Apple, INC /AN

This project consists of three major activities:
Conduct secondary research (i.e. library, internet, etc)
Write research paper computing the financial ratios yourself.
Power Point Presentation supporting your Research Paper.

The Project to be addressed by the Paper:
You have just graduated from Keiser University’s MBA program and have secured a position as a fund manager for a well known investment banking house. You have been given $25 million to manage/invest in a single stock. The fund is a pension/retirement fund so its perspective is long term with moderate risk of loss of capital and a required return of 9% per annum. Determine if the fund you are managing should invest $25 million dollars in the stock of the company you have selected for your first analysis/investment decision. The company to invest in is Apple, INC
NOTE: Most of the data needed for this assignment can be found in Yahoo/finance and the SEC.gov (Search Edgar files for your company’s financial statements). Go to Yahoo/finance, select your company, and view the table of contents on the left side of the page.
Your analysis, based on the concepts covered in this course, will address each of the following:
Business Strategy Analysis: Develop an understanding of the business and competitive strategies of the company. Which of the three generic competitive strategies does the company utilize (low cost provider, differentiation, focus)? What is the company’s primary strategic goals? What are its strategic goals related to corporate responsibility (e.g. environmental, social, ethical)? This should be covered in not more than two (2) pages. Do not spend time writing a history of the company. This is an analysis, not a history lesson.
Accounting Analysis: Do the accounting practices adopted by the company generally reflect an accurate picture of the economic performance of the company? Did your research find any public announcements of restatement of earnings or other financial statements that would indicate that the financial statements may be of dubious value? This can be done by reviewing the company’s 8K filings with the SEC (a mandatory requirement for this paper). These filings can generally be found on the company’s website under Investor Relations – SEC filings. Some companies may have press releases on financial issues.
Financial Analysis: Analyze financial ratios and cash flow measures of the company relative to its historical performance. For purposes of this research paper a 2 year look back is sufficient and required. Use the attached Piotroski Method 9-point scoring system (attached) to assess your company’s performance in the areas of Profitability, Leverage, and Operating Efficiency. Compare your company’s performance in each area with the industry average or a top competitor. Show your calculations of each ratio. What is the company’s financial management philosophy (Conservative or risk-taker)? What is the company’s dividend policy? Describe the company’s corporate structure or how does it finance its assets?
Prospective Analysis: Develop forecasted performance measures and list the assumptions associated with your forecast. List your assumptions and reasons for your forecast. You may also cite the works of other analysts who have published forecasted earnings for the time frame you are addressing. (Hint: take a look at Yahoo/finance – analysts opinion. What major changes have occurred in the company (e.g, mergers or acquisitions) and the industry (e.g. innovation, competitor mergers or acquisitions, economic/political. consumer perspective that could impact future cash flows?
Conclusion: Will you or will you not invest $25 million in this particular Company? Support your conclusion? Remember a negative conclusion is just as valid and valuable as a positive conclusion.
Conducting Library Research:
Participate in a research orientation offered by the graduate librarian.
Conduct a search for sources that offer accurate information on your company. A minimum of six legitimate and valid relevant resources are required.
Note: An excellent place to start is in University’s library LIRN database. Enter LIRN, go to INFOTRAC, in INFOTRAC enter “Business and Company Resource with PROMT and Newsletters. Enter the name of your company. Under your company you will find items such as “Historical”, “Investment Reports”, “Financial” and other data. You can find Industry Analysis in Standard & Poor’s. Individual company information may be found in Value Line and Morningstar. Additional information can generally be found on the company’s website under “Investor Relations”. Here you will find SEC 10-K, 10Q, 8K’s and other filings. You may also wish to visit the website of the Securities and Exchange Commission (SEC) for filings by your company.
Avoid general Internet key word searches. Wikipedia and other unauthorized sources are inappropriate for graduate work. Articles noting up to date information is such sources as The Wall Street Journal, Barron’s or Business Week may be useful in addressing the appropriateness of current strategies, resource pricing, etc. given market conditions or the status of competitors.

Preparing the Presentation:
Presentations will be made in class during the last day of class. Use not less than 5 slides and not more than 8. The presentation will be supported by Power Point slides and will last not less than 8 minutes or more than 10 minutes (Brief Executive Committee length).

Piotroski, j. (2000). Value Investing: The use of historical financial statement information to separate winners from losers. Journal of Accounting Research, Vol.38, Supplemental, pp 1-42.