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AC223 Project – Spring 2024
About the Project
This file provides you detailed in
AC223 Project – Spring 2024
About the Project
This file provides you detailed information about the project.
Please read carefully before you proceed.
About
This project requires you to implement the accounting knowledge you have learned from AC223 in a hypothetical investment scenario. Other than enhancing the accounting knowledge learned from AC223, this project also provides you opportunities to develop critical thinking, communication and basic excel skills that are essential in any business setting.
In this project, you take the role of a fund manager who just received $100,000 fund from a wealthy client. You are required to use information from public companies’ financial statements to analyze the companies’ performance and make investment decisions on behalf of this client.
Instructions
This project can be completed by a group of up to 4 people. You need to let me know the names of your group members by March 8th, 2024. It is your responsibility to frequently communicate and meet (either in-person or virtually) with your team to work on the project. To ensure every group member actively engages in this project, each person will be required to submit a Peer-Evaluation Survey. In this survey, you will be asked to evaluate the other group members’ contributions and their work ethics. About 20% of your project grade (20 out of 100) is based on how your peers evaluate you. A grading rubric is presented in Table 1 below.
Please follow the instructions below:
Step 1: Identify 5-10 public companies from the lists using any of the links below:
https://finance.yahoo.com/calendar/earnings?from＝2024-04-07&to＝2024-04-13&day＝2024-04-11
https://finance.yahoo.com/calendar/earnings?from＝2024-04-07&to＝2024-04-13&day＝2024-04-12
https://finance.yahoo.com/calendar/earnings?from＝2024-04-14&to＝2024-04-20&day＝2024-04-15
https://finance.yahoo.com/calendar/earnings?from＝2024-04-14&to＝2024-04-20&day＝2024-04-17
https://finance.yahoo.com/calendar/earnings?from＝2024-04-14&to＝2024-04-20&day＝2024-04-18
The purpose of this step is to form a list of candidate companies you may want to invest in. You are encouraged to conduct a quick search on each company from the list using Google search engine or Google/Yahoo Finance. This step helps you get familiar with the companies’ background and past performance that facilitate your portfolio formation. (Information to look for: recent news about the companies’ business strategies or operations, historical stock returns, any relevant industrial/economic impacts, or financial analysts’ recommendations, etc.)
Step 2: Finalize your 3-company portfolio and conduct an in-depth financial analysis on each company based on information from its 10Qs (Quarterly Reports). Public companies’ quarterly reports are available on the SEC database EDGAR:
https://www.sec.gov/edgar/searchedgar/companysearch
You can input a company name/symbol on the search bar to get access to the company’s financial statements.
Use the four most recent quarterly reports of each company in your portfolio to extract financial information for ratio analysis.
In this step, you may input each firm’s financial information on an excel spreadsheet. Only take the information you determine useful in your ratio analysis. Once essential information has been summarized, you can do calculations and comparisons on the spreadsheet. The ratios you analyze do not need to be the ones we cover in class. However, you need to correctly interpret the ratios you calculate and use them to support your decisions.
Step 3: Allocate the $100,000 fund among the three companies based on your analysis in Step 2. In this step, you are expected to do a ratio analysis that compares a company’s financial performance throughout time and compares its performance with the other portfolio firms (or its competitors).
Step 4: Provide a clear and concise overview of your investment choices for the client.
You are required to include the following in your final deliverable:
1. List 3 company names and expected dates of their April earnings announcements. Briefly describe your selection process and introduce your portfolio companies (must be 3 companies): e.g., size, industry, or any other useful information. Explain why you select the companies in your portfolio. (25 pts)
2. Analyze each portfolio company’s financial information.
a. You are expected to incorporate your interpretations and opinions based on the ratio analysis you have done. Your ratio analysis must include at least 3 profitability ratios. (25 pts)
b. Append any data (or visualized data) to support your decisions. (15 pts)
3. Explain your fund allocation. You need to include the number of shares and purchase price of each stock investment. Explain your fund allocation rationales. (15 pts)
Table 1. Project Rubric
Item
Points
Performance metrics (Listed based on importance)
Part 1
25
List company names and dates of earnings announcements correctly. (5)
Demonstrate understanding about the portfolio companies’ background and status. (10)
Arguments are logical and clear. (10)
Part 2
40
Appropriately use and correctly interpret financial ratios (10)
Demonstrate logical comparisons (10)
Demonstrate an effective use and analysis of available data (15)
Clearly present evidence (5)
Part 3
15
Clearly demonstrate fund allocation and investment details (10)
Present your investment decisions in a professional manner (5)
Peer assessment
15
Contribution to final report (5 pts)
Group meeting participation (5 pts)
Willingness to learn and explore (5 pts)
Peer-Evaluation Survey
5
Submit Peer-Evaluation Survey before the deadline (April 29)
Total
100
Bonus
10
An additional 10-point bonus will be given to the top 3 groups that gain the most from the investment.
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