Reference no: EM131168220

Research Project

A key component of graduate study at ADU is research. The objective of this research project is to give students the skills to critically evaluate pertinent literature and master basic research methodology. The research project consists of a focused Portfolio Performance and Financial Analysis involving samples of health care versus non-health care investor-owned enterprises. The report should be approximately 7-15 pages in length (including tables, figures and list of references; prepared following any recognized style format such as APA (American Psychological Association) or MLA (Modern Language Association).  Students are expected to search for, read, and cite a minimum of two (2) peer-reviewed articles (additional information will be provided in class).

Use the following chart as a guide for data collection and organization:

Master Portfolio, n=40

Health Care Sector Portfolio, n=20	Non-Health Care Sectors Portfolio, n=20
Hospitals	Basic Materials
Home Health Care	Conglomerates
Long-term Care	Consumer Goods
Health Care Plans	Financial
Drug Manufacturers	Industrial Goods
Biotechnology	Services
Medical Appliances	Technology
Diagnostic	Utilities

Part A

Select forty enterprises, 20 from the health care sector and 20 from the non-health sectors (see Note 1). Using SPSS or Excel, perform an independent sample t-test to examine the risk-unadjusted return performance differential between the two portfolios. Decide between equal-variances and unequal-variances test statistics. The research objective is to identify the portfolio dominance order, hence the hypotheses are:

H₀: (µ₁ - µ₂) = 0 (there is no dominant portfolio)

H₁: (µ₁ - µ₂) ≠ 0 (there is a dominant portfolio)

How to form the master portfolio

1. Identify ticker symbols of stocks to trade

2. You Yahoo.Finance.com to get historical market values (see Note 1)

3. Use "Research Project Part A" template as a guide to complete this part of the research project.

Part B

Perform a financial performance assessment of TWO of the companies (one from each portfolio). Please see textbook, chapter 13. Address the areas of short-term solvency (Current Ratio), long-term solvency (Debt Ratio), asset management (Total Asset Turnover), and profitability (Return on Equity and Profit Margin). Make sure you compare these metrics with a benchmark (industry or leading competitor) and assess the two-year trend of each measure. Assess MVA and volatility via a 5-year flowchart/time series for these two companies

Organize your report as follows:

1. Introduction and Methodology

2. Data and Descriptive Statistics

3. Analysis and Conclusion

4. References

See Note 2 below. An example of a financial performance analysis report is provided under Files/Research Project.

Note 1

The research project has two components (see syllabus). The first component (Part A) is an empirical statistical test. The purpose of the test is to identify whether there is a dominant portfolio. You need to collect historical market values to run the test. Follow the attached example (see Excel file attached) to organize your data. Select 40 enterprises (20 from the healthcare sector and 20 from the other sectors). Use the following link to access the sectors: https://biz.yahoo.com/p/s_conameu.html. Note that each enterprise (company) has a stock symbol. For example, the symbol of Hospital Corporation of American is HCA. If HCA is one of your selected companies (part of the healthcare portfolio) then obtain the market values of that company for May 15 and August 15. If you do not want to wait until August 15, then use an alternative period of time, for example Jan 1, 2015 to Dec 31, 2015 (a full year). Go to https://finance.yahoo.com/ and use the "Quote Lookup" function (enter the stock symbol, for example HCA and click on "Go'), then click on "Historical Prices" then set the date range (for example Jan 1, 2015 to Dec 31, 2015) daily values. Record the Jan 1 and Dec 31 "Adj Close" values in the Excel spreadsheet as illustrated in Template A (Canvas/Files). Do the same for the other selected companies. When done, run a "t-test, Two-Sample, Assuming Equal Variances" test. When done, explain your findings. Note that Template A has two spreadsheets: "Data" and "Test". If you have any questions, please let me know.

Note 2

For Part B, perform a financial performance analysis of TWO of the companies (one from each portfolio). You need access to the income statements and balance sheets for three years (for example, 2015, 2014, and 2013). Go to https://finance.yahoo.com/ and use the "Quote Lookup" function (enter the stock symbol, for example HCA and click on "Go'), then click on "Income Statement" and get the necessary revenue/expense data for these periods. Transfer these amounts to the Template. Do the same for the "Balance sheet." Address the areas of short-term solvency (Current Ratio), long-term solvency (Debt Ratio), asset management (Total Asset Turnover), and profitability (Return on Equity and Profit Margin). Make sure you compare these metrics with a benchmark (industry or leading competitor) and assess the two-year trend of each measure. Assess MVA and volatility via a 5-year flowchart/time series for these two companies. Use Template B (Canvas/Files/Research Project) as a guide.

Attachment:- Case_Project.zip