Prepare an analysis of the firm’s financial position taking account of the following guidelines:
Company name: Solectron Electronics manufacturing company
A. Outline:
· A maximum of five (5) pages
· Double spaced
· Any evidence of plagiarized material in your report will result in an automatic ‘F’.
· Attach all referenced materials (e.g., internet web site and news paper references)
· Neatness and clarity will be rewarded
B. Content:
· Introduction and Background information of the firm. Talk about the nature of its business or primary product. SWOT analysis.
· Market position of the firm both locally and internationally.
· Briefly discuss any MAJOR recent moves by the firm.
· List and graph the stock price of the firm from November 1st 2021 to December 10th 2021.
Note and explain significant changes in price from one day to the next. Note and briefly discuss any specific event that you believe may have caused those changes.
· Ratio Analysis: For each of the firms, obtain the following ratios for each of the five (5) years, compare to industry average and use them in your analysis.
1. Profitability Ratios
i. ROE
2. Debt Management:
ii. Debt Ratio
3. Market Value:
iii. P/E Ratio
iv. PE/G Ratio
v. EV/Sales
vi. EV/EBITDA
4. Asset Management vii. Total Asset Turnover (TATO)
5. Equity Valuation Models:
At least two models are to be used to determine the expected value of the stock. These should include the Free Cashflow Model (At least a 2-stage model) (Required for ALL students) plus at least one of the other models we covered in class.
Discounted Dividend Growth Model
The Price Ratio Models
Residual Income Model
Comparable Company Analysis (CCA)
· Discussion and Analysis: Discuss how the firms are doing compared to the industry with specific reference to a notable firm in that particular industry (e.g., Dream works and Pixar).