ABC Investing Class – 2 Analyzing Company Shobha Narasimha.

Slides:



Advertisements
Similar presentations
Cost of Capital Rate of return required by firm’s investors
Advertisements

Unit 5 Microeconomics: Money and Finance Chapters 11.2 Economics Mr. Biggs.
EQUITY FINANCING Securities: S TOCKS & S HARES EQUITY FINANCING Shares (GB) = Stocks (USA) Flotation (GB) = IPO (USA) Nominal/Face/Par value Market.
Bonds and Stocks.
Chapter 5: Second Half.  Each year, a corporation may distribute to its shareholders dividends  Dividends are part of a company’s profits  Dividends.
The Third Quiz Review. What does “caveat emptor” mean?
Bonds & Fixed-Income Securities Investment Strategies.
Strategic Business Planning for Commercial Producers Risk and Risk Balancing: What are the Risks and How Can I Manage Them?
Risk and Risk Balancing: What are the Risks and How Can I Manage Them?
Optimal Capital Structure The Cost of Capital Approach P.V. Viswanath Based on Damodaran’s Corporate Finance.
Stock Market Basics. What are Stocks? Stock is ownership in a publicly traded company. Stock is a claim on the company’s assets and earnings. The more.
Chapter 14.  To make informed decisions about a company  Generally based on comparative financial data 2Copyright (c) 2009 Prentice Hall. All rights.
Unit 4. Money Three Uses: Medium of Exchange Barter Economy vs. Monetary Economy Unit of Account Store of Value Six Characteristics of Currency Durability.
Stock Market Basics ©2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website,
Bond Basics 1 Dr. Craig Ruff Department of Finance J. Mack Robinson College of Business Georgia State University © 2014 Craig Ruff.
Chapter 12 Types of financial instrument
ABC Investing By Shobha Narasimha. ABC Investing
Financial Statement Analysis
Bond Valuation Essentials of Corporate Finance Chapters 4 & 6 Materials Created by Glenn Snyder – San Francisco State University.
Investment Basics Clench Fraud Trust Investment Workshop October 24, 2011 Jeff Frketich, CFA.
The Stock Market Understand the risks Describe how stocks are traded
Financial Markets: Saving and Investing
Intro to Financial Management
Chapter( 7 B) Default Risk Salwa Elshorafa 2009 © 2005 Pearson Education Canada Inc.
Seminar: Timely Topics for Today’s Business World Mr. Bernstein Bonds (aka Fixed Income) December 22, 2014.
 Why is it important for you to start saving now? SLID E 1.
Background Synergy Value Evaluation Equity Value Cost of Capital Calculation – WACC components Cost of equity Cost of debt D/E ratio Tax rate.
CHAPTER 6 Investing in Fixed Income Securities. OVERVIEW Fixed income securities represent borrowing by governments and corporations Ratings agencies.
ANALYSIS OF FINANCIAL STATEMENTS Using Ratios Presented by the Arkansas Securities Department.
Stock Market Analysis and Personal Finance Mr. Bernstein Bonds (aka Fixed Income) pp March 11, 2015.
McGraw-Hill/Irwin ©2008 The McGraw-Hill Companies, All Rights Reserved Chapter Ten The Investment Function in Banking and Financial Services Management.
Bond Prices Over Time Yield to Maturity versus Holding Period Return (HPR) Yield to maturity measures average RoR if investment held until bond.
Weighted Average Cost of Capital WACC Chapter - 12.
Financial Markets Investing: Chapter 11.
Financial Ratios Clicker Quiz. What is this ratio? Market Price Per Share Earnings Per Share A. Inventory Turnover B. Accounts Receivable Turnover C.
Financial markets Types of financial institutions Determinants of interest rates Yield curves The Financial Environment: Markets, Institutions,and Interest.
Chapter 11: Financial Markets Section 2
CF Winter Bonds & Beyond ch 7 What’s a Bond, Again? “bond” = “note” = “debenture” a loan  a promise to pay certain amount on a certain.
FINANCE MAP By Gaylen K. Bunker. Objectives of Workshop Principles: Time lag between investment and return. Compounding versus Summing Value = Discounted.
Revise Lecture 9. Q1: What is capital market? Revise Lecture 9 Q2: What is primary and secondary markets?
Chapter 14.  To make informed decisions about a company  Generally based on comparative financial data ◦ From one year to the next ◦ With a competing.
1 CDO: Collateralized Debt Obligation The New Choice in Global Reinsurance.
BONDS (DEBT FINANCE). CORPORATE FINANCE (sources of funds) COMPANIES: 1. generate internal cash flows / undistributed profits 2. issue shares (equity.
Chapter 2 Financial Markets and Institutions
2,532 NDIRF Membership Schools Other City County 2014 MEMBERS’ PREMIUM DISTRIBUTION.
Today’s Schedule – 11/12 Calculating Compound Interest PPT: Saving & Investing Part2 HW: – Read 21.2.
BUS 353 Part I: Understanding Capital Markets. A. Capital 1.Capital is defined as wealth, generally money or property 2.Capital Providers – people and.
Financial Statement Analysis Chapter 9
2- 1 Chapter Approach  Chapter 2  Financial Markets  Road to success with this chapter material Read Chapter 2 first Print the chapter handout Take.
Session 6: Estimating cost of debt, debt ratios and cost of capital
SESSION 6: ESTIMATING COST OF DEBT, DEBT RATIOS AND COST OF CAPITAL ‹#› Aswath Damodaran 1.
1 Lecture 2: Financial markets Mishkin chapter 2 – part A Page 23-28,
Dell is Going Private Case Study 1. 2 Why DELL going private?  Major reasons  Autonomy  Leadership  Strategy  Customers  Shareholders  ….. 3.
Global Financial Regulatory Framework Regulating International Capital Market Masters in Accountancy (MACC508)
INTRODUCTION TO WALL STREET: FIXED INCOME & CAPITAL MARKETS MICHAEL WRIGHT.
Money Investments  What is an investment?  Investment is something bought for future financial benefit.  Promotes economic growth  Contributes to wealth.
Cluster 3 Financial Statements and analysis. Net Sales Less Cost of goods Sold = Gross Profit from Sales Less Fixed Operating Expenses Less Depreciation.
ECONOMICS CHAPTER 11: FINANCIAL MARKETS SECTION 2: BONDS AND OTHER FINANCIAL ASSETS.
Financial Markets Financial Assets-claim on the property or income of the borrower Financial Intermediary-institution that helps channel funds from savers.
The Value of Common Stocks
Stock Market Analysis and Personal Finance
Financial Statement Analysis
Investing in the BOND MARKET
Financial Statement Analysis
Fundamentals of Finance Bob Donchez
Fundamentals of Finance Tom C. Nelson, PhD
Financial Markets and Risk
Valuation of Bonds Bond Key Features
© 2014 Cengage Learning. All Rights Reserved.
Chapter 5.4.
Presentation transcript:

ABC Investing Class – 2 Analyzing Company Shobha Narasimha

Rising Money Any company can rise money in two ways Debt (loan ) Equity

Debt – Corporate Bond Debt Corporate Bond AAA – low risk, low rate of return AA+,AA,AA-,--- BBB, BB, CCC+, CCC– Risk and Rate of Return increases AAA – is called high grade bond BB, ---- CC, are called Junk Bonds or high yield

Equity Primary Shares when company issue first time shares/stocks Primary Shares Money Goes to Company Secondary Shares that are trade in the market Company is not involved in secondary Shares trade

Secondary Market Buyer Seller

Market Capitalization Outstanding shares * Stock Price Market Capitalization Market Capitalization Fluctuates daily along with stock price

Simple Balance Sheet

Debt to Asset Ratio Total Debt/Total Asset This ration too much is not good Why? Interest Expense

Find Out Find Out what is Apple Market capitalization Find out Debt /Total asset ratio for Starbucks Pick a random company and find out what it is doing

Evaluate Company What is a particular company doing What is its debt / Total asset ratio Pick company debt/asset ratio < 20%