Assignment Details
This assignment builds upon your work in Units 14.
Stock analysts scrutinize the financial data of companies to guide investors on investment decisions.
As a stock analyst, prepare a pitch book for a client who may want to invest in one of the two companies that you have researched. Utilize all of the information that you gathered from previous assignments in your presentation. In addition to that information, accomplish the following:
Calculate the intrinsic price of both stocks with a stock valuation model.
Forecast each companys future income statement utilizing forecasted growth rates.
Conduct a SWOT analysis for both companies.
Recommend which of the two companies is the best investment.
Click on the following link to see a sample pitch book template:
Pitch Book Template Example
Deliverable Requirements: Your pitch book presentation should have at least 75 slides (15 slides/per unit = 75 slides total) as an accumulation of all the slides from previous units. Limit the text on each slide, and use visuals to help engage your audience. The Notes section and APA-formatted references must be included within your presentation.
Submitting your assignment in APA format means, at a minimum, that you will need the following:
Title slide: Remember the running head. The title should be in all capitals.
Length: There should be at least 75 slides.
Body slides: This begins on the slide following the title slide and must be double-spaced (be careful not to triple- or quadruple-space between paragraphs). The typeface should be 12-point Times New Roman or 12-point Courier in regular black type. Do not use color, bold type, or italics, except as required for APA-level headings and references. The deliverable length of the body of your presentation for this assignment is 15 slides. In-body academic citations to support your decisions and analysis are required. Using a variety of academic sources is encouraged.
Reference slide: References that align with your in-body academic sources should be listed on the final slide of your presentation. The references must be in APA format and use appropriate spacing, hanging indentation, italics, and uppercase and lowercase as appropriate for the type of resource that is used. Remember that the reference slide is not a bibliography but a further listing of the abbreviated in-body citations used in your presentation. Every referenced item must have a corresponding in-body citation.
Please submit your assignment.
Grading Rubric: Maximum 140 Points
Grading Criteria Points
Deliverable requirements addressed; understanding of material and presenters message and intent are clear 60 points Followed assignment guidelines and criteria 30 pts Yes/Complete Mostly Not at all
Overall quality 30 pts Excellent Satisfactory Needs Improvement
Scholarly research that supports the presenters position is properly acknowledged and cited, and direct quotations do not exceed 10% of the word count of the body of the assignment deliverable 30 points Title slide, agenda, tables, exhibits, appendices or reference slides included 15 pts Yes Partially Not at all
Content is original with less than 35% match 15 pts Yes 3650% 51% or over
Critical thinking: Position is well-justified; logical flow; examples 15 points Position is justified with examples 7.5 pts Excellent Satisfactory Needs Improvement
Presentation flows logically 7.5 pts Excellent Satisfactory Needs Improvement
Structure: Includes introduction and conclusion slides, proper slide formatting, and reads as a polished, academic or professional presentation, as appropriate for the required assignment deliverable 15 points Includes introduction and conclusion slides 5 pts Excellent Satisfactory Needs Improvement
Slides are formatted properly with 5 lines of text 5 pts Excellent Satisfactory Needs Improvement
Reads as polished academic or professional presentation 5 pts Excellent Satisfactory Needs Improvement
Mechanical: No spelling, grammatical, or punctuation errors 15 points Spelling and grammar are accurate 10 pts Yes Partially Not at all
Punctuation is accurate 5 pts Yes Partially Not at all
APA: Deliverable is cited properly according to the APA Publication Manual 5 points References are cited in accordance with APA formatting 2.5 pts Yes Partially Not at all
Reference slide is included 2.5 pts Yes Partially Not at all
This assignment will also be assessed using Signature Assessment criteria for the purpose of internal review of the degree program.
Reference
DeChesare, B. (2021). Stock pitch guide: How to pitch a stock in interviews and win offers. Mergers & Inquisitions. https://www.mergersandinquisitions.com/stock-pitch-guide/
Chapter 10
Forecasting Financial Statements
LEARNING OBJEC TIVES
Understand the general forecasting principles and the seven steps of the forecasting framework.
Build forecasts of future balance sheets, income statements, and statements of cash flows by applying the seven-step forecasting framework to project a. revenues. b. operating expenses. c. operating assets and liabilities. d. financial leverage, capital structure, and financial income and expense items. e. provisions for taxes, net income, dividends, share repurchases, and retained earnings.
f. a balance sheet that balances. g. cash flows. Know how and when to use shortcut forecasting techniques. Validate your forecast assumptions and results. Test the sensitivity of your forecasts to variations in critical assumptions and parameters. Build forecast models that are flexible and comprehensive, enabling you to respond quickly and effectively when a company announces important new information.
Chapter 12:
Valuation: Cash-Flow-Based Approaches
Describe cash-flow-based valuation models and their conceptual and practical strengths and weaknesses.
Measure free cash flows for all debt and equity stakeholders, as well as free cash flows for common equity shareholders, and explain when it is appropriate to use each measure.
Estimate firm value using the:
a. present value of future free cash flows for common equity shareholders, discounted at the required rate of return on equity capital.
b. present value of future free cash flows for all debt and equity stakeholders, discounted at the weighted-average cost of capital
Understand how to implement the free-cash-flows-based valuation approaches by applying them to estimate share value for Clorox. Assess the sensitivity of firm value estimates to key valuation parameters such as discount rates and expected long-term growth rates.
12 Chapter Overview T
his chapter develops free-cash-flows-based valuation approaches and applies them to Clorox. If you are not familiar with the forecasting techniques we introduced
Chapter 13
Valuation: Earnings-Based Approach
Describe earnings-based valuation and explain the different valuation implications of earnings, dividends, and free cash flows.
Explain the conceptual and practical strengths and weaknesses of earnings-based valuation. Demonstrate a conceptual understanding of residual income valuation by
a. utilizing book value of common shareholders equity, comprehensive income, dividends, and clean surplus accounting.
b. measuring required income. c. measuring residual income. d. determining the value of common equity.
Demonstrate a conceptual understanding of residual income valuation with finite forecast horizons and continuing value computations.
Apply the residual income valuation approach to value the common shares of Clorox.
Assess the sensitivity of share value estimates to key parameters, such as discount rates and expected long-term growth rates. Describe four important implementation issues for the residual income valuation approach.
Identify potential causes of errors if the residual income, free cash flows, and dividend valuations do not produce identical value estimates.
Chapter 14
Valuation: Market-Based Approaches
Explain the practical advantages and disadvantages of using market-based valuation multiples such as market-to-book (MB) and price-earnings (PE) ratios to assess the capital markets relative valuation of a particular stock. For market-to-book (MB) ratios: a. Apply a version of the residual income valuation model to compute the value-to-book (VB) ratio.
b. Make investment decisions by comparing the VB ratio to the MB ratio.
c. Explain why VB and MB ratios differ across firms and the impact of the following factors on VB and MB ratios: (1) risk and the cost of equity capital, (2) growth, (3) differences between current and expected future earnings, and (4) alternative accounting methods.
LO 14-3 For price-earnings (PE) ratios:
a. Understand the theory and the practical approach to compute and use the firms value-earnings (VE) ratio, and compare it to the PE ratio.
b. Incorporate growth into the PE ratio to compute the price-earnings-growth (PEG) ratio.
c. Use PE and PEG ratios to analyze share prices over time and across firms, and to make investment decisions.
d. Explain why VE and PE ratios differ across firms and the impact of (1) risk and the cost of equity capital, (2) growth, (3) differences between current and expected future earnings, and (4) alternative accounting methods
Reverse engineer a firms stock price to determine the implied expected return or the implied expected long-run growth rate. Explain the notion of capital market efficiency in valuation and the empirical evidence on the degree to which the capital markets efficiently impound earnings information into share Prices.
