Pick a company publicly listed on the NYSE or NASDAQ.
The company should have at least five (5) years of trading history.
Content (Corporate Finance Key Stome)
Company description.
Key data: current market price of the company’s share of stock, market capitalization, shares outstanding, Beta, P/E ratio, EPS, dividend yield, price-to-book ratio, current ratio, net margin, ROA, ROE, total debt to total equity, net income, total assets, total liabilities, shareholders’ equity, FCF, FCF yield.
Performance (stock price): 5Y, 3Y, 1Y, YTD, 6M, 3M, 1M, 5D, 1D. Is the company underperforming or outperforming the industry? Explain
Analysis of the company: risk profile (firm-specific risk, market-related risk, and industry risk).
Capital structure of the company: explain the financial securities used to raise funds from the financial markets.
Payout policy: has this company paid cash dividends, stock dividends, or bought back its shares of stock? Explain.
Investment projects: what is the typical project for this firm?
Explain the company's Corporate Social Responsibility (CSR) policy.
answer those questions
Full Answer Section
Market-related risks:
- Interest rate risk: Rising interest rates could make it more expensive for Microsoft to borrow money.
- Economic recession: A recession could lead to a decrease in demand for Microsoft's products and services.
Industry risk:
- Technological disruption: New technologies could disrupt the software and computer hardware industries.
- Cybersecurity threats: The company is at risk of cyberattacks, which could disrupt its operations and damage its reputation.
Capital Structure:
Microsoft primarily uses debt and equity to raise funds from the financial markets. The company has a debt-to-equity ratio of 0.77, which is considered to be a healthy level.
Payout Policy:
Microsoft has a history of paying cash dividends and repurchasing shares. In 2023, the company paid out $16.7 billion in dividends and repurchased $8.8 billion of its shares.
Investment Projects:
Microsoft typically invests in projects that are related to its core businesses, such as cloud computing, artificial intelligence, and cybersecurity. The company also invests in venture capital and private equity funds.
Corporate Social Responsibility (CSR) Policy:
Microsoft's CSR policy is focused on four key areas: environmental sustainability, community engagement, digital inclusion, and ethical AI. The company has set ambitious goals in each of these areas, such as becoming carbon negative by 2030 and providing access to broadband internet for 250 million people by 2025.
Conclusion:
Microsoft is a leading technology company with a strong track record of growth and profitability. The company has a solid financial position and a well-defined CSR policy. However, Microsoft faces several risks, including competition, regulation, and technology disruption. Investors should carefully consider these risks before investing in Microsoft.
Sample Answer
Company Description:
Microsoft Corporation (MSFT) is an American multinational technology company headquartered in Redmond, Washington. It develops, manufactures, licenses, supports, and sells computer software, consumer electronics, personal computers, and related services.