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fictitious stock recommendation.

fictitious stock recommendation.

You are an investor advisor for a client, with $100,000 to invest in the stock of three publicly traded companies. Your client—who has just enough accounting knowledge to be dangerous—has asked you to justify your advice based on the financial statements of the companies you recommend.
Your challenge is to determine what specific information from each financial statement could help them make their stock choice.
You can find the financial statements for each company at Yahoo! Finance. Enter the company name (or ticker symbol) that you chose from the list below. On the bottom left-hand column on the site, you will see a section called “Financials.” There you will find a Balance Sheet, Income Statement, and Statement of Cash Flows.
After consideration of the companies below, please choose your three stock picks from this list:
Microsoft
eBay
Apple
Intel
Google
Cisco
General Motors
McDonalds
WalMart
Yahoo!
Read a little about the company and evaluate the stock performance over the past five years of the three stocks you chose. Under “Quotes” in the sidebar of Yahoo! Finance, choose “Historical Prices” and set your date range.
In your research, please include the following for the three stocks you will recommend to your client:
the name of each company
the type of company (goods, services, etc.)
a brief summary of earnings, cash reserves, level of debt, etc. from your examination of the big three financial statements
a brief summary of the high and low stock prices over the past one, two, three, four, and five years
the S&P 500 Index high and low prices for the past one, two, three, four, and five years (use CNN Money—under the SPX 5-minute chart, click “time frame” and choose “1 year,” “2 years,” etc.)
any other specific information you find in financial statements to justify your recommendation such as a relationship of earnings performance vs. timing of earnings reports.
Type your report in letter form to your fictitious client, beginning with “Dear _______.” Summarize your findings in your letter and back up your recommendations. It is recommended you add a table in your letter to help efficiently convey your data. Your letter should be typed in Times New Roman 12 pt. font with 1″ margins and double-spaced in Microsoft Word. Name your document lastnamefirstinitial_ex4.doc.

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