Choose a publicly traded company that interests you. If you don\'t know how to c

ID: 2654022 • Letter: C

Question

Choose a publicly traded company that interests you. If you don't know how to choose a company, think of IBM, DELL computer, Nike, Apple computer, GM, Ford, Nokia, Home Depot, and on and on. Think of the companies that make things you use everyday. Choose one from them. Part A. Go to COMPUSTAT Research Insights, Reuters, Thomson Financial Service, or Bloomberg Financial (E-Trade Financial Learning Center has them all) or any other financial database such as Yahoo Finance to download the historical closing prices (five years) of your company on the monthly basis (twelve data points a year). Use Microsoft Excel to chart the historical prices (like the one below) based on the monthly data. Part B. Based on the financial statements of the latest available annual report, calculate the following financial ratios using only one year data. If the ratios are not available, please explain why. For example, Citibank doesnt have inventory because its a financial company. (Please use spreadsheet software (MS Excel) for this part and show your calculation) Current ratio Quick ratio Fixed assets turnover Total assets turnover Total debt to total assets Profit margin on sales Return on total assets Return on common equity Price/earnings ratio Market/book ratio The final report should include a chart of monthly stock price movements described in part A and the financial ratios in part B above. Based on the materials provided in the annual report and business news from The Wall Street Journal, as well as the financial information from any other sources, such as Datastream, Reuters, and Bloomberg Financial, explain as much as you can the movement of your stock during the last twelve months. Your report should start with a description of the business and the status of financial condition such as Line of business, Competitive positions, and Profitability History (going back five years). Do not turn in a sloppy, rapidly completed report. All papers should have a title page, a table of contents, a statement of purpose, footnotes or endnotes, or a bibliography or reference. The due date for submitting your project is the last date of the class. You will use Assignment manager to submit your project.

Explanation / Answer

Company – General Electric Co.

Description of the business- General electric is a leading company engaged in energy sectors. The products and services of company range from aircraft engines , power generation, oil and gas production , household appliances and other energy equipment.

Competitors- The main competitors are Emerson Electric company, Harman International Industries , Koss corporations.

The Historical prices and financial ratios are given hereunder.

Part A- Monthly Closing Price of Stock

Note-

(‘1) For the first column of the year 2015-14, period is considered from July 15 to Aug-14. That means most recent prices shown earlier and old prices shown later.

(‘2) All the figures are in US dollar.

(‘3) Prices are monthly closing prices at NYSE.

Part B- Financial Ratios based on Latest Financials as on June 30, 2015

Particulars

Ratios

Current Ratio

2.4

Quick Ratio

1.1

Fixed Asset Turnover

2.5

Total Asset Turn over

0.2

Total Debt / Total Assets

80.64 %

Return on Assets

1.69 %

Return on Common Equity

4.31 %

EBITDA Margin

19.12 %

Price / Earnings Ratio ( Dec 31,2014)

15.82

Price to Book ratio

2.40