Financial Research Report

Assignment: Financial Research Report Due: August 28, 2018 – by 6:00pm

Imagine that you are a financial manager researching investments for your client. Research the stock of any U.S. publicly traded company that you may consider as an investment opportunity for your client. Your investment should align with your client’s investment goals.

The assignment covers the following topics:

· Rationale for choosing the company in which to invest & Primary reasons why the selected stock is a suitable investment

· Client profile

· Ratio analysis

· Stock price analysis

· Recommendations

Refer to the following resources to assist with completing your assignment:

Stock Selection

· Forbes – “Six Rules to Follow When Picking Stocks

· CNN Money – “Stocks: Investing in stocks

· The Motley Fool – “13 Steps to Investing Foolishly

· Seeking Alpha – “The Graham And Dodd Method For Valuing Stocks

· Investopedia – “Guide to Stock-Picking Strategies

· Seeking Alpha – “Get Your Smart Beta Here! Dividend Growth Stocks As ‘Strategic Beta’ Investments

Market and Company Information

· U.S. Securities and Exchange Commission – “Market Structure


· Yahoo! Finance


· Mergent Online

· (Note: This resource is also available through the Learning Resource Center.)

· Seeking Alpha

·  (Note: Also available through the Android or iTunes App store.)

· Morningstar

· (Note: You can create a no-cost Basic Access account.)

· Research Hub – located in the left menu of your course in Blackboard.

Continued Below

Write a ten to fifteen (10-15) page paper in which you:

1. Provide a rationale for the stock that you selected, indicating the significant economic, financial, and other factors that led you to consider this stock.

2. Suggest the primary reasons why the selected stock is a suitable investment for your client. Include a description of your client’s profile.

3. Select any five (5) financial ratios. Analyze the past three (3) years (2015, 2016, & 2017) of the selected financial ratios for the company; you may obtain this information from the company’s financial statements. Determine the company’s financial health.

(NOTE: Ratios to be use: Current Ratio, Profit Margin, Return on Assets, Return on Equity, and Basic Earning Power Ratio)

4. Based on your financial review, determine the risk level of the stock from your investor’s point of view. Indicate key strategies that you may use in order to minimize these perceived risks.

5. Provide your recommendations of this stock as an investment opportunity. Support your rationale with resources, such as peer-reviewed articles, material from the Learning Resource Center, and reviews by market analysts.

6. Use at least five (5) quality academic resources in this assignment.

Note: Wikipedia and other similar websites do NOT qualify as academic resources.

Your assignment must follow these formatting requirements:

· Be typed, double spaced, using Times New Roman font (size 12), with 1” margins on all sides; citations and references must follow APA.

· Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date.

· The cover page and the reference page are NOT included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

· Critique financial management strategies that support business operations in various market environments.

· Analyze financial statements for key ratios, cash flow positions, and taxation effects.

· Review fixed income strategies using time value of money concept, bond valuation methods, and interest rate calculations.

· Estimate the risk and return on financial investments.

Paper set requirements are outlined below.

Paper MUST include:

Table of Content.

Abstract – No more than 1/2 page

· Provide a brief overview of the information to be provided in the report, including your professional position and company (equity) selected.

Section 1- Rationale for Stock Selection – minimum 2 1/2 pages

· Provide an overview of the company’s:

· History

· Primary products/services provided by firm

· Financial Overview: Include references and supporting data regarding the firm’s growth (Do NOT include financial ratios at this time).

· Include cited sources.

Section 2 – Client Profile – minimum 2 1/2 pages

Provide a brief description of the client, enabling you to support stock (equity) selection. Be careful that your description matches the risk level of the stock (equity) chosen.

· Age – 32 just made partner in law firm

· Marital Status – Single but engaged get married

· Profession – Lawyer

· Investment goals (ex. Growth, income, and some risk level)

Section 3 – Ratio Analysis – minimum 3 pages

· Identify five (5) financial ratios over the last three (3) years

· Apply trend analysis (last 3 years) to discuss the changes of each ratio.

· Discuss the positive and negative influences of each ratio.

· *If possible, compare each ratio to the industry average (not required).

Use the following ratios: Current Ratio, Profit Margin, Return on Assets, Return on Equity, and Basic Earning Power Ratio

Current ratio 2015 2016 2017
Current Asset/Current Liabilities
Current Assets
Current Liabilities

Profit Margin 2017 2016 2015


Net Income

Return on Assets 2017 2016 2015
Net Income/Total


Net Income
Total Assets

Return on Equity 2017 2016 2015
Net Income/Total

Common Equity

Net Income
Total Common


Basic Earning


2017 2016 2015


Total Assets

Section 4 – Risk levels – minimum 2 1/2 pages

Based on your findings from the ratio analysis and the risk structure identified by your client provide the following information (Do NOT assume there is NO risk):

· Provide information of the potential risks associated with the following:

· Macroeconomic risks: Domestic economy

· Firm specific risks

· Client risks (ex. employment loss, health, etc)

· Provide alternatives to reduce risks described above (example include but not limited to)

· Diversification

· Options (calls/puts)

· Insurance

· Other concepts

Section 5 – Recommendations – minimum 1 pages

· This is the section where you conclude your paper. NO new information is to be provided in this section.

· Point out the positive points discussed in the paper that point the reader to wanting to invest in the stock of your choice.

· The section should be positive in nature, however, if there was a strong negative point discussed in the paper you can point to it here as a caution.


Minimum of five (5) quality academic resources in APA format and cited in work.

Appendices – are photo copies form the Annual Report of 2107

(NOTE Financial information can be found at:

Copies of:

A. Consolidated Statement of Operations for the Walt Disney Company Annual Report 2017 – NYSE – Symbol DIS

B. Consolidated Balance Sheet for the Walt Disney Company Annual Report 2017

C. Financial Reporting for the Walt Disney Company Annual Report 2017

D. Comparison of Competitors and Financial Metrics for End of Year (EOY) for 2017

E. Continuation of Comparison of Competition for 2017 (3 columns)

Operating Metrics Stock Metrics
Return on Avg Assets Return on Avg Equity Beta

F. Graph of Disney Stock Performance – (last four (4) years by quarter)

G. Stock price ending price by month for Dec 31, 2014 – Dec 31, 217

(Should be 37 monthly entries)

Date Open High Low Close Ave Vol Adj Close*

· * Information may or may not be adjusted for dividend or splits