Project 1 Re submission
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Project – Part 1 Portfolio Construction - Asset Allocation
FSMA-6020-01 Investment Analysis
Symbol
Company Name
Average
Price
Paid
Quantity
Profit Loss
Profit Loss Percentage
AAPL
Apple Inc
171.35
100
356.00
2.08%
AMGN
AMGEN Inc.
264.62
10
4.60
0.17%
AMZN
Amazon.com
Inc.
127.26
100
-130.00
-1.02%
GOOGL
Alphabet Inc -
Ordinary Shares -
Class A
130.99
50
204.00
3.11%
META
Meta Platforms
Inc - Ordinary
Shares - Class A
301.42
27
90.99
1.12%
MSFT
Microsof
Corporation
316.12
30
97.20
1.02%
NFLX
NetFlix Inc
369.23
10
33.60
0.91%
NVDA
NVIDIA Corp
435.76
30
333.60
2.55%
SBUX
Starbucks Corp.
92.41
30
-1.20
-0.04%
TSLA
Tesla Inc
250.09
100
996.00
3.98%
NASDAQ (Historical Prices)
Date
Open
High
Low
Close
Adj Close
Volume
2023-
09-29
14853.35
14901.85
14664.78
14715.24
14715.24
5,138,500,00
0
2023-
10-02
14717.90
14892.18
14701.52
14837.57
14837.57
4,554,700,00
0
2023-
10-03
14744.05
14819.87
14504.14
14565.62
14565.62
4,684,310,00
0
2023-
10-04
14613.23
14803.04
14592.56
14776.25
14776.25
4,308,070,00
0
The tables above include the stock purchase price and number of stocks bought this past
Friday, September 29, 2023, before end of day for the market and Thursday, October 5, 2023, as
indicated since last feedback. As part of this project, I would be following up the stock
movement to incorporate the appropriate P/L and RoR, the current data is based on last update
completed on Thursday, October 5, 2023, as well.
I have decided to focus on the NASDAQ Composite Index which is a market
capitalization-weighted index of more than 2,500 stocks listed on the Nasdaq stock exchange. It
is a broad index that is heavily weighted toward the important technology sector (55.32%),
followed by consumer discretionary (18.80%) and healthcare companies (8.08%).
The Nasdaq Composite Index produced an annualized return of 14.66% over the 10 years
through July 7, 2023. Because the Nasdaq Composite is dominated by the historically volatile
technology sector, index performance tends to be more volatile than that of the S&P 500 or the
Dow Industrials.
However, it is important to understand that technology companies are the driving force
behind today’s economy, driving the economy forward with products that they are bringing to
market and the ways in which they operate, leading to this high volatility not just on the
downside but also on the upside, leading to higher-than-average rate of returns, which is
essentially what investor with higher risk acceptance would prefer. Therefore, the selection of
this index for my project.
Annual Returns over SPX
YEAR NDX SPX
2008 -41.89% -38.49%
2009 53.54% 23.45%
2010 19.22% 12.78%
2011 2.70% 0.00%
2012 16.82% 13.41%
2013 34.99% 29.60%
2014 17.94% 11.39%
2015 8.43% -0.73%
2016 5.89% 9.54%
2017 31.52% 19.42%
2018 -1.04% -6.24%
2019* 17.93% 13.57%
Expected US Stock 1yr performance (Median Average Analyst estimates)
MSFT
+26.70%
400.00. Engages in the development and support of software, services,
devices, and solutions. Operates through the following business segments: Productivity and
Business Processes, Intelligent Cloud, and More Personal Computing. Microsoft is exposed to
economic risk from foreign currency exchange rates, interest rates, credit risk, equity prices, and
commodity prices. A portion of those financial risks is hedged, but they may impact their
financial statements.
Market Cap
2.373T
Beta (5Y Monthly)
0.90
PE Ratio (TTM)
32.99
EPS (TTM)
9.68
Earnings Date
Oct 23, 2023 - Oct 27,
2023
Forward Dividend &
Yield
3.00 (0.96%)
Ex-Dividend Date
Nov 15, 2023
Management Effectiveness
Profit Margin
34.15%
Operating Margin (ttm)
41.77%
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Return on Assets (ttm)
14.25%
Return on Equity (ttm)
38.82%
AAPL
+16.83%
200.00. Engages in the design, manufacture, and sale of smartphones,
personal computers, tablets, wearables and accessories, and other varieties of related services. It
operates through the following geographical segments: Americas, Europe, Greater China, Japan,
and Rest of Asia Pacific. Sector: Electronic Technology. Industry: Telecommunications
Equipment.
Apple's international exposure mainly arises from the goods it sells, but there is also
some indirect risk that it faces with its suppliers. The direct risk arises when selling in foreign
markets, with the price of goods denominated in foreign currencies. At the retail level, Apple
aims to achieve pricing parity worldwide. The price of an Apple product in a foreign currency
will be the equivalent of that product's USD price on the domestic market. The company
therefore is exposed to risk when it attempts to repatriate earnings from foreign countries back to
the United States. There is significant exposure to the pound, the euro, the yen, CAD, AUD,
HKD, SGD, as well as the won and yuan.
Market Cap
2.735T
Beta (5Y Monthly)
1.27
PE Ratio (TTM)
29.30
EPS (TTM)
5.97
Earnings Date
Oct 25, 2023 - Oct 30,
2023
Forward Dividend &
Yield
0.96 (0.56%)
Ex-Dividend Date
Aug 11, 2023
Management Effectiveness
Return on Assets (ttm)
20.90%
Return on Equity (ttm)
160.09%
AMZN
+37.68%
175.00. This is a multinational technology company, which engages in
the provision of online retail shopping services. It operates through the following segments:
North America, International, and Amazon Web Services (AWS). Sector: Retail Trade. Industry:
Internet Retail. The international exposure is significant due to the fluctuations, operating results
that may differ materially from expectations, and record significant gains or losses on the
remeasurement of intercompany balances.
Market Cap
1.3T
Beta (5Y Monthly)
1.24
PE Ratio (TTM)
104.10
EPS (TTM)
1.21
Earnings Date
Oct 25, 2023 - Oct 30,
2023
Forward Dividend &
Yield
N/A (N/A)
Ex-Dividend Date
N/A
Management Effectiveness
Return on Assets (ttm)
2.47%
Return on Equity (ttm)
8.71%
NVDA
+43.71%
625.00. engages in the design and manufacture of computer graphics
processors, chipsets, and related multimedia software. It operates through the following
Profit Margin
24.68%
Operating Margin (ttm)
29.23%
Profit Margin
2.43%
Operating Margin (ttm)
3.29%
segments: Graphics Processing Unit (GPU), Tegra Processor, and All Other. Sector: Electronic
Technology. Industry: Semiconductors. Expanded export controls on AI chips are by far the
biggest risks to Nvidia's exuberant outlook provided back in May, so investors should consider
their exposure at this point.
Market Cap
1.3T
Beta (5Y Monthly)
1.24
PE Ratio (TTM)
104.10
EPS (TTM)
1.21
Earnings Date
Oct 25, 2023 - Oct 30,
2023
Forward Dividend &
Yield
N/A (N/A)
Ex-Dividend Date
N/A
Management Effectiveness
Return on Assets (ttm)
2.47%
Return on Equity (ttm)
8.71%
GOOGL
+14.64%
150.00. Engages in the business of delivering online advertising,
cloud-based solutions that provide enterprise customers with infrastructure and platform
services, the provision of communication and collaboration tools, and sales of other products and
services such as apps and in-app purchases, hardware, and subscription-based products. Sector:
Technology Services. Industry: Internet software/services.
Google faces serious domestic and international exposure over anti-trust lawsuits and
regulatory challenges. In 2015-16, the European Union brought charges against Google for
Profit Margin
2.43%
Operating Margin (ttm)
3.29%
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manipulating search results to promote its own shopping sites. Facing billions in fines, Google
could join the likes of Microsoft and Intel among companies successfully targeted by the EU.
Market Cap
1.709T
Beta (5Y Monthly)
1.06
PE Ratio (TTM)
28.39
EPS (TTM)
4.79
Earnings Date
Oct 23, 2023 - Oct 27,
2023
Forward Dividend &
Yield
N/A (N/A)
Ex-Dividend Date
N/A
Management Effectiveness
Return on Assets (ttm)
12.96%
Return on Equity (ttm)
23.33%
TSLA
+11.08%
278.00. Engages in the design, development, manufacture, and sale of
fully electric vehicles and energy generation and storage systems. The company operates through
the following segments: Automotive and Energy Generation and Storage. Sector: Consumer
Durables. Industry: Motor Vehicles. The company has manufacturing facilities in the US,
Germany, and China and has operations across the Asia Pacific and Europe. Presence in various
countries insulates the company from the risk associated with economic and political factors of a
specific region.
Market Cap
825.396B
Beta (5Y Monthly)
2.09
Profit Margin
21.05%
Operating Margin (ttm)
26.44%
PE Ratio (TTM)
75.82
EPS (TTM)
3.43
Earnings Date
Oct 18, 2023
Forward Dividend &
Yield
N/A (N/A)
Ex-Dividend Date
N/A
Management Effectiveness
Return on Assets (ttm)
9.94%
Return on Equity (ttm)
27.14%
META
+26.63%
380.00. Engages in the development of social media applications. It
builds technology that helps people connect, find communities, and grow businesses. Sector:
Technology Services. Industry: Internet software / services. Meta has multiple class actions and
derivative actions filed in the US courts and elsewhere, with allegations centered on privacy,
security, and other issues. Meta is currently under review for its compliance with EU GDPR
regulations regarding user data transfer to the U.S.
Market Cap
784.273B
Beta (5Y Monthly)
1.23
PE Ratio (TTM)
35.40
EPS (TTM)
8.61
Earnings Date
Oct 25, 2023
Forward Dividend &
Yield
N/A (N/A)
Ex-Dividend Date
N/A
Management Effectiveness
Profit Margin
12.97%
Operating Margin (ttm)
13.46%
Profit Margin
18.71%
Operating Margin (ttm)
29.22%
Return on Assets (ttm)
11.69%
Return on Equity (ttm)
17.36%
AMGN
-
0.77%
265.00. This is a is a biotechnology company, which engages in the
discovery, development, manufacture, and marketing of human therapeutics. It operates through
Human Therapeutics segment. Sector: Health Technology. Industry: Biotechnology. The
Company is exposed to foreign currency exchange rate and interest rate risks related to its
business operations. To reduce their risks related to such exposures, Amgen uses or have used
certain derivative instruments, including foreign currency forward, cross-currency swap, forward
interest rate and interest rate swap contracts. They do not use derivatives for speculative- trading
purposes.
Market Cap
141.792B
Beta (5Y Monthly)
0.61
PE Ratio (TTM)
17.87
EPS (TTM)
14.83
Earnings Date
Nov 01, 2023 - Nov
06, 2023
Forward Dividend &
Yield
8.52 (3.26%)
Ex-Dividend Date
Aug 17, 2023
Management Effectiveness
Return on Assets (ttm)
8.54%
Return on Equity (ttm)
173.46%
Profit Margin
30.02%
Operating Margin (ttm)
38.44%
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SBUX
+
19.09%
110.00. Engages in the production, marketing, and retailing of specialty
coffee. It operates through the following segments: North America, International, Channel
Development, and Corporate and Other. Sector: Consumer Services. Industry: Restaurants. The
Company’s policy is to have no material open foreign currency positions. As part of its normal
operation, the Company borrows and invests in funds in currencies other than USD. The foreign
exchange risks of these activities are hedged with the Company limits which are approved by the
risk committee.
Market Cap
105.801B
Beta (5Y Monthly)
0.98
PE Ratio (TTM)
27.57
EPS (TTM)
3.35
Earnings Date
Nov 02, 2023
Forward Dividend &
Yield
2.28 (2.55%)
Ex-Dividend Date
Nov 08, 2023
Management Effectiveness
Return on Assets (ttm)
11.14%
Return on Equity (ttm)
N/A
NFLX
+28.16%
477.50. Engages in providing entertainment services. It also offers a
broad set of activities for leisure time, entertainment video, video gaming, and other sources of
entertainment. It operates through the United States and International geographic segments.
Sector: Technology Services. Industry: Data Processing Services. Netflix’s international
expansion faces many challenges. Apart from the difficulties arising from the restrictions
Profit Margin
10.81%
Operating Margin (ttm)
14.48%
imposed by local governments, Netflix also needs to face the intellectual and economic challenge
of creating regional content that could win the favor of local viewers.
Market Cap
165.112B
Beta (5Y Monthly)
1.29
PE Ratio (TTM)
39.72
EPS (TTM)
9.38
Earnings Date
Oct 18, 2023
Forward Dividend &
Yield
N/A (N/A)
Ex-Dividend Date
N/A
Management Effectiveness
Return on Assets (ttm)
7.24%
Return on Equity (ttm)
20.26%
In conclusion, our assumed target annual portfolio turnover will be low (11%) since I will
be following a buy-and-hold investment strategy expecting that high volatility that is
characteristic of this index, while making this a passively managed fund only taking profits when
necessary, and choosing the appropriate buying opportunities when available.
Profit Margin
13.22%
Operating Margin (ttm)
17.51%
Resources
Chen, J. (2023, August 2).
What does the nasdaq composite index measure?
. Investopedia.
https://www.investopedia.com/terms/n/nasdaqcompositeindex.asp
Slen, E. (2019).
Nasdaq global index watch
. Nasdaq-100 Higher Volatility than the S&P 500.
https://indexes.nasdaqomx.com/docs/Nasdaq-
100_Volatility_Index_VOLQ_Methodology_Reference_Guide.pdf
Yahoo! (2023, October 6).
NASDAQ 100 (^NDX) charts, Data & News
. Yahoo! Finance.
https://finance.yahoo.com/quote/%5ENDX?p=%5ENDX
Garnry, P. (2023, June 28).
The dangerous risk to NVIDIAS exuberant outlook
. The dangerous
risk to Nvidias exuberant outlook | Saxo Group.
https://www.home.saxo/content/articles/equities/the-dangerous-risk-to-nvidias-exuberant-
outlook-28062023
Team, T. I. (2022, October 2).
Is Google a good investment?
. Investopedia.
https://www.investopedia.com/investing/google-good-investment/
Damchevski, G. (2022, February 14).
Three scenarios from our risk-benefit analysis for Meta
Platforms, inc. (NASDAQ:FB)
. Yahoo! https://www.yahoo.com/video/three-scenarios-risk-
benefit-analysis-005951298.html
Wu, Y. (Winnie). (2021, July 19).
5 strategic risks for netflix: From competition to regulation
.
Journo. https://journo.com.tr/netflix-strategic-risks
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during the period 2018 to 2020.
田
Cari Farm
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Shareholders’ funds
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7 560 000
Property, plant and equipment
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6 250 000
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4 190 000
4 690 000
Inventories
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2 350 000
Accounts receivable
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2 200 000
Cash
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Ordinary share capital
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3 680 000
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3 800 000
Loan (20% p.a.)
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Cash and marketable securities
Accounts receivable
Inventory
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Fixed assets:
Gross plant and equipment
Less: Depreciation
Net plant and equipment
Other long-term assets
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$470
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$51,878
Accts. recelvable
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200,543
Inventory
450,460
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702,181
Fixed asset, nct
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Bank loan
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91,013
Accrusis
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50, 000
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333,661
272.081
Long-term deot, 12%
398,220
290,301
Common stock, $10 par
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44,555
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95,444
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2016
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Gross profit
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Module 11 I Financial Statement Forecasting
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SATE
OLOGY
STX)
SEAGATE TECHNOLOGY PLC
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BC
$10,390
Revenue.
7,458
Cost of revenue
991
Product development
Marketing and administrative
Amortization of intangibles.
Restructuring and other, net.
453
23
(22)
Total operating expenses.
8,903
Income from operations.
1,487
Interest income
84
Interest expense
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25
Other expense, net.
(115)
Income before incorne taxes
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1,372
(640)
Net income..
$ 2,012
Forecast Seagate's 2020 income statement assuming the following income statement relations (ST
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Cost of revenue
Product development
Marketing and administrative
Amortization of intangibles.
Restructuring and other, net,
Interest income...
Interest expense.
Other, net
Income tax rate.
5%
71.8% of revenue
9.5% of revenue
4.4% of revenue
No change
$0
No…
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Question #5 please!
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What are two kinds of paid-in capital accounts?
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QUESTION ONE
The following financial information relates to Sporty Limited.
Statement of Financial Position as at 31 December 2018 and 2019
Ordinary share capital
Retained earnings
Property, plant and equipment
Investments
Debentures 12.5%
Inventory
Trade debtors
Prepaid expenses
Trade creditors
Bank overdraft
SARS (income tax)
Shareholders for dividends
Profit before interest and tax
Depreciation on equipment
Dividends received on investments
Interest on dividends
Income tax
Page 2 of 6
2019
R
400 000
55 000
230 000
165 000
20 000
124 000
37 000
Statement of comprehensive income for the year 31 December 2019
Note no. 1 for the year ended 31 December 2018 and 2019
Property, plant and equipment
Land and building at cost
Equipment at carrying value
25
000
21 000
5 000
30 000
Statement of changes in equity for the year ended 31 December 2019
Dividends on ordinary shares
2019 (R)
200 000
30 000
230 000
R
R
295 000
5 000
195 000
110 000
2018
60 000
120 000
28 500
1 500
42 500
25 000
R
60…
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Partial Income Statement
Excel Exercise
Compute the Following
ՀԱՐ
Sales
COGS
SG&A
Depreciation
Debt Int. Rate
Tax Rate*
2019
100
40
EBITDA
EBIT
25
Interest
10
EBT
0.08
Tax
0.25
Net Income
?
?
?
?
?
?
Partial Balance Sheet
Debt and Loans
150
Total Equity
150
Total Assets
300
Inv. Change
10
A/R Change
A/P Change
35
20
Net Profit Margin
Equity Multiplier
Verify Dupont ROE
?
סיי
?
?
?
?
?
* Assume all taxes paid in current period (no accrued taxes) for rest of course
CF from Operations
ROE
Asset Turnover
CED
Tt O
24
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