Premium Essay

Investment Class Notes

In: Business and Management

Submitted By mzsalem80
Words 10329
Pages 42
Investment Analysis Summer 2013 – Class Notes

Investments: Background and Issues

Investment - the current commitment of money or other resources in the expectation of reaping future benefits.
Real Assets versus Financial Assets Real Assets – Assets used to produce goods and services. Real assets are tangible assets that determine the productive capacity of an economy, that is, the goods and services its members can create. These include land, buildings, machines, and knowledge that can be used to produce goods and services. Other common examples of investments in Real Assets are paintings, antiques, precious metals and stones, classic cars etc. Higher carrying and storage costs, increased transaction fees and lower liquidity, are some common drawbacks of real assets in relation to financial assets.

– i.e. - land, buildings, equipment & knowledge – Functions to contribute directly to the productive capacity of the economy – Generate net income to the economy – Individual portfolios may include real assets, real estate and commodities (precious metals or agricultural products), through direct investment. • Financial Assets – Claims on real assets or the income generated by them. Financial Assets, or more commonly known as Securities, include stocks, bonds, unit trusts etc. In essence, financial assets or securities represent legal claim on future financial benefits. These are no more than sheets of paper and do not contribute directly to the productive capacity of the economy. Instead, these financial assets are the means by which individuals hold their claims on real assets and the income generated by these real assets – Stocks & bonds, issued by firms/governments, purchased by investors – Do not contribute directly to the productive capacity of the economy –

Similar Documents

Premium Essay

Fin 419 Week 4 Individual Assignment – Assignments from the Readings

...Courses and Exams use this form ( http://hwguiders.com/contact-us/ ) Feel Free to Search your Class through Our Product Categories or From Our Search Bar (http://hwguiders.com/ ) Week 4 – Assignments from the Readings Chapter 14: Problem 14.9 Evaluate the proposed relaxation, and make a recommendation to the firm. (Note: Assume a 365-day year.) To determine whether to relax its credit standards, Lewis Enterprises must calculate its effect on the firm’s additional profit contribution from sales, the cost of the marginal investment in accounts receivable, and the cost of marginal bad debts. Additional Profit Contribution from Sales Sales are expected to increase by 10%, or 1,000 units. The profit contribution per unit will equal the difference between the sale price per unit ($40) and the variable cost per unit ($31). The profit contribution per unit therefore will be $9. The total additional profit contribution from sales will be $9,000 (1,000 units x $9 per unit). Cost of the Marginal Investment in Accounts Receivable FIN 419 Week 4 Individual Assignment – Assignments from the Readings Get Tutorial by Clicking on the link below or Copy Paste Link in Your Browser https://hwguiders.com/downloads/fin-419-week-4-individual-assignment-assignments-readings/ For More Courses and Exams use this form ( http://hwguiders.com/contact-us/ ) Feel Free to Search your Class through Our Product Categories or From Our Search Bar (http://hwguiders.com/ ) Week 4 – Assignments...

Words: 3328 - Pages: 14

Premium Essay

Mw Petroleum

...FI 8320, Spring 2005 Cases and Readings in Corporate Finance [pic] [pic] [pic] [pic] Instructor Professor David C. Nachman Office: RCB 1239 Phone: 651-1696 email: dnachman@gsu.edu Office Hours: W 10:00 am – 2:00 pm, or by appointment Prerequisites FI 8000 CSP: 1, 2, 6 Course Description This course focuses on financial policy-making through case analyses, contemporary readings from the professional literature, and problem solving. The emphasis in the course is on investment and financing decisions and their impact on firm value and on capital market imperfections and their impact on the raising of corporate capital. The course also provides an opportunity for the study of additional topics of special current significance such as capital structure and dividend policy, corporate restructuring and the market for corporate control, real options, risk management, international capital budgeting and financing, financial planning and working capital management, project financing, reorganizations and advanced equity valuation. Course Material Required text material • (BMA) R. A. Brealey, S. C. Myers and F. Allen, Principles of Corporate Finance, 8th ed., McGraw- Hill/Irwin, Inc., 2006. •(RP) Reading Packet •(CP) Case Packet The required text (BMA) and the materials that make up the Case Packet (CP) are available at the GSU Book Store. The Reading Packet (RP) is available at ERes. Contents of (CP) and (RP) (with ERes access instructions) follow...

Words: 2562 - Pages: 11

Free Essay

Abacus Goldman Sachs

...CONFIDENTIAL – INDICATIVE TERMS ABACUS 2007-AC1 $2 Billion Synthetic CDO Referencing a static RMBS Portfolio Selected by ACA Management, LLC February 26, 2007 The information contained herein is indicative only and the actual terms of any transaction will be set forth in the definitive Offering Circular. Capitalized terms but not defined herein shall have the meanings set forth in the definitive Offering Circular. Table of Contents Disclaimer and Risk Factors Exhibit I. Transaction Overview II. Portfolio Selection Agent Overview III. Structure Overview Appendix A. Initial Reference Portfolio B. Selected ACA Biographies C. Goldman Sachs Contact Information 1 Disclaimer The information contained herein is confidential information regarding securities that may in the future be offered by ABACUS 2007-AC1, Ltd. (the “Issuer”). The information is being delivered to a limited number of sophisticated prospective institutional investors in order to assist them in determining whether they have an interest in the type of securities described herein and is solely for their internal use. By accepting this information, the recipient agrees that it will use and it will cause its directors, partners, officers, employees and representatives to use the information only to evaluate its potential interest in the securities described herein and for no other purpose and will not divulge any such information to any other party. Any reproduction...

Words: 13223 - Pages: 53

Premium Essay

Real Option

...FI 4320, Spring 2005 Cases and Readings in Corporate Finance [pic] [pic] [pic] [pic] Instructor Professor David C. Nachman Office: RCB 1239 Phone: 651-1696 email: dnachman@gsu.edu Office Hours: W 10:00 am – 2:00 pm, or by appointment Prerequisites FI 4000 CSP: 1, 2, 4, 6 Course Description This course focuses on financial policy-making through case analyses, contemporary readings from the professional literature, and problem solving. The emphasis in the course is on investment and financing decisions and their impact on firm value and on capital market imperfections and their impact on the raising of corporate capital. The course also provides an opportunity for the study of additional topics of special current significance such as capital structure and dividend policy, corporate restructuring and the market for corporate control, real options, risk management, international capital budgeting and financing, financial planning and working capital management, project financing, reorganizations and advanced equity valuation. Course Material Required text material • (BMA) R. A. Brealey, S. C. Myers and F. Allen, Principles of Corporate Finance, 8th ed., McGraw- Hill/Irwin, Inc., 2006. •(RP) Reading Packet •(CP) Case Packet The required text (BMA) and the materials that make up the Case Packet (CP) are available at the GSU Book Store. The Reading Packet (RP) is available at ERes. Contents of (CP) and (RP) (with ERes access instructions)...

Words: 2563 - Pages: 11

Premium Essay

The Boston Beer Company, Inc. and Subsidiaries

...2007 ASSETS Current Assets: Cash and cash equivalents $ Short-term investments Accounts receivable, net of allowance for doubtful accounts of $255 and $249 as of December 27, 2008 and December 29, 2007, respectively Inventories Prepaid expenses and other assets Deferred income taxes Total current assets Property, plant and equipment, net Other assets Goodwill Total assets $ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable Accrued expenses Total current liabilities Deferred income taxes Other liabilities Total liabilities Commitments and contingencies Stockholders' Equity: Class A Common Stock, $.01 par value; 22,700,000 shares authorized; 10,068,486 and 10,095,573 shares issued and outstanding as of December 27, 2008 and December 29, 2007, respectively Class B Common Stock, $.01 par value; 4,200,000 shares authorized; 4,107,355 shares issued and outstanding Additional paid-in capital Accumulated other comprehensive loss, net of tax Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 9,074 $ — 18,057 22,708 16,281 2,734 68,854 147,920 1,606 1,377 219,757 $ 79,289 16,200 17,972 18,090 4,252 2,090 137,893 46,198 12,487 1,377 197,955 $ 20,203 $ 46,854 67,057 9,617 3,055 79,729 17,708 42,449 60,157 1,215 2,995 64,367 101 41 102,653 (431) 37,664 140,028 219,757 $ 101 41 88,754 (204) 44,896 133,588 197,955 $ The accompanying notes are an integral part of these consolidated financial statements. 37 ...

Words: 1572 - Pages: 7

Premium Essay

Schedule 6

...GUIDANCE NOTE ON THE REVISED SCHEDULE VI TO THE COMPANIES ACT, 1956 The Institute of Chartered Accountants of India (Set up by an Act of Parliament) New Delhi © THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form, or by any means, electronic mechanical, photocopying, recording, or otherwise, without prior permission, in writing, from the publisher. Edition Committee/Department Email Website Price ISBN Published by : : : : : : : December, 2011 Corporate Laws & Corporate Governance clcgc@icai.org www.icai.org ` 200/978-81-8441-499-8 The Publication Department on behalf of the Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi - 110 002. Sahitya Bhawan Publications, Hospital Road, Agra 282 003 December/2011/5,000 Copies Printed by : Foreword The Ministry of Corporate Affairs of the Government of India has been taking many initiatives for overhauling the Companies Act, 1956 through major amendments, circulars and notifications. To make Indian business and companies competitive and globally recognisable, a need was felt that format of Financial Statements of Indian corporates should be comparable with international format. Since most of the Indian Accounting Standards are being made at par with the international Accounting Standards, the changes to format of Financial Statements to align with...

Words: 52030 - Pages: 209

Premium Essay

Balance Sheet

...Statement of Profit and Loss and notes thereto in accordance with the manner prescribed in Schedule VI to the Companies Act, 1956. To harmonise the disclosure requirements with the Accounting Standards and to converge with the new reforms, the Ministry of Corporate Affairs vide Notification No. S.O. 447(E), dated 28th February 2011 replaced the existing Schedule VI of the Companies Act, 1956 with the revised one. Government vide Notification No. F.N. 2/6/2008 – C.L-V dated 30th March 2011 made the revised Schedule VI applicable to all companies for the financial year commencing from 01st April 2011. The requirements of the Revised Schedule VI however, do not apply to companies as referred to in the proviso to Section 211 (1) and Section 211 (2) of the Act, i.e., any insurance or banking company, or any company engaged in the generation or supply of electricity or to any other class of company for which a form of Balance Sheet and Profit and Loss account has been specified in or under any other Act governing such class of company. Key Features of Revised Schedule VI –Balance Sheet • The revised schedule contains General Instructions, Part I – Form of Balance Sheet; General Instructions for Preparation of Balance Sheet, Part II – Form of Statement of Profit and Loss; General Instructions for Preparation of Statement of Profit and Loss. • The Revised Schedule VI has eliminated the concept of ‘schedule’ and such information is now to be furnished in the notes to accounts. • The revised...

Words: 6818 - Pages: 28

Free Essay

Cb-Annual Report 2011

...2011 Annual Report at every occasion chaiRman’S letteR In an era of constant, rapid and unpredictable change, the concept of staying the course, especially in business, can seem like an impossible mission. It takes strong and confident leadership, a clear and focused strategy and a team of talented people who are willing to go the distance in order to achieve the goal. Since fiscal 2010, the goal at Constellation Brands has been a singular one: profitable organic growth. During this period, we have embarked on an evolutionary journey that has taken us from a collection of stellar brands and acquired businesses to a highly disciplined and tightly aligned company that is, at every occasion, capitalizing on company-wide efficiencies and best practices to strengthen our operations, our people and our brands. Our fiscal 2011 results serve as a shining indicator that our collective efforts are paying off. More importantly, they validate the importance of staying true to one’s commitments. At Constellation Brands, our commitments are unwavering…to continue to grow our business and our premium brands, to enrich the communities where we live and work and to elevate life with every glass raised. These commitments are being realized every day because of our people, who are among the best and brightest in the industry. Dedicated, innovative and determined, our employees have stayed the course through unexpected challenges and increasingly higher expectations placed on them. We are...

Words: 59029 - Pages: 237

Premium Essay

Blank

...Overview of the Course The course is an introduction to the concepts, principles and analytical methods involved in making the broad variety of key investment decisions regarding commercial real estate. It is designed to supplement, rather than replace SURP 844: Real Estate Project Planning. Therefore, the emphasis of this course is on commercial real estate investment rather than development. However, some elements of the latter will inevitably be addressed. The focus will be on fullyoperational income-generating properties, primarily large in scale. The main asset types of office, industrial, retail and multi-unit residential will be discussed (and possibly a few more specialized types). Another emphasis of the course will be on the micro level – the evaluation of the investment merits of individual properties (or at least individual transactions). Less attention will be paid to the macro level i.e. portfolio management. To the extent possible, the course content (including readings, cases and assignments) will be Canadian (although it is recognized that real estate investment is increasingly a global endeavor). This is primarily a combination seminar and case study course. It is designed around a cornerstone of five carefully chosen guest speakers, who will each address their specific area of expertise within commercial real estate investment. Course readings, case studies, exercises and assignments complement the guest lectures. With its “hands-on” practical orientation, this course...

Words: 2545 - Pages: 11

Premium Essay

Case

...a decision- orientation; and (3) the first-year program provides the basic training on which students can build in the second-year. Consistent with the first-year program, FMP aims to provide: 1. An Introduction. The course provides the basic framework necessary to pursue further study in finance in the second-year of the MBA program and on his or her own thereafter. This framework is an orientation towards valuation. 2. Basic Mastery. The course emphasizes essentials, the tools and concepts that every general manager, entrepreneur, or manager in other functional fields should know. 3. A Corporate Perspective. Because we seek to understand the problems of general managers, this is a corporate finance course, rather than a course in investments, banking, or personal finance. While elements of these related subjects must be brought to bear, our ultimate focus is corporate policy and tactics. 4. An Underpinning for Addressing Broad and Challenging...

Words: 4860 - Pages: 20

Premium Essay

Le Chateau

...ANNUAL REPORT 2009 CORPORATE PROFILE Le Château is a leading Canadian specialty retailer offering contemporary fashion apparel, accessories and JANUARY 30, 2010 JANUARY 31, 2009 STORES SQUARE FOOTAGE 352,214 319,762 117,321 128,768 35,575 28,083 16,200 19,332 9,203 3,480 1,029,938 17,591 STORES AND SQUARE FOOTAGE STORES SQUARE FOOTAGE 371,240 360,017 139,605 133,025 38,148 28,083 20,157 19,332 15,314 3,480 1,128,401 17,591 ONTARIO QUEBEC ALBERTA BRITISH COLUMBIA MANITOBA NOVA SCOTIA SASKATCHEWAN NEW BRUNSWICK NEWFOUNDLAND P.E.I. TOTAL CANADA TOTAL UNITED STATES 75 68 27 27 8 7 5 5 3 1 226 4 73 65 26 27 7 7 4 5 2 1 217 4 footwear to style-conscious women and men. Our brand's success is built on quick identification of and response to fashion trends through our design, product development and vertically integrated operations. Le Château brand name merchandise is sold exclusively through our 230 TOTAL LE CHÂTEAU STORES 230 1,145,992 221 1,047,529 stores. All stores are in Canada, except for four locations in the New York City area. In addition, the Company has 9 stores under license in the Middle East. SALES (in ‘000) 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 150,000 100,000 200,000 SHAREHOLDERS’ EQUITY (in ‘000) 07 08 09 50,000 0 07 08 09 Le Château, committed to research, design and product development, manufactures approximately 40% of the Company's apparel in its own Canadian production facilities. NET EARNINGS...

Words: 16361 - Pages: 66

Premium Essay

Apollo Case to Do List

...Checklist | | | | | | | | | Section | | Page | To Do – Yes/No | WP Reference | Blackboard Template Available – Yes/No | Description of To Do | | Other Notes | Planning | | 6 | Yes | GA-1 | No | 2. Draft Engagement Letter using the sample letter from the previous auditors in Blackboard. You will need to type this in word from scratch. You will need to make appropriate changes as needed and as discussed in class. | | | Planning | | 6 | Yes | GA-2 | No | 3.Draft short staffing requirements memo | | | Planning | | 37 | Yes | Varies | Yes | Note you do not need to search for audit programs – Refer to Blackboard for Audit Program Templates that are included with each audit area. You will need to reference and sign off each audit step as required (note that all audit steps provided in the audit program may not be needed.) | | | Planning | | 38 | Yes | GA-3 | Yes | Draft workpaper for the notes and information obtained from the 2011/2012 minutes (as discussed in class) | | | Planning | | 42 | Yes | A-1, A-2 etc | Yes | Trial Balance numbers for 2011 and 2010 9pages 43-44 are already input into the excel worksheets to use as a trial balance template | | | Planning | | 45 | Yes | A-1,A-2 etc | Yes | Use excel trial balance worksheets to calculate analytics as we demonstrated in class. You must complete items 1a and b. Financial Statement and changes and financial ratios Also, we completed item 2 - using items {a}–{j} but not in memo form –...

Words: 1377 - Pages: 6

Premium Essay

Blaine Kitchenware

...all homeworks and cases for session DC C1, and grade hw #4, 5, 6,7 for session 0502) Help Sessions: Mondays: 7:30-8:30pm @VMH, Room: VMH 1505 Mondays: 5:00-6:00pm @DC, Room: C2 Course Description This course covers modern theories and techniques for investments and asset pricing. The main topics covered are: portfolio theory, pricing models, market efficiency, fixed income investment, forwards and futures, and options. Canvas: Course materials such as lecture notes, required homework assignments, worked solutions to problems, and other useful information will be available on the course web page at Canvas: https://myelms.umd.edu/ Course Materials The following textbook is required and will be used throughout the course: Investments, by Zvi Bodie, Alex Kane and Alan J. Marcus, 9th Edition, published by McGraw Hill. Henceforth this book will be referred to as BKM. We will cover three cases in this course. Case #1 Markov's Trilemma (No. UVA-F-1341) http://store.darden.virginia.edu/markovs-trilemma Case #2 Dimensional Fund Advisors, 2002, HBS (No. 203-026) http://hbr.org/product/dimensional-fund-advisers-2002/an/203026-PDF-ENG Case #3 Ito’s Dilemma (No. UV2481) http://hbr.org/product/ito-s-dilemma/an/UV2481-PDF-ENG I will post class slides and handouts during the course on Canvas. Course...

Words: 1275 - Pages: 6

Premium Essay

The Thing

...strongly recommend that you take it early on Wednesday or Thursday. In the past, students have encoutered numerous problems if they wait till the last minute such as technology failure, personal or family problems. You will answer a total of 5 questions (2 Problems and 3 short essay Questions). The problems will be focussing on Triangular Arbitrage, and Derivatives. The essay questions will be identical to the ones in the review sheet. More on this in the Adobe session scheduled for Thursday Feb 2, 2012. FINANCE 6644: Global Financial Strategy Krishnan Dandapani January 2012 Final Exam Review Questions Instructions A. Please be concise and precise in your answers. B. Practice answers for closed book, class room setting. C. Suggested length: minimum one page; maximum two pages per question. D. You would answer 5 questions or Problems in two hours in final exam. Questions 1. Ethical Standards a. Can a multinational firm adopt varying ethical standards [such as with regard to product safety (Pinto), employee benefits (Nike) and “kickbacks” to win business (HP)] in its global operations? Why or Why Not? Discuss in depth based on the goals of multinational corporations? (Be sure to identify the merits and demerits/pitfalls for both options). b. How do corporate governance and financial management differ for US based corporations and global multinational corporations...

Words: 2200 - Pages: 9

Premium Essay

Business

...Analysis and Valuation FBE 529 Monday, Wednesday Class Instructor: Lloyd Levitin Time and Place: 3:30 – 4:50 P.M.; JKP 212 Office: Accounting 301E Office Hours: M, W: 2:15-3:15 P.M.; T: 5-6 P.M., and by appointment Office Phone (USC): 213-740-6524 Office Phone (Home): 310-858-0260 Email Address: levitin@marshall.usc.edu (preferred method of communication; please indicate on your email communication the class you are in and when it meets). Teaching Assistant: Brian Kaemingk (email: brian.e.k@gmail.com Course Website: On Blackboard http://blackboard.usc.edu COURSE OBJECTIVE Understanding what determines the value of a firm and how to estimate that value is a prerequisite for making rational business decisions. Entire industries (investment banking, securities analysis, and consulting) have grown prosperous providing valuation skills to investors and managers. The objective of this course is to give a general grounding in the valuation approaches used by successful practitioners. We cover discounted cash flow models, market multiple models, as well as specialized models used for M&A transactions and LBOs. We focus on valuation of businesses at the divisional and corporate levels. The course emphasizes practical and “real world” applications of valuation methodologies. The course is of interest to those contemplating careers in investment banking, security analysis, consulting, private...

Words: 2591 - Pages: 11