This website uses cookies to ensure you have the best experience. Learn more

Financial Management Stock Market Entity Performance Comparison

6445 words - 26 pages

Table of Contents31.0 Introduction 32.0 Task 1: Stock Performance vs. market performance 32.1 Comparison of Alufab stock performance with Market performance 82.2 Ratio comparison for AluFab 2010 - 2011 ( Evaluation of the Financial Performance of the company 92.3 Conclusion 93.0 Task 2 - Capital Asset Pricing Model. 93.1 The Relevance of the Capital Asset Pricing Model (CAPM) to investors 113.2 CAPM Calculation 123.2.1 Price per Share Calculation 123.3 Conclusion 134.0 Task 3 - Weighted Average Cost of Capital for Alufab 134.1 Use of WACC and advantage over other models. 144.2 Conclusion 155.0 Task 4 - Performance Appraisal Methods 155.1 Payback period calculation 155.2 Net Present Value ...view middle of the document...

Market performance 2010 - 2011……………

5

Fig.1.5: Comparison of Stock vs. Market performance 2010 - 2011………………

6

Table 1.2: Ratio comparison of Alufab PLC 2010 -2011………………………….

6

Fig.2.1: CAPM Model with Security Market Line (SML) plotted…………………

8

Table 2.1: Capital Asset Pricing model Calculation……………………………….

9

Table 2.2: Calculation of Price per Share of Alufab PLC…………………………..

9

Table 3.1: Calculation of The Weighted Average Cost of Capital………………….

10

Table 4.1: Payback period Calculation………………………………………………

11

Table 4.2: Net Present Value Calculation……………………………………………

12

Table 4.3: The Internal Rate of Return Calculation………………………………….

12

Fig.4.4: Different Forms of Investment Appraisal…………………………………..

13

Fig.4.5: Comparison of Investment Appraisal methods……………………………..

13

IntroductionThe following report consists of the coverage of four areas namely, investment evaluation, which is carried out by the comparison of the stock performance of Alufab - manufacturers and fabricators of Aluminium products, with the market performance, and also by the assessment of financial performance by the comparison of ratios over two years. The calculation of risk by the use of the Capital Asset Pricing Model (CAPM)is undertaken, where the price of a share of Alufab is also calculated by the use of the CAPM. Cost of Capital calculation by the use of Weighted Average Cost of Capital (WACC) and finally implications and description of various forms of investment appraisal methods is included in the body of the report.Task 1: Stock Performance vs. market performance2.1 Comparison of Alufab stock performance with Market performanceThe stock prices fluctuate due to the forces prevailing in the market namely the demand and supply. Thus, the increase in the share price depends on the increase in demand while the increase in supply results due to the shareholders behaviour of selling the shares rather than buying them.Hence, the stock performance for Alufab during the years 2010 and 2011 are compared with that of the market performance...

Find Another Essay On Financial Management - Stock Market Entity Performance Comparison

Environmental Reporting

1008 words - 5 pages with corporate governance. Lastly, they concluded that the corporate governance is positively related to company performance. In addition, Taani and Banykhaled (2011) had conducted a research on the effect of accounting information on earnings per share (EPS) by using five categories of financial ratios among the listed companies in the Amman Stock Market. They found that the movement of earnings per share is affected by financial ratios, return

China's exchange marketing (case) - ASIA PACIFIC UNIVERSITY OF TECHNOLOGY & INNOVATION - ASSIGNMENT

3751 words - 16 pages (By Ecnomy,2016). Source: Bloomberg one of analyst said: meltdown of stocks this year due to global stock market performance and weak growth momentum. Although China's 1.3 percent debt is due to coupon payments that have led to lower bond prices, it is the only bond market that has earned investors this year. Even so, the Chinese bonds have been reduced 1.7 per cent at the end of 2016, because of focus on risk reduction to protect the financial

International financial markets

1410 words - 6 pages , an option is a derivative (because its value changes in relation to the performance of an underlying stock).6. Give the overview of International financial markets participants.To dress an overview of international financial markets participants, we identify the different players at the equity markets as following: 1/ entities that issue the financial assets, 2/ entities, which invest in financial assets. 3/ financial intermediaries. 4/ and

Ratio Analysis

1443 words - 6 pages series of statements.” Advantages of ratio analysis It facilitates the comprehension of financial statements and evaluation of several aspects such as financial health, profitability and operational efficiency of the undertaking. It provides the inter-firm comparison to measure efficiency and helps the management to take remedial measures. It is also helpful in forewarning corporate sickness and helps the management to take corrective action

financial instruments

895 words - 4 pages . This standard not require only quantitative information disclosure like market risk and liquidity risk but it also requires to disclosure of qualitative information about exposure to risk that are a rising from financial instruments .For example, the entity must disclosure the management objectives, polices and planes for managing risks so all of this information and disclosure will help users to make decision. These corrections are

Babcock and brown japan property trust financial analysis

2479 words - 10 pages , retail and residential properties.The Trust was established on 31 January 2005 and became a registered scheme under the Corporations Act 2001 on 17 February 2005. The Trust listed on the Australian Stock Exchange on 4 April 2005.The Trust currently holds interests in a portfolio comprising 35 office, retail and residential properties. The Responsible Entity of the Trust is Babcock & Brown Japan Property Management Limited (a subsidiary of

The Integrity of Capital Markets

1328 words - 5 pages Introduction Capital market is constituted of both primary and secondary markets all of which provide long-term investment opportunities. They are markets for long term funds with maturity period of more than one year. Examples of Financial instruments which are used in capital markets are debentures, terms, loans, bonds, warrants, preference shares and ordinary shares among others. These markets constitute of bond market and stock market in

Deregulation of Motor Carrier Industry

2192 words - 9 pages positiverelationship with the financial performance in the deregulated environment. Firms with largeteams, broader functional representation, and greater strength, in market functions, will be morelikely to compete successfully under deregulation. In a study of the management characteristics,in the cement industry, Sara Keck found that the profitability of a firm was directly related to thefunctional heterogeneity of the management team in a positive and

Risk Management in Stock Valuation and Markets

2705 words - 11 pages result of some factors that influence the performance of the financial market. It can occur in the situation such as recession, fluctuating interest rates ("market risk,"). Methods of stock valuation Price-earnings method Dividend discount model Free cash flow model Price earning model Price-earning (PE) ratio is relatively easy method of stock valuation. It is based on the expected earning instead of recent earning (Madura, 2011). P/E ratio can be

Qualitative and Quantitative Performance Analysis of BlueScope Steel Limited - MBA - Assignment

3382 words - 14 pages operating profit growth. BSL higher ratio of 7.3 in comparison with the industry average of 1.7, indicates that BSL possess stronger financial strength. 2.4 Market value Market value is defined as the price at which an asset would trade for in a competitive market, therefore market value ratios are basically used to answer the questions of how a company's shares are valued in the stock market by analysing the company's performance in terms of how

Financial Instruments, Institutions and Market module - FIN301 - Assignment

6176 words - 25 pages after examinations was carried out for periods before and after the Asian financial crisis. It was found out that there is no impact on the market efficiency. (Hoque et al., 2007[footnoteRef:4]) The market efficiency slowly picked up after the crisis, rather than falling. [4: ] H. Hoque, H.K. Jae, C.S. Pyun, A comparison of variance ratio tests of random walk: a case of Asian emerging stock markets, Int. Rev. Econ. Finance 16 (2007) 488e502

Similar Essays

Comparison And Analysis Of P/E Ratios On The Trinidad And Tobago Stock Market

1085 words - 5 pages about twenty nine (29) listings on this stock exchange made up of all TT and cross listed stocks, with about six different sectors (banking, non-banking finance, conglomerates, manufacturing, property and trading). Together, these carry a market capitalization value of estimated $TT114 billion dollars ($96billion All T&T and 18 billion cross listed), where conglomerates and financial institutions account for the majority of this value. Investors

"The Stock Market Is Shortsighted, That It Only Cares About The Next Quarter's Performance." Do You Agree Or Disagree With This Statement And Why?

1184 words - 5 pages value and so long-term dividends.The Short-sighted Stock marketFirstly looking at the market I agree with the statement "stock market is short-sighted, and that it only cares about the next quarter's performance." However I don't agree it should be a managerial complaint, in fact I would suggest that it is a very good datum check for the organisation to react strategically to the markets acceptance of the organisations activities and performance be

Stocks: Fundamental Analysis

2512 words - 10 pages important to underline the difference between the two analyses. Technical analysis lies in thinking that "historical price series, trading volume, and other market statistics exhibit regularities" (Vaknin, Sam, par. 10) and past prices can predict changes. Fundamental analysis in its turn pays attention to the value of the stock and "refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements

Success Factors In Supply Chain Management

971 words - 4 pages requirements are well thought-out, such as warehousing, orders, return processing, carrier/delivery service, and invoicing.Supply Chain Management Software Package ComparisonFor the SCM software package review, there were three companies in the comparison: SAP Supply Chain, PackManager, and IBS Enterprise. One area of concern was with PackManager whereby once installed technology support is not a provision. Daniels and Daniels (2012) indicate the areas of