BE371 Principles of Finance Coursework
BE371 Principles of Finance Coursework
Part A (50%)
Answer the following question
How do you expect the recent shift of the Bank of England to tighter monetary policy to affect the level of investment and the stock market valuation of UK listed firms?
Part B (50%)
Access on Moodle the dataset containing the annual income statement of Microsoft and that of another US company, based on your student number (see List of stocks at the end of this document). The income statements cover the period 2018-2021. Complete the following tasks:
Calculate the Gross Margin (%) and the Net Margin (%) of Microsoft and the other company for 2018-2021. Plot and/or tabulate them, and comment on the patterns of profitability: between the two measures, over time and across the two companies. (10%)
Calculate the annual growth rate (%) in the earnings per share (EPS) of Microsoft and the other company for 2019-2021. Plot and/or tabulate them, and comment on the patterns of EPS growth over time and across the two companies. (5%)
Obtain the Price/Earnings ratio of Microsoft and the other company for 2018-2021 from morningstar.com. Plot and/or tabulate them, and comment on the patterns of valuation: over time and across the two companies. (10%)
Which of the two stocks (Microsoft or the other company) would you advise to buy, and why? (25%)
Submission instructions
Assignments should be submitted electronically to FASER by 10.00am on Friday 16 December 2022. For details on electronic submission, see: http://faser.essex.ac.uk/
Attention!!!
A word limit of 2,000 words applies.
Your answer should be concise and to the point. It does not need to have an introduction. You should think of it as a memo, rather than a standard essay, consisting in a series of bullet points with a brief but to the point explanation for each bullet point. You are advised to use using Times New Roman Font 12 and double line spacing.
In presenting your arguments when referring to other authors work, you must give appropriate references. Bibliographic details of such references should be given in a final section. This bibliography should only include the references indicated in the main text.
References in the text should be in brackets and indicate only the authors surname and the year of publication, as follows: (Aghion and Howitt, 1992). Bibliographic details should be given in the following format:
Fry, M. (1995) Money, Interest and Banking in Economic Development (Baltimore: Johns Hopkins University Press) (if it is a book)
Aghion, P. and Howitt, P. (1992) A model of growth through creative destruction, Econometrica 60: 323-351 (if it is a journal article)
Good luck!
List of Stocks
Student Dataset Company name Morningstar mnemonic
Microsoft MSFT
ia22113 1 Apple AAPL
aa22895 2 Alphabet GOOG
ma22609 3 Amazon AMZN
ta22862 4 Tesla TSLA
fb19971 5 Johnson & Johnson JNJ
je22467 6 Exxon Mobil XOM
mh22116 7 Walmart WMT
nk22720 8 Nvidia NVDA
nk19679 9 Chevron CVX
mm21741 10 Procter & Gamble PG
am22839 11 Home Depot HD
qm22345 12 Pfizer PFE
sn22824 13 Merck MRK
un22649 14 Coca-Cola KO
no22620 15 Meta META
oo22370 16 PepsiCo PEP
ps22067 17 Costco COST
vs22343 18 McDonald's MCD
ss22441 19 Oracle ORCL
ns22592 20 Broadcom AVGO
ru22200 21 Thermo Fisher Scientific TMO
iw22301 22 T-Mobile US TMUS
lx22821 23 Cisco CSCO
ry22591 24 Danaher DHR
ac22656 25 Abbott Laboratories ABT
ab22871 26 Bristol-Myers Squibb BMY
ps22726 27 Walt Disney DIS
https://www.morningstar.com/To search for particular stock, enter mnemonic from Table above at the Search Quotes and Site box below
