Financial Analysis (Other (Not Listed) Sample)
study the financial statements and other information for two public companies in the same sector (e.g. General Motors and Ford), listed on an American stock exchange (Nasdaq, NYSE, American Stock Exchange) and compare them. The analysis will coverdifferent aspects of the two companies, and will be comparable. The companies you select must have a non-negative net worth (i.e. assets in excess of liabilities) and must have been profitable, at least for most years.You are invited to answer all the questions below and provide comments. Most information is available on websites (marketwatch.com, finance.yahoo.com, investing.com etc) and in the companies' annual reports. All the information is accessible online and free of charge.You can select the companies you are interested in from a large list of shares at the link below.https://stockmarketmba.com/stocksintherussell1000.php?pa?t?ste to the following questions:1. Analysis of shares and index on the stock exchange. Show the market prices and percentage % annual changes in the shares of the two companies in a table or graph (separately for each company and the S&P500 index) for the last five years.Compare between the two companies and the index in terms of significant changes and try to explain significant changes in the prices of the two shares and the general index. For this purpose, use news, reports and announcements that have been published, concerning each company and the market in general.2. Calculate and tabulate the average annual return for the share prices of the two companies and the general index over the five-year period, and make comparisons and comments. For this purpose, use the FV=PV(1+r)N formula, where you calculate the return (r) for each variable.3. Analyse the return on equity (net income/capital) for each company and compare them in a table for the last five years, with comments. Explain why the return is high orlow. What factors affect the equity ratio? Explain!4. Analyse the sources of financing of the two companies over the last five years. Describe the sources of financing of the two companies for the last five years, how they were five years ago and how they are today (loans, bonds, shares, profits, etc.) Compare and comment. The data can be found in the balance sheet of each company5. Calculate the debt ratio (total liabilities/total assets) of each company for the last five years in a table and make comparisons and comments. Explain whether the debt ratio is increasing or decreasing over the five years and whether each company is able to service its debt or is experiencing problems
. Calculate the Price/Earnings ratio (Price per Share/Earnings per Share) for the two companies for the last five years in a table. Why it is high or low. Could a company have a high Price to Earnings ratio without a particularly good outlook for the future?7. Analysis of sales (Sales) and earnings before interest, tax, depreciation and amortisation (EBITDA) for the last five years, in a table or graph. Plot the two variables in a graph or table, where the two variables start from 100; that is, the base year will be the first year of the five-year period.Investigate whether there is any relationship between the two variables over time, i.e. whether they move together or not, and explain why.8. Analysis of earnings from operations (income statement) and cash from operations (net operating cash flow from the cash flow statement), for each company for the last five years. Plot the two variables in a graph or table, both starting at 100
General Motors Company and Fold Motors Company Financial Analysis
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Study the financial statements and other information for two public companies in the same sector (e.g. General Motors and Ford), listed on an American stock exchange (Nasdaq, NYSE, American Stock Exchange) and compare them. The analysis will cover different aspects of the two companies, and will be comparable. The companies you select must have a non-negative net worth (i.e. assets in excess of liabilities) and must have been profitable, at least for most years. You are invited to answer all the questions below and provide comments. Most information is available on websites (marketwatch.com, finance.yahoo.com, investing.com etc.) and in the companies' annual reports. All the information is accessible online and free of charge. You can select the companies you are interested in from a large list of shares at the link below. https://stockmarketmba.com/stocksintherussell1000.php?pa?t?ste
to the following questions:
1 Analysis of shares and index on the stock exchange. Show the market prices and percentage % annual changes in the shares of the two companies in a table or graph (separately for each company and the S&P500 index) for the last five years. Compare between the two companies and the index in terms of significant changes and try to explain significant changes in the prices of the two shares and the general index. For this purpose, use news, reports and announcements that have been published, concerning each company and the market in general.
Ford Motor market price and percentage % annual changes in the shares the last 5 years
Year
Average stock price
Annual % Change
2022
14.5994
-42.19%
2021
13.7166
137.50%
2020
6.7799
-3.88%
2019
8.5218
29.61
2018
8.9810
-34.29%
General Motor market price and percentage % annual changes in the shares the last 5 years
Year
Average stock price
Annual % Change
2022
40.0883
-42.36%
2021
55.6317
40.80%
2020
30.2721
15.21%
2019
36.0907
14.01%
2018
34.8391
-15.05%
In the Year 2018 and 2022 both companies had a negative S&P500 index. Also, in 2020 Fold Motors Company had a negative S&P500 index (GM | General Motors Co.. financial statements - WSJ 2023) (F | Ford Motor Co.. financial statements - WSJ 2023). This negative Index may be due to;
* Poor financial performance: If a company's revenues, profits, or other financial indicators are performing poorly, this could lead to a decline in the stock price and a negative return for the years (Augustyn et al., 2021).
* Market conditions: If the overall market (as measured by the S&P 500 index) was performing poorly, this could also lead to a negative return for the company's stock.
* Political or economic uncertainty: If there is uncertainty about the political or economic environment, this could also lead to a decline in the stock price.
* Other company-specific factors: There could also be other company-specific factors that contribute to a negative return for the year, such as management changes, legal issues, or other internal factors (Augustyn et al., 2021).
There are many potential reasons why the two companies S&P 500 index is positive in 2021 and in 2019. Some possible factors that could contribute to a positive annual S&P 500 index for the companies include strong financial performance, increased demand for the company's products or services, favourable market conditions, and positive news or events related to the company (AREAS 2018). Additionally, the company's management and leadership, as well as the overall state of the economy, can also have impacted the companies’ S&P 500 index.
2 Calculate and tabulate the average annual return for the share prices of the two companies and the general index over the five-year period, and make comparisons and comments. For this purpose, use the FV=PV(1+r)N formula, where you calculate the return (r) for each variable.
Fold Motors Company
For 2018
PV (present value) = $10.4890 (initial price of the share)
FV (future value) = $6.7994 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r)^N
$6.7994 = $10.4890 (1+r)^1
r = ($6.7994 /$10.4890 - 1) = -3.5 or -35%
For 2019
PV (present value) = $7.0216 (initial price of the share)
FV (future value) = $8.8129 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r) ^N
$8.8129 = $7.0216 (1+r) ^1
r = ($8.8129 /$7.0216 - 1) = 0.26 or 26%
For 2020
PV (present value) = $8.9266 (initial price of the share)
FV (future value) = $8.4706 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r) ^N
$8.4706 = $8.9266 (1+r) ^1
r = ($8.4706 /$8.9266 - 1) = -0.051 or -5.1%
For 2021
PV (present value) = $8.2104 (initial price of the share)
FV (future value) = $20.1177 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r)^N
$20.1177 = $8.2104 (1+r)^1
r = ($20.1177/$8.2104 - 1) = 1.45 or 145%
For 2022
PV (present value) = $21.0863 (initial price of the share)
FV (future value) = $11.6300 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r)^N
$11.6300 = $21.0863 (1+r)^1
r = ($11.6300/$21.0863 - 1) = -0.45 or -45%
Average Annual return for the five years period is as follows;
(-35% + 26% + -5.1% + 145% + -45%)/ 5
= 17.18%
year
Annual Return %
2018
-35
2019
26
2020
-5.1
2021
145
2022
-45
Average Annual Return
17.18%
General Motors Company
For 2018
PV (present value) = $ 37.8833 (initial price of the share)
FV (future value) = $ 31.5583 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r)^N
$ 31.5583= $ 37.8833 (1+r)^1
r = ($31.5583/$ 37.8833- 1) = -0.17 or -17%
For 2019
PV (present value) = $ 31.7376 (initial price of the share)
FV (future value) = $ 35.9807 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r) ^N
$ 35.9807= $ 31.7376 (1+r) ^1
r = ($35.9807/$ 31.7376- 1) = 0.13 or 13%
For 2020
PV (present value) = $ 36.7475 (initial price of the share)
FV (future value) = $ 41.4522 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r) ^N
$ 41.4522= $ 36.7475 (1+r) ^1
r = ($41.4522/$ 36.7475- 1) = 0.13 or 13%
For 2021
PV (present value) = $ 40.3273 (initial price of the share)
FV (future value) = $ 58.3655 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r)^N
$ 58.3655= $ 40.3273 (1+r)^1
r = ($58.3655/$ 40.3273- 1) = 0.45 or 45%
For 2022
PV (present value) = $ 60.8941 (initial price of the share)
FV (future value) = $ 33.6400 (final price of the share)
N (number of periods) = 1 (one year)
FV = PV (1+r)^N
$ 33.6400= $ 60.8941 (1+r)^1
r = ($33.6400/$ 60.8941- 1) = -0.45 or -45%
Average Annual return for the five years period is as follows;
(-17% + 13% + 13% + 45% - 45%)/5
1.8%
Year
Annual Return %
2018
-17
2019
13
2020
13
2021
45
2022
-45
Average Annual Return
1.8%
Generally, Fold Motors had a higher Average Annual Return of 17.18% compared to general motors, which had an Average Annual Return of 1.8%.
There are many factors that may have contributed to Fold Motors having a higher average annual return than General Motors Company. Some possible reasons include the following:
* Better financial performance: A company with stronger financials, such as higher profits, stronger cash flow, and lower d...
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