Applied Business Project 1

M I S 1 1 1 - C o m p u t e r s a n d t h e I n t e r n e t w o r k e d S o c i e t y

Applied Business Project 1 Guidelines Eller College of Management This document contains instructions on completing ABP-1 for MIS 111 Initial Release: 29 August 2022

Fall 2022

On-time Deadline for Completing Submission of ABP-1

Wednesday, September 14, 2022 by 11:59pm

The D2L submission process (i.e., the upload of your report must finish and a confirmation message displayed by D2L) must be

completed by 11:59pm local Tucson time (MST or UTC/GMT-7) by the assignment due date. This is a hard deadline and no

extensions are offered to the on-time assignment due date, so be sure to plan your work and submission attempts accordingly.

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Table of Contents Assignment Overview ........................................................................................................................... 4

Fundamental, Technical, and Quantitative Analysis Overview ............................................. 4

Finding Your Required Assigned Company .................................................................................. 5

No Cost Access to Data Sources for Analysis ................................................................................ 5

Task 1: Company Profile ..................................................................................................................... 6

Important Note on Task 1 Sample Figures .......................................................................... 6

Task 1.1: Company Governance .................................................................................................. 6

Task 1.2: Financial Profile ............................................................................................................. 7

Task 1.3: Investment Assessment............................................................................................... 8

Task 2: Fundamental Analysis .......................................................................................................... 9

Important Note on Task 2 Sample Figures .......................................................................... 9

Task 2.1: Financial Metrics ............................................................................................................ 9

Important Conventions on Reported Financial Report Data..................................... 10

Task 2.2: Media Perspectives .................................................................................................... 12

Section 3: Quantitative Analysis.................................................................................................... 12

Important Note on Task 3 Sample Figures ....................................................................... 12

Task 3.1: Stock Price Analysis ................................................................................................... 13

Specific requirements for each column in Table 4: ............................................................ 14

Task 4: Technical Analysis .............................................................................................................. 18

Important Note on Task 4 Sample Figures ....................................................................... 18

Task 4.1: Financial Metrics Needed to Calculate Financial Ratios ............................... 18

Task 4.2: The Acid Test ................................................................................................................. 19

Task 4.3: Working Capital Ratio ................................................................................................ 19

Task 4.4: Price to Book Ratio ...................................................................................................... 19

General Applied Business Project Report Guidelines ............................................................ 21

Required Business Report Formatting Elements ............................................................... 21

Citing Sources Required for Discussion Questions, Tables and Figures .................... 21

Major Business Report Penalties ................................................................................................... 22

Not using the ABP-1 report template ...................................................................................... 22

Not submitting your report in PDF file format .................................................................... 22

Not using your assigned company ............................................................................................ 22

Not including the E-Tegrity statement ................................................................................... 22

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Submitting an ungradable document ...................................................................................... 22

On-time Deadline for Completing Submission of ABP-1 ...................................................... 23

Subject to Change Statement ........................................................................................................... 23

Changes and Errata List ..................................................................................................................... 23

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MIS 111 Applied Business Project 1

Assignment Overview

A key contribution of Information systems for an enterprise is the ability to convert data into information (data in context). For this project, your task is to create a structured business report for your assigned publicly traded company from fundamental, technical, and quantitative investment perspectives. Your business report will discuss the following aspects of your assigned company:

• a profile of your assigned company and its industry; • a fundamental analysis of your assigned company’s financial statement; • a technical analysis of your assigned company assessing trading data of your

company and a competitor in the same industry sector against the broader exchange market as a whole; and, finally,

• a quantitative analysis of your assigned company based on comparing key ratios.

Fundamental, Technical, and Quantitative Analysis Overview

The most common methods that investors use to analyze the benefits and risks associated with long-term investments in the stock market include fundamental analysis, technical analysis, and quantitative analysis. Long-term investors look for investments that offer a greater probability of maximizing their returns over a longer period of time. Generally, this means at least one year, although many financial experts suggest time frames of five to ten years or longer. One of the benefits of being a long-term investor is the ability to save and invest for big goals that require significant time to achieve the highest rewards, such as retirement.

By understanding the differences between fundamental, technical, and quantitative analysis methodologies, long-term investors give themselves access to three valuable stock-picking strategies they can use for making profitable investment decisions. Investors and analysts will frequently use a combination of fundamental, technical, and quantitative analysis when evaluating a company’s potential for growth and profitability.

• The goal of fundamental analysis is to come up with a fair value of a company by evaluating all aspects of the business, along with the industry, the market as a whole, and the domestic and global environment.

• The goal of technical analysis is to evaluate data—such as historical returns and price changes—to chart patterns that can be used to estimate future price movement for securities and the market as a whole.

• The goal of quantitative analysis is to use simple financial ratio calculations to gain insight into the valuation of a specific company or broad market.

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Fundamental analysis is most often used when determining the quality of long-term investments in a wide array of securities and markets, while technical analysis is used more in the review of short-term investment decisions such as active trading of stocks. Investors use quantitative analysis to evaluate the financial stability of a company.

Adapted from: Horton, Melissa (February 5, 2020), Investopedia, “When to Use Fundamental, Technical, and Quantitative Analysis”, https://www.investopedia.com (Accessed: 18 January 2021).

Finding Your Required Assigned Company

The ticker symbol and name of your assigned company can be found on D2L in your grade book in the “ABP Ticker” item. Using your ticker symbol, we recommend using https://finance.yahoo.com to find information about the company, an industry competitor, and the market averages.

No Cost Access to Data Sources for Analysis

All information required for this assignment is available at no cost on the standard access Yahoo! Finance website at: https://finance.yahoo.com/

Important Note: You are not required to purchase Yahoo! Finance Premium for this assignment. If you encounter data that is not accessible or blocked by a paywall, please contact an instructor for assistance with accessing the required information.

While we recommend using Yahoo! Finance, you may use other sources, such as CNN Money, or other commercial investment services; however, the names used for some financial measures may not be the same used in this document.

IMPORTANT NOTE

To receive full credit for this assignment, you must use your assigned company, as shown in the “ABP Company

Ticker” item in your MIS 111 grade book on D2L

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Task 1: Company Profile

Important Note on Task 1 Sample Figures: the items to be included for Task 1 do not match the items shown in the style sample examples Tables 1 and 2. Be sure your report includes the correct list of items for Task 1 in your report.

Task 1.1: Company Governance

For Task 1.1, create a table describing the governance of the company. The following information should be organized in the corresponding order as a table (you may create this table as an MS Word table in your report or you can format the table in Excel and transfer it to your report). You company profile must include the following information about your assigned company. To assist you in preparing your company profile, the section where the information can be found on Yahoo! Finance is shown in parentheses following each require item.

• Company’s legal company name (“Profile”)

• Company’s trading exchange and ticker symbol (“Summary”)

• The URL for the company’s primary customer-facing website (“Profile”)

• Location (city, state) of its corporate headquarters (“Profile”)

• Name of the most key executive (typically, President or CEO) of the company

and their title (“Profile”)

• Calendar date (day and month) of the company’s most recent fiscal-year end

(“Financials” / “Annual Balance Sheet”)

• The company’s number of full-time employees (“Profile”)

• Company’s industry sector (“Profile”)

• Company’s industry classification (“Profile”)

Table 1 – Walmart Corporate governance (Sources: https://finance.yahoo.com/quote/WMT/financials?p=WMT &

https://corporate.walmart.com/our-story/leadership Referenced 8/29/2019)

Task 1.1 Corporate Governance Company’s legal company name Walmart Inc.

Company’s trading exchange and ticker symbol NYSE: WMT

Company’s primary website URL https://www.walmart.com/

Corporate Headquarters Location Bentonville, AR 72716

Most key executive & title Doug McMillon:

President and CEO, Walmart

Company fiscal year end 1/31/2020

Company’s full-time employees 2,200,000

Industry sector Consumer Defensive

Industry classification Discount Stores

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Task 1.2: Financial Profile

For Task 1.2, create a second table showing your company’s “financial profile” with the following information, using the information from a trading day since this ABP was posted on D2L (i.e., on or after August 29, 2022). You must include the date (on or after August 29, 2022) you collected your data for your “financial profile” as the first item in your Task 1.2 table, as shown below.

Table 2 – Walmart Financial Profile (Source: https://finance.yahoo.com/quote/WMT/holders?p=WMT Referenced 8/25/2020)

• For your selected specific trading day (on or after August 22, 2022), prepare a

table with the following data from the [Summary] page, except ownership, which

is from the [Holders] page:

o Previous Close Share Price

o Daily volume (Volume)

o Average daily volume (Avg. Volume)

o 52 week range (high and low)

o 1 Year (1y) Target Estimate

o Current Market Capitalization on the date selected (“Market Cap”)

o Company PE Ratio (TTM or Trailing Twelve Months)

o Company Earnings per Share (EPS (TTM))

o Percentage of shares owned by insiders [Holders]

o Percentage of shares own by institutions [Holders]

o Analyst “Fair Value” assessment (e.g., Overvalued, not the numeric value “xx.xx”)

o Overall Analysts Recommendation Rating (i.e., Strong Buy to Sell scale)

Task 1.2 Financial Profile The date of Financial Profile 8/25/2020

Previous Close 131.33

Volume 6,593,002

Average volume 8,748,015

52 week range (high and low) 102.00 - 137.63

1 Year Target Estimate 143.63

Forward Dividend and Yield 2.16 (1.64%)

Current Market Capitalization 369.938B

Company PE Ratio 20.84

Company Earnings per Share (EPS) 6.27

Company’s “Beta” 0.32

Percentage of shares owned by insiders 50.91%

Percentage of shares owned by institutions 30.95%

Analyst Fair Value Recommendation Overvalued

Recommendation Rating Sell

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When creating your information profile tables for Tasks 1.1 or 1.2, be sure to include an appropriate caption below your tables (e.g., “Table 1. <Company Name> Corporate Governance”, “Table 2. <Company Name> Financial Profile”, that also includes a citation to your online source), as shown in the examples above.

Since Yahoo Finance only displays this information on the summary and holdings pages for each company for one trading date, it is highly recommended that you screenshot the webpage or complete all parts of Task 1.2 of your project contemporaneously with the trading day you prepare your analysis for this task.

On Yahoo Finance, when looking at your company, the “Fair Value” assessment can be found on the left side of the “Summary” page below the summary financial date. The “Recommendation Rating” area on the “Summary” as one of the items in the right- hand column that contains a number of reports about the company. In addition, the “Recommendation Rating” can be found on the “Analysis” page.

Task 1.3: Investment Assessment

For Task 1.3, write a 150 word original (i.e., in your own words) assessment (range: 125 – 175 words) of your company’s stock price that evaluates the analysts Fair Value and Recommendation Rating guidance you reported in Task 1.2. Beyond the trading activity (stock price and volume) and your stock’s current share price relative to its 52-week price range, why do you think the analysts viewing your company’s stock as “overvalued” or perhaps a “buy” opportunity? Be sure to provide a specific justification based on information you found related to your company.

When preparing Task 1.3, you can consider either objective (e.g., recent financial performance or product sales trends) and subjective (e.g., press releases by your company and or other published news sources) performance measures. If you reference another online source, be sure to include a properly formatted citation.

Task 1 Self-Assessment Quality Review [20 points]

Point Goal 0-5 points 6-10 points 11-15 points 16-20 points

Assessment (Based on the

specific criteria

defined for each subtask)

Did not attempt or missing

content in two or more tables and/or written assessment or

citations

Missing major content in one or

more tables and/or written assessment and

citations

Missing some content in one

table or written assessment and

citations

Fully included most or all content in

tables, written assessment and

citations

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Task 2: Fundamental Analysis

Important Note on Task 2 Sample Figures: the items to be included for Task 2 do not match the items shown in the style sample example Table 3. Be sure your report includes the correct list of items for Task 2 in your report.

Fundamental analysis is the process of measuring a security's intrinsic value by evaluating all aspects of a business or market. Tangible assets including land, equipment, or buildings that a company owns are reviewed in combination with intangible assets such as trademarks, patents, branding, or intellectual property.

When evaluating the broader scope of the stock market, investors use fundamental analysis to review economic factors, including the overall strength of the economy and specific industry sector conditions. Fundamental analysis results in a value assigned to the security in review that is compared to the security's current price.

Task 2.1: Financial Metrics

For Task 2.1, create a spreadsheet table for the most recent three reported fiscal year-end closes (e.g., 2019, 2020, and 2021), as shown for your company on the “Financials” page. The data for each fiscal year is shown on the balance sheet, income statement or cash flow under the fiscal year-end close for your assigned company.

If your company has not published their results for the 2022 fiscal year, use the data for the last 3 fiscal years available, such as 2019, 2020, and 2021.

Your table should report the following financial metrics for all three columns. Values for some metrics may be show in thousands or millions, so be sure to include an appropriate note about the magnitudes you used for your reported values.

You will select the financial information listed below from the three major financial reports (i.e., Income Statement, Balance Sheet, and Cash Flow) submenus shown under the “Financials” section for your assigned company’s stock.

NOTE: You may have to click on “Expand All” on yahoo’s website to see all the data in the financial sheets (e.g., Balance Sheet, Income Statement, Cash Flow)

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Task 2.1 Financial Metrics

• From Balance Sheet

o Assets

▪ Total Assets

▪ Current Assets

▪ Total Non-current Assets

o Liabilities

▪ Total Liabilities

▪ Current Liabilities

▪ Total Non-current Liabilities

o Stockholder’s Equity

• From Income Statement o Total Revenue

o Cost of Revenue

o Gross Profit

o Operating Income (or Loss)

o Pretax Income

o EBIT (Earning Before Interest and Taxes)

• From Cash Flow Statement

o Operating Cash Flow

o End Cash Position

o Changes in Cash

o Free Cash Flow

• Under the “Historical Data” section, find the following values for the last

trading date in the most recent fiscal year. As a reminder, the last trading

day may be different than the last calendar day in a company’s fiscal year

o “Adjusted Close” stock price

o Volume (shares of stock traded)

Important Conventions on Reported Financial Report Data

Trading Day A “trading day” is when stocks are traded (bought and sold) on the

market (NYSE or NASDAQ) for the stock. Since stocks are not traded on weekends or

national holidays, the last trading day of each month may not be the last calendar day

of the month, for example, the last trading day for May 2020 was May 29th.

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All numbers in thousands (millions, or billions) The values shown in the major financial

reports (and large values such as the Market Capitalization on the Summary page) are

commonly shown “in” (i.e., rounded off to) thousands, millions (M), or even billions

(B). As shown in the sample Task 2.1 table below, all values reported in this table are

shown in millions. When using values from Yahoo! Finance for calculations, be sure

that magnitudes of all of the values you are using are consistent.

Table 3 – Walmart Financial Profile (Source: https://finance.yahoo.com/quote/WMT Referenced 8/25/2020)

Closing Date --> 1/31/2020 1/31/2019 1/31/2018

Cash and Cash Equivalents 9,465 7,722 6,756

Inventory 44,435 44,269 43,783

Total Current Assets 61,806 61,897 59,664

Total Non-Current Assets 174,689 157,398 144,858

Total Assets 236,495 219,295 204,522

Accounts Payable 46,973 47,060 46,092

Total Current Liabilities 77,790 77,477 78,521

Total Non-Current Liabilities 77,153 62,184 45,179

Total Liabilities 154,943 139,661 123,700

Total Stockholder Equity 139,661 72,496 77,869

Net Tangible Assets 123,700 41,315 59,627

Total Revenue 523,964 514,405 500,343

Gross Profit 129,359 129,104 126,947

Selling General and Administrative 108,791 107,147 106,510

Total Operating Expenses 108,791 107,147 106,510

Operating Income or Loss 20,568 22,117 22,249

Net Income 14,881 6,670 9,862

EBIT 22,715 13,806 17,453

Normalized EBITDA 33,702 24,484 31,118

Cash flows from operating activities 25,255 27,753 28,337

Cash at Beginning of period 7,756 7,014 6,867

Cash at end of period 9,515 7,756 6,756

Free Cash Flow 14,550 17,409 18,286

Adj. Closing price on Closing Date 113.02 92.72 100.75

Stock Volume on Closing Date 7,775,800 14,723,000 9,812,800

Cash Flow Statement Fundamentals

Historical Stock Price Data

Task 2.1 Historical Stock Analysis and Fundamentals (in millions except per share items)

Balance Sheet Fundamentals

Income Statement Fundamentals

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Task 2.2: Media Perspectives

For Task 2.2, select one press release article (from the “Press Releases” section on Yahoo Finance “Summary” page) about your company that was published within the last 12 months whose subject directly addresses an issue relating to the financial condition of the company, and therefore, would be important to investors.

Based on the claims in the company’s the press release, write a 150 word original (i.e., in your own words) analysis (range: 125 – 175 words) describing the subject of the press release and how an investor would be able to independently verify the issue based on the information that can be found in the financial reports (e.g., declaring a dividend, earnings reports, etc.). Be sure to include a citation to your press release including the date referenced, as is required for all online sources.

Task 2 Self-Assessment Quality Review [25 points]

Point Goal 0-6 points 7-12 points 13-18 points 19-25 points

Assessment (Based on the

specific criteria

defined for each subtask)

Did not attempt or missing

content in two or more tables and/or written assessment or

citations

Missing major content in one or more tables and/or written assessment and

citations

Missing some content in one

table or written assessment and

citations

Fully included most or all content in

tables, written assessment and

citations

Section 3: Quantitative Analysis

Important Note on Task 3 Sample Figures: the items to be included for Task 3 do not match the items shown in the style sample examples Table 4 Figure 1. Be sure your report includes the correct list of items for Task 3 in your report.

Investors perform quantitative analysis through simple financial ratio calculations such as earnings per share (EPS) or more complex financial calculations such as the discounted cash flow (DCF). The results of quantitative analysis provide insight into the valuation or historic performance of a specific security or market.

Quantitative analysis is often used in conjunction with fundamental and technical analysis to determine the potential advantages and risks of investment decisions.

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Task 3.1: Stock Price Analysis

For Task 3.1, you will evaluate how your company has performed over the period December 31, 2020 to December 31, 2021 in comparison to a company in the same “Industry” and the broader market (NYSE or NASDAQ) where your company is traded.

The term “Industry” commonly refers to a series of companies that operate in a similar business sphere. A company’s “industry” is determined by the code definition that generates the largest revenue for a company at a specified location in the past year. For the purposes of this assignment, you should select a company that matches the “industry” specified in your assigned company’s “Profile” section.

To find the historical data for the market, select the “Dow 30” (also known as the “Dow Jones Industrial Average”) or “Nasdaq” (also known as the “NASDAQ Composite”) mini-charts above the “Summary” screen for your stock, and select “Historical Data” as you did with your assigned company’s stock.

The Dow Jones Industrial Average (DJIA) and NASDAQ Composite are widely watched benchmark indexes in the U.S. While the Dow 30 is a price-weighted index that tracks 30 large, publicly owned companies traded on the NYSE, the NASDAQ Composite is a market-cap-weighted index of more than 2,500 stocks and other financial instruments traded on the NASDAQ exchange.

For the market average, you should use the Dow30 Average (for stocks traded on the NYSE) or the NASDAQ Average (for stocks traded on the NASDAQ),

The format of your Stock Price Analysis table must be formatted as follows:

• Your table should include a title line, above four columns (Closing date, and closing trading prices for stocks from three companies), as described below.

• The closing stock prices should be formatted as numbers (not currency) with two decimal places and be formatting using 1000’s (thousand’s) comma separators.

• The main title should be a merged cell that contains a centered descriptive title highlighted with a filled background color. As you pick your background color, verify the readability (contrast) between the text and the shading of the background in your project report you submit for grading, since your report might appear differently than it does on your computer display.

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As with all tables and figures, be sure to include an appropriate caption below your comparison table (e.g., “Table 3. Industry Comparison Data” and your source citation), as shown in the style example of your table shown below:

Task 3.1 Historical Stock Price Analysis Table (Reports adjusted closing price)

WMT KR NYSE Closing Date Walmart Kroger NYSE Dow 30

December 31, 2018 90.13 26.45 10,101.49 January 31, 2019 92.72 27.25 10,110.95

February 28, 2019 95.78 28.35 10,110.54 March 29, 2019 94.88 23.62 10,114.57

April 30, 2019 100.04 24.92 10,122.15 May 31, 2019 99.20 22.17 10,106.83 June 28, 2019 108.05 21.10 10,115.87 July 31, 2019 107.95 20.57 10,121.02

August 30, 2019 112.29 23.18 10,133.15 September 30, 2019 116.63 25.23 10,136.25

October 31, 2019 115.24 24.12 10,139.05 November 29, 2019 117.04 26.92 10,126.24 December 31, 2019 117.32 28.54 10,126.86

Table 4 – Industry Stock Price Closing Price Table (Source: https://finance.yahoo.com/ Referenced 8/25/2020)

Specific requirements for each column in Table 4:

[Column 1] Stock Price Analysis: Dates for Monthly Historical Quotes

Contains the date for each historical quote (the adjusted closing price for the last trading day of December 2020, as well as the adjusted closing price for the last trading day in each month from January 2021 to December 2021).

Definition: Trading Day - A trading day is when stocks are bought and sold on the market for the stock. Since stocks are not traded on weekends or national holidays, the last trading day of each month may not be the last calendar day of the month; for example, the last trading day for May 2020 was May 29th.

Formatting: The header for this column should be “Closing Date”, and the dates should be formatted as “Month Day, Year” format (e.g., Mar 29, 2020).

[Column 2] Stock Price Analysis: Adjusted Closing Stock Prices – Assigned Company

Contains the historical closing stock prices for your assigned company. The header will be the company’s ticker symbol, followed by the stock prices correlating with the dates for each month shown in the left column. Use the “Adjusted Close” column.

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[Column 3] Stock Price Analysis: Adjusted Closing Stock Prices – Comparison Company

Contains the historical closing stock prices for a company in the same industry as your assigned company (you may select the comparison company). Use the “Adjusted Close” column.

[Column 4] Stock Price Analysis: Closing Stock Prices – Broader Market

Contains the historical closing stock prices for your assigned company’s market (DOW 30 or NASDAQ Composite, as described above), as indicated in Task 1.1

Task 3.2: Industry Stock Price Graph

For task 3.2, you will use the stock price table developed in Task 3.1 to create a stock price comparison graph. Your graph should be formatted as a line graph (as shown below). The easiest way to create a line graph that meets the requirements is with Excel. Simply select the table you just created, including each column header, and then click the “Line” icon in the “Charts” section of the “Insert” tab.

In addition, be sure to include an appropriate caption below your stock price analysis figure (e.g., “Figure 1. Stock Price Analysis” and your source), as shown in the style example Figure 1 below.

Figure 1 – Industry Stock Price Analysis Chart (Source: https://finance.yahoo.com/ Referenced 8/25/2020)

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Be sure you add appropriate captions to the X-axis (trading date) and both of the Y-axes (the primary axis for adjusted closing price for the individual company’s shares and the secondary axis for the DOW 30 or NASDAQ closing index price), as well as an appropriate title for your chart.

Since the market closing prices will be significantly higher than the share price of any individual stock, you will need to use a “secondary axis” to allow you to compare the trends of each line in your graph.

To add a secondary axis to your graph, select the plotted line for your market data by clicking on the plotted line in the chart, right click to select the option for “Format Data Series,” and then select “Secondary Axis”.

Be sure to add an axis title to your secondary axis by selecting the chart by clicking anywhere on the chart, and then click on the “Chart Elements” (box with a crosshatch “+”). The “Axis Titles” should already be selected (for your left-hand axis), so just click on the right-arrow to open the menu and then select “Secondary Vertical” to match your axis title for the primary axis title.

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IMPORTANT NOTE FOR TASK 3.2: The range used for the horizontal (date) axis in your stock price graph will, by default, most likely use a continuous date range, rather than the exact closing dates of each month.

Be sure to change your chart axis formatting to have the specific closing dates you listed in Task 3.1 be used for Figure 1 by using the “Format Axis” tool.

To format the date axis to use the actual trading dates from your data, select the axis by clicking anywhere on the date axis (the X axis), and right-click on the “Format Axis” option. When the menu is displayed, you should change the selection from “Automatically select based on data” to “Text axis”.

Task 3 Self-Assessment Quality Review [25 points]

Point Goal 0-6 points 7-12 points 13-18 points 19-25 points

Assessment (Based on the

specific criteria

defined for each subtask)

Did not attempt or missing

content in both table and graph content and/or

citations

Missing major content in both table and graph content and/or

citations

Missing some content in both table and graph content and/or

citations

Fully included most or all

content in both table and graph and/or citations

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Task 4: Technical Analysis

Important Note on Task 4 Sample Figures: the items to be included for Task 4 do not match the items shown in the style sample example Table 5. Be sure your report includes the correct list of items for Task 4 in your report.

The process of evaluating securities through statistics is known as technical analysis. Analysts and investors use data on market activity such as historical returns, stock prices, and volume of trades to chart patterns in securities movement. Technical data analysis is meant to provide insight on the future activity of securities or the broader market. Technical analysis uses data from relatively short periods of time to develop the patterns used to predict securities or market movement (while fundamental analysis relies on information that spans years).

Task 4.1: Financial Metrics Needed to Calculate Financial Ratios

Create a table in the style used for Task 1.2 that contains the following values, from the most recent reported fiscal year financials. These values can be found in the financial reports on Yahoo! Finance used for your research for Tasks 1 and 2.

• Summary Page o Market Capitalization (Market Cap – based on date used for Task 1.2)

• Financials / Balance Sheet

o Accounts Receivable: Accounts Receivable (or Gross A/R) o Cash: Cash, Cash Equivalents, and Short-term Investments o Current Assets: Current Assets o Current Liabilities: Current Liabilities o Total Equity: Total Equity Gross Minority Interest

Table 5 – Fundamental numbers needed for Financial Ratios (Source: https://finance.yahoo.com/ Referenced 8/25/2020)

369,938,000,000

139,661,000,000

61,806,000,000

77,790,000,000

9,465,000,000

-

2,800,000,000

6,284,000,000

43,714,000,000

74,669,000,000Total Stockholders’ Equity

Cash and Cash Equivalents [Cash]

Short Term Investments [Securities]

Shares of common stock [Stock]

Net Receivables [A/R]

Long Term Debt

Task 4.1 Fundamental numbers needed for Financial Ratios Market Capitalization

Book Value of Equity

Total Current Assets

Total Current Liabilities

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Task 4.2: The Acid Test

The Acid Test (also called the Quick Ratio) examines whether a company’s short- term assets will cover its short-term liabilities. If they will not, the company may have a positive value but lack liquidity and be unable to pay its obligations when due.

𝑨𝒄𝒊𝒅 𝑻𝒆𝒔𝒕 = (𝑪𝒂𝒔𝒉 + 𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒔 𝑹𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆)

𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔

“Cash” shown as “Cash, Cash Equivalents, and Short-term Investments in Task 4.1

(Source: https://www.investopedia.com/terms/a/acidtest.asp accessed 8/30/19)

Calculate and show the Acid Test for your company and write 150 word original (i.e., in your own words) analysis (range: 125 – 175 words) about financial liquidity of the company and whether you consider that there may be foreseeable issues with the company’s liquidity, as discussed in the Investopedia article.

Be sure to justify your answer using one or more sources and include their URL with the date you referenced the online source(s).

Task 4.3: Working Capital Ratio

The working capital ratio is relatively simple, it is

𝑾𝒐𝒓𝒌𝒊𝒏𝒈 𝑪𝒂𝒑𝒊𝒕𝒂𝒍 𝑹𝒂𝒕𝒊𝒐 = 𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑨𝒔𝒔𝒆𝒕𝒔

𝑪𝒖𝒓𝒓𝒆𝒏𝒕 𝑳𝒊𝒂𝒃𝒊𝒍𝒊𝒕𝒊𝒆𝒔

Show the calculation of your company’s Working Capital Ratio and write 150 word original (i.e., in your own words) analysis (range: 125 – 175 words) about the state of the company with respect to the Working Capital Ratio, as discussed in the Investopedia article.

Be sure to justify your answer using one or more sources and include their URL with the date you referenced the online source(s).

Task 4.4: Price to Book Ratio

The price to book ratio (also called the market to book ratio) is widely used. Any ratio value under 1 (one) may be indicative of an undervalued stock, meaning its book value of its assets are worth more than the market value of the company, which impacts a company’s liquidity and its ability to pay its obligations when due.

𝑷𝒓𝒊𝒄𝒆 𝒕𝒐 𝑩𝒐𝒐𝒌 𝑹𝒂𝒕𝒊𝒐 = 𝑴𝒂𝒓𝒌𝒆𝒕 𝑪𝒂𝒑𝒊𝒕𝒂𝒍𝒊𝒛𝒂𝒕𝒊𝒐𝒏

𝑻𝒐𝒕𝒂𝒍 𝑺𝒕𝒐𝒄𝒌𝒉𝒐𝒍𝒅𝒆𝒓′𝒔 𝑬𝒒𝒖𝒊𝒕𝒚

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Note that the Price to Book Ratio that you calculate based on the information shown in Task 4.1 may differ from the reported Price to Book Ratio reported by financial sites, since your company’s market capitalization varies over time based on the traded share price and the number of common shares outstanding.

For the purposes of this task, you should base your calculation on the Market Capitalization value from obtained for Task 1.2.

Be sure to use equivalent measures when calculating your Price to Book Ratio. If you want to use the traded price for one share of stock, i.e., “Share Price”, you will need to calculate the Total Stockholder Equity for one share of stock. For example,

𝑷𝒓𝒊𝒄𝒆 𝒕𝒐 𝑩𝒐𝒐𝒌 𝑹𝒂𝒕𝒊𝒐 = 𝑺𝒉𝒂𝒓𝒆𝑷𝒓𝒊𝒄𝒆

𝑩𝒐𝒐𝒌 𝑽𝒂𝒍𝒖𝒆 𝒑𝒆𝒓 𝑺𝒉𝒂𝒓𝒆

Some sources may appear to use different values, when it is simply a matter of factoring out the total number of common shares from each term, as shown below:

𝑷𝒓𝒊𝒄𝒆 𝒕𝒐 𝑩𝒐𝒐𝒌 𝑹𝒂𝒕𝒊𝒐 = 𝑴𝒂𝒓𝒌𝒆𝒕𝑪𝒂𝒑

𝑻𝒐𝒕𝒂𝒍 𝑩𝒐𝒐𝒌 𝑽𝒂𝒍𝒖𝒆 =

[ 𝑴𝒂𝒓𝒌𝒆𝒕𝑪𝒂𝒑 𝑵𝒖𝒎 𝑺𝒉𝒂𝒓𝒆𝒔

]

[ 𝑻𝒐𝒕𝒂𝒍 𝑩𝒐𝒐𝒌 𝑽𝒂𝒍𝒖𝒆

𝑵𝒖𝒎 𝑺𝒉𝒂𝒓𝒆𝒔 ]

= 𝑺𝒉𝒂𝒓𝒆𝑷𝒓𝒊𝒄𝒆

𝑩𝒐𝒐𝒌 𝑽𝒂𝒍𝒖𝒆 𝒑𝒆𝒓 𝑺𝒉𝒂𝒓𝒆

For this task, calculate and show the P/B ratio for your company and write a 150 word original (i.e., in your own words) analysis (range: 125 – 175 words) of the companies P/B ratio and whether it appears to be favorable. Note, value investors consider a PB ratio below 3 (three) to be favorable.

Specifically discuss whether the company also has intangible assets or goodwill that may be artificially depressing the P/B ratio and making the company appear to be a better value than the actual financial condition. For more information on investment use of the P/B ratio, refer to the Investopedia article on Price to Book Ratio.

Be sure to justify your answer using one or more sources and include their URL with the date you referenced the online source(s).

Task 4 Self-Assessment Quality Review [30 points]

Point Goal 0-7 points 8-16 points 17-23 points 24-30 points

Assessment (Based on the

specific criteria

defined for each subtask)

Did not attempt or missing most content in table

and financial ratio reviews

and/or citations

Missing major content in table

and financial ratio reviews

and/or citations

Missing some content in table and

financial ratio reviews and/or

citations

Fully included most or all

content in table and financial ratio reviews

and/or citations

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General Applied Business Project Report Guidelines

Required Business Report Formatting Elements

In order to receive full credit for your assignment, your structured business report must use the ABP-1assignment template (available in the ABP-1 assignment folder on D2L), which includes the required “E-Tegrity” statement, and be formatted as PDF file.

REQUIRED Text for E-Tegrity Statement

Citing Sources Required for Discussion Questions, Tables and Figures

You should always cite the source of any data you use, whether it is narrative information or numeric financial performance information. If your source is from a document you found online, your citation must include the source’s URL and the date you referenced the material. Although it does not follow the requirements for style sheets used on formal paper (i.e., MLA, APA, etc.), for our applied business projects, you are only required to include the root URL. An example of a citation that you would use for historical quote data from http://www.google.com/finance would be:

(Source: http://www.google.com/finance accessed on 2/4/2011)

All web pages (including Yahoo! Finance) that have been accessed as sources of data for a task or section should be cited. Citations must be used when the information you included was not your own work, and included either directly below a written paragraph or as part of the caption, as shown in the guidelines.

It is not acceptable to use a “works cited” list at the end of your report.

For full credit, your structured business report MUST:

• Use the ABP-1 Report Template • Include with the E-tegrity Statement • Be submitted in PDF file format

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Citations are also required when you have included information from source (such as Yahoo! Finance) in a table or figure. The citation should be included immediately below the caption for your table or figure as a “source”. The following is an example of a correctly formatted caption and citation of Table 1 for Task 1.1.

Major Business Report Penalties

Criteria Penalty

Not using the ABP-1 report template Even if we can open and grade your assignment, if you do not use the ABP-1 assignment template to prepare your report, a 10 point penalty will be deducted from your score.

-10 points

Not submitting your report in PDF file format Even if we can open and grade your assignment, if you submit your report in any other format (e.g., Word or Pages), a 10 point penalty will be deducted from your score.

-10 points

Not using your assigned company, as shown in the “ABP Ticker” item in your MIS 111 grade book on D2L If you use any other company than the company assigned in your D2L grade book, a 20 point penalty will be deducted from your assignment grade.

-20 points

Not including the E-Tegrity statement in your report as shown above and also included in the template file is not included in your report, as shown the template file, a 20 point penalty will be deducted from your assignment grade.

-20 points

Submitting an ungradable document (i.e., anything other than your project report solution, such as an incorrect file from another assignment, blank assignment template, or a document that cannot be opened You will not receive any credit for the assignment. However, you may still submit your report for partial credit, which has a 20 point penalty.

-100 points

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On-time Deadline for Completing Submission of ABP-1

As a reminder, the system clock for D2L solely determines the submission time for an assignment, not your personal device. Moreover, please remember that that Arizona does NOT observe daylight savings time, and the assignment deadline time is based on local Arizona time (MST or UTC/GMT-7), as determined by D2L’s system clock.

Therefore, you are strongly encouraged to submit your assignments early, preferably before 11:30pm. Since it is solely your responsibility to ensure that your assignment to D2L has been fully uploaded and acknowledged with a confirmation message by D2L prior to the published deadline. No extensions will be given due to slow system performance, network problems, or any other issues affecting your ability to submit your report by the deadline.

Subject to Change Statement

The information contained in these guidelines, other than the assignment’s total point value for the course grading rubric, may be subject to change with advance notice, as deemed appropriate by the instructor, including, but not limited to typographical errors, factual errors, omissions, or other material included herein as needed to reflect the requirements of the course correctly.

Any changes made to the assignment’s guidelines will be announced during a Flex/In- Person class discussion and updated guidelines posted in the assignment’s folder. You are responsible for all announced changes to the assignment’s guidelines. If you have any questions or concerns regarding any changes to the assignment guidelines, please contact the Instructional Team at [email protected].

Changes and Errata List

Changes made to the schedule are documented below and announced on D2L.

• Initial Release: 29 August 2022

Wednesday, September 14, 2022 by 11:59pm

The D2L submission process (i.e., the upload of your report must finish and a confirmation message displayed by D2L) must be completed by 11:59pm

local Tucson time (MST or UTC/GMT-7) by the assignment due date. This is a hard deadline and no extensions are offered to the on-time assignment due

date, so be sure to plan your work and submission attempts accordingly.

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Online Sources of Financial Information

1) The Investor Relations section of your company’s website

An important source of financial information for any company can be found in the “investor relations” section of your company’s corporate website.

2) Financial Reporting Websites

• Yahoo: http://finance.yahoo.com/ (recommended) • Money: http://money.cnn.com/ • Google: http://www.google.com/finance • NASDAQ: https://www.nasdaq.com/ • NYSE: https://www.nyse.com/

Many of these online services offer current and historical stock pricing, financial information, corporate background, and other investment information. While some financial terms are unique to each site, the guidelines generally reflect terminology used on Google Finance and Yahoo Finance.

3) Dictionaries to investment terms

• http://www.Investopedia.com

This website offers definitions of investment terminology and formulas to investment metrics used in this assignment.

4) Financial Analysis Websites

• http://www.Reuters.com

Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com,

• http://www.bloomberg.com/

One of the best financial websites out there, Bloomberg is all about up-to-date business analysis and financial data. The site has a good personal finance section with news supported by videos and four calculator tools.