for safe-haven assets due to the economic uncertainty, which led to Apple’s cash and cash equivalents increasing to $193.8 billion. The gross margin was impacted by increased competition in the technology sector, which led to lower margins. However, the company continued to invest in research and development, spending $18.7 billion to maintain its competitive edge in the market.
Overall, Apple’s financial reports from fiscal year 2020 demonstrate the company’s ability to navigate challenging market conditions and continue to deliver strong financial results. The company’s focus on innovation and disciplined cost management helped to mitigate the impact of the COVID-19 pandemic and maintain its strong financial position.

References
Apple Inc. Annual Report 2020. (2020). https://www.apple.com/newsroom/pdfs/FY20-Form-10-K.pdf
Federal Reserve Bank of St. Louis. (2020). Federal Funds Rate – Historical Data. https://fred.stlouisfed.org/series/FEDFUNDS

Tags: Corporate Finance, FIN/571: Corporate Finance Shareholder Analysis

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