Risk & Return Analysis

Some of important components to be familiar with when deciding on investing in a company is its competitive advantages, valuation, dividend payouts and sustainability, and earnings consistency. Financial statements of Johnson & Johnson prove that their overall financial condition is good and is worthy of investing. For example, Johnson & Johnson has a market value of $211 billion and has over $67 billion in sales over the last 12 months. As of Dec. 31, 2012, Johnson & Johnson had $21.1 billion in cash and short-term investments, which can be easily converted into cash. Over the last 12 months, they paid out $6.61 billion in dividends, which works well with a free cash flow of $12.5 billion (Harry, 2015). Additionally, Johnson & Johnson has noticeably improved its profits over the last four years with a reported annual revenue of $74,331 million ending 2014. The current ratio of Johnson & Johnson is 1.90, which means the company can meet financial commitments short-term in the event of a disruption of its operations due to natural disaster etc. After reviewing the most recent balance sheet, it can be determined that the financial condition of Johnson & Johnson is a very good one and has prospects of growth over time. They have made several advantages towards growth in the coming years. For example, “in 2014 it had 20 new extensions approved and filed an additional 20. Also it started 23 Phase 3 trials and initiated eleven Phase 2 trials and currently is poised to yield ten potential new product filings between 2013 and 2017. With these developments, the company will be able to launch outstanding products in its pharmaceutical business in the days ahead” (GuruFocus,

The report focuses on the Economic Value Added of Nike Inc. The analysis is conducted through a detailed assessment of the financial statements including income statement, balance sheet, and cash flow. Such financial statements are then applied to derive common-size statements for income statement and balance. The trends and predictions obtained from the common-size statements predict the future economic value. Similarly, the Pro-forma financial statements derived provide vital future economic performances of Nike Inc. According to the regression analysis and the assessment of the common-size and Pro-forma financial statements; Nike Inc. has a growth in revenue and earnings per share. The EVA computed using WACC, Net Operating Profit after Taxes (NOPAT), and Invested Capital is positive (+$391.24); this shows that Nike Inc. is financially stable and will grow in the next three years.

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I certify that the attached paper is my original work. I am familiar with, and acknowledge my responsibilities which are part of, the University Of Phoenix Student Code Of Academic Integrity. I affirm that any section of the paper which has been submitted previously is attributed and cited as such, and that this paper has not been submitted by anyone else. I have identified the sources of all information whether quoted verbatim or paraphrased, all images, and all quotations with citations and reference listings. Along with citations and reference listings, I have used quotation marks to identify quotations of fewer than 40 words and have used block indentation for quotations of 40 or more words. Nothing in this

This means that JC Penney turns over their inventory 2.5 times during year. TJX turns over their inventory 5 times during the year, in fact TJX is the only competitor whose turn over inventory average is above the industry average. As stated in Fundamentals of Corporate Finance by Stephen A. Ross, the Beta indicates "the amount of systematic risk present in a particular risky asset relative to that in an average risky asset" (427). The Beta for JC Penney and TJX is above industry average- that means that these companies would have a greater expected return.

I certify that I am the author of this paper and that any assistance I received in its preparation is fully acknowledge and disclosed in the paper. I have also cited any sources from which I used data, ideas of words, whether quoted directly or paraphrased. I also certify that this paper was prepared by me specifically for this course.

The company I have chosen to do my research financial analysis paper on is Nike Inc. NIKE, Inc., based near Beaverton, Oregon, is the world's leading designer, marketer and distributor of authentic athletic footwear,

The regression that we performed in excel for both stocks yielded a beta of .73576 for Reynolds, and a beta of 1.4198 for Hasbro. In question 2 we learned that although Reynolds stock was riskier independently, adding it to the portfolio made it more diversified compared to adding Hasbro, due to the fact that it was less correlated to the market portfolio. Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole. Therefore, since the beta of Reynolds is lower than Hasbro, our beta calculations align with the fact that Reynolds stock makes the overall portfolio less risky. This finding is also intuitive when considering the nature of the companies; Reynolds is a Tobacco company meaning that is should be less sensitive to changes in market conditions than a toy company like Hasbro.

I, hereby certify that except where I have indicated, this is my own work, based on my personal study and/or research. I have acknowledged all materials and sources used in the preparation of this whether they be books, articles, reports, lecture notes, or

The purpose of this paper is to research, analyze and whether to recommend Merck & Co. to potential investors. I will be using both qualitative and quantitative analysis based on previous years of data for the company. I will provide efficient background information (life cycle analysis) including a brief history of Merck & Co., it’s stock chart since being added to the market, any advantages or disadvantages it has within its industry and important news that may affect a potential investor’s willingness to buy or sell this stock.

I certify that the attached paper is my original work. I am familiar with, and acknowledge my responsibilities which are part of, the University of Phoenix Student Code of Academic Integrity. I affirm that any section of the paper which has been submitted previously is attributed and cited as such, and that this paper has not been submitted by anyone else. I have identified the sources of all information whether quoted verbatim or paraphrased, all images, and all quotations with citations and reference listings. Along with citations and reference listings, I have used quotation marks to identify quotations of fewer than 40 words

The price of Nike’s common stock has gone down in the past five years. It was at its highest point in 1997 and next highest in 1999.

13. According to these three scatterplots, three-year data and three-month data both show the beta of holding Under Armour shares should be around 1.22~1.23. However,

Over the last 5 years, Nike’s beta has fluctuated between 0.63-0.98. To account for these fluctuations, the historical average beta (0.8) was chosen for use in the analysis. While the YTD beta might reflect Nike’s current business practice, the aim of the firm is to revive their company by gaining back market share and increasing revenues. For this reason it was felt that the use of an average beta would be more appropriate as it better reflects Nike’s historical business practices.

Randolph Corporation is a multidivisional company. Due to frictions among the divisions, Randolph’s stock has not performed according to expectations. In order to improve Randolph’s financial situation and position among its competitors, a number of questions need to be answered. We will discuss these questions separately below.