Question Description
I chose NETFLIX for this project ( if u wanna choose another company let me know but there is so much information to find on netflix) you have to analyze it financially and talk about the following:
This project is where you would have touse your understanding of financial concepts to analyze a real company.It should be organized like a professional report. Report should beapproximately 10 pages double-spaced using 12pt sized font, includingtables and references.
As a general guideline in doing the above analysis you should focus on the following aspects:
- Financial Statement Analysis:
Find the financial statements of your selected company and analyze its financial ratios. - Valuation:
Cash Flows, growth pattern, any special project that company is heavily dependent upon. - Risk and Return:
What is the risk profile of yourcompany? (How much overall risk is there in this firm? Where is thisrisk coming from (market, firm, industry or currency)? How is the riskprofile changing? What is the performance profile of an investment inthis company? What return would you have earned investing in thiscompany’s stock? Would you have under or out-performed the market? Howmuch of the performance can be attributed to management? How risky isthis company’s equity? Why? What is its cost of equity? How risky isthis company’s debt? What is its cost of debt? What is this company’scurrent cost of capital? - Changes in stock prices and returns:
Recordopening, closing, high and low prices on a daily basis. Analyze anymajor swings in prices whether they are driven by any company specificevent or are market driven. For example, most companies might fallbecause of a major issue (think of Greek crisis) or a company might fallbecause it was caught offering a bad product (e.g. Lumber Liquidators)
As a general guideline in doing the above analysis you should focus on the following aspects:
- Financial Statement Analysis: Find the financial statements of your selected company and analyze its financial ratios.
- Valuation: Cash Flows, growth pattern, any special project that company is heavily dependent upon.
- Risk and Return: What is the risk profile of your company? (How muchoverall risk is there in this firm? Where is this risk coming from(market, firm, industry or currency)? How is the risk profile changing?What is the performance profile of an investment in this company? Whatreturn would you have earned investing in this company’s stock? Wouldyou have under or out-performed the market? How much of the performancecan be attributed to management? How risky is this company’s equity?Why? What is its cost of equity? How risky is this company’s debt? Whatis its cost of debt? What is this company’s current cost of capital?
- Changes in stock prices and returns: Record opening, closing, highand low prices on a daily basis. Analyze any major swings in priceswhether they are driven by any company specific event or are marketdriven. For example, most companies might fall because of a major issue(think of Greek crisis) or a company might fall because it was caughtoffering a bad product (e.g. Lumber Liquidators