Evaluate the vulnerability, Financial Management

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Assume you are a professional financial analyst working for a wealthy investor.  Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is not in his vocabulary).  Your client would like to see two (2) companies you think are promising compared side-by-side, along with a suggestion from you regarding which is the better investment choice (which should be supported by the numbers). In  analysis of the two companies, be sure to include the following:

  • Organization Overviews. Conduct research and describe the companies, their operations, locations, markets, and lines of business. Collect financial statements for the past three (3) years, fiscal or calendar (please insert these in an appendix to your paper). These financial statements must include at least the income statement and the balance sheet.
  • Evaluate the vulnerability of the Organization to external forces such as a recession, higher interest rates, and global competition.
  • Financial Performance. Based on the financial trends of the Organization, predict how these trends will impact financial performance in future periods. Explain your rationale for this prediction.
  • Given the performance of the stock in the periods presented on the Organization's financial statements, discuss how the stock is likely to perform in the future, what type of investor would be drawn to this stock, and make a recommendation to management to improve stock performance.
  • Recommendations. State and support your opinion of each Organization' s common stock as an investment opportunity. Assume that you can choose only one (1) of these companies. State your choice and provide a solid defence for the Organization that you would choose.

Present your findings and recommendation to your client in a 7-9 page paper in which you:

1. Provide a detailed overview of two (2) U.S. publicly traded companies. This should be one to two (1-2) pages.

2. Evaluate the vulnerability of each Organization to external forces such as a recession, higher interest rates, and global competition.

3. Based on the financial trends of each Organization, predict how these trends will impact financial performance in future periods. Explain your rationale for this prediction.

4. Select five (5) financial ratios most appropriate to determining which of these two (2) companies would be a better investment. Perform a financial analysis and draw a conclusion to make this determination.

5. State and support your opinion of each Organization's common stock as an investment opportunity.  Assume that you can only pick one (1) of these companies. Provide a solid defense for the Organization that you would choose.

6. Cite at least five (5) quality references.


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