Combine all the research and data you have completed for the Course Project assignments from Weeks 1–4. Do not just copy and paste previous assignments. Rather, analyze and present your findings in a comprehensive final report.

Tasks:

• Summarize the course project to this point including key topics from Weeks 1 through 4. 

Then, using different sites and organizations than in Week 3:

• Analyze three online trading sites, and determine the requirements for trading, including the price per trade.
• Evaluate the amortization schedule you completed.  What role does the amortization schedule play in your organization?
• Evaluate three companies (look for investor information) that offer DIPs or DRIPs. Why is the relevant?
• Evaluate US Treasuries, Municipal Bonds, and Corporate Bonds.  Why is this relevant to an organization? 

Submission Details:

• Submit a 5-6 page Microsoft Word document, using APA style.
• Name your file: SU_FIN2030_W5_CP_LastName_FirstInitial.doc
• Submit your assignment to the Submissions Area by the due date assigned.

Running head: TRADED COMPANY 1

TRADED COMPANY2

Name

Course

Institution Affiliation

Publicly Traded Companies

Publicly traded companies refer to organizations that have their listed share on any stock exchanges thus allowing the common public to trade their share. In these cases, individuals can purchase and sell these companies’ shares in the open market. The process through which the company makes its share public is referred to as initial public offering where the country securities and exchange regulators approve the process. This discussion will be based on Apple Inc. where I will analyze the company operation and the market it operates, evaluate EVA and frees cash flow of the organization and also analyze the ROA and ROE.

Apple Inc. is a multinational organization in the technology industry with its headquarters in Cupertino California. It was founded in April 1976 by Steve Jobs, Ronald Wayne, and Steve Wozniak where their first product was Wozniak’s Apple 1 personal computer. The company has grown tremendously to become one of the most popular and international companies and a leader in innovative technology. As of today, the organization specializes in designing, manufacturing, and sales of smartphones, tablets, personal computers, wearables and accessories, and also other technology-related services. It operates in geographical segments which include the Americas, Great China, Europe, Japan, and Asia. In terms of its products and services, it comprises iPhone, AirPods, Mac, iPad, Apple Watch, Apple TV, Apple Care, Beats products, iCloud, streaming, digital content stores, and licensing services. The organization operations involve empowering workers, enforcing labor and human rights, accountability, and also a clean environment. Being one of the top technology industries, the management has maintained the organization has high work standards with a certain code of conduct which has enabled them to maintain competitive advantages. The organization also incorporates diversity and focuses on job training to ensure employees stay informed and productive as the technology field is very competitive.

Apple Inc. EVA, and free cash flow

Economic Value Added (EVA), can be referred to as the organization’s measure of its financial performance based on residual wealth determined through deducting the cost of capital form the operating profit, regulated for taxes on a cash basis. Because it tries to capture the organization’s true economic profit, it thus also referred to as the economic profit (Chen, 2020).

Apple Inc EVA can be calculated as follows for the year that ended on September 28, 2019

To get the answers in the table, EVA is calculated as the following

EVA = NOPAT- Capital cost x Capital invested = 53, 325-13.67% x 45,225 = 45,913 as per September 2019. These results indicate that EVA for the organization had increaser from the year 2018 to 2019 as compared to the previous result where it had decreased from the year 2017 to 2018.

The free cash flow (FCF), can be referred to as the measure of cash flow inside an organization that it can use freely. It indicates how an organization spent or raised cash during one fiscal year. It mainly consists of business cash flow, financial cash flow, and investment cash flow. FCF the organization’s competitiveness and is calculated by subtracting Investment Cash Flow from Business Cash Flow

Apple Inc. FCF

Data indicates that the organization FCF increased from 2017 to 2018 and also decreased from 2018 to 2019(Dybek, 2019).

ROA and ROE

For Apple Inc. ROA can be referred to as the profitability ratio determined form net income divisible by total assets while ROE is referred to as profitability ration determined by net income divisible by the equity of the shareholder’s. These profitability ratios are mainly determined by Gross profit margin, operating profit margin, and net profit margin.

Data shows there was an improvement of ROA for the company from 2017 to 2018 and 2019. Also the same case with ROE where the company improved from 2017 to 2018 and from 2018 to 2019(Dybek, 2019).

The main difference between these two “ROA and ROE” measure is the way debts of an organization is taken into account. The organization’s total assets will be equal to shareholders’ equity and thus ROA and ROE would be equal. In case the organization adapts financial leverage ROA would fall below ROE. In essence, an organization increases assets but taking debts since it means there is cash that has been brought in. More so, the company decreases its equity by increasing debt since shareholders’ equity is calculated by minus of total debt form assets.

Reference

Chen, J. (2020). Economic Value Added (EVA). Retrieved August 13, 2020, from https://www.investopedia.com/terms/e/eva.asp

Dybek, M. (2019). Apple Inc. (NASDAQ:AAPL): EV/FCFF. Retrieved August 13, 2020, from https://www.stock-analysis-on.net/NASDAQ/Company/Apple-Inc/Valuation/EV-to-FCFF

Dybek, M. (2019, November 01). Apple Inc. (NASDAQ:AAPL): Analysis of Profitability Ratios. Retrieved August 13, 2020, from https://www.stock-analysis-on.net/NASDAQ/Company/Apple-Inc/Ratios/Profitability

Running head: FINANCIAL MANAGEMENT WEEK 1

FINANCIAL MANAGEMENT WEEK 3

Financial Management Week 2

Student’s Name

Institutional Affiliation

Date

Annual income = $36,000

Monthly Income = $3,000.

1. Present Value of the Payments

The composition of income can be defined as the association between two or more buyers to acquire a good of a higher value. Its operation is straightforward: when determining the maximum amount of the installments (which should not exceed the margin of 30% of monthly income), the financial institution adds the earnings of all participants. If the individual has a salary of $ 3,000.00, the owner can commit a maximum of $840.00 per month. Now, adding the individual’s income, this is also $ 3,000.00 (Sinnott, 2016). The margin jumps to $1,800.00, allowing the financing of the higher value property.

Average annual auto finance premium = $3,000 = 10%

= $300.00

Average annual house loan premium = $3,000 = 28%

= $840 USD

2.

The maximum car loan they will afford at an interest rate of 7 percent for 60 months is estimated in Excel and the screenshot below. The applicant’s age is a factor that directly impacts the viability of the income composition and must be rigorously assessed before the participants are defined (Zahran & Ezeldin, 2020). To define the maximum term of the financing, the age of the applicant will be taken into account, since there is a maximum age for someone to have active real estate financing in the country. Since the smaller the number of installments, the higher the value of each installment. The presence of an applicant of older age can cancel the benefits of the income composition, even preventing the release of credit in the desired amount (Zahran & Ezeldin, 2020). The auto loan amortization schedule is calculated in Excel and the screenshot provided below:

The auto loan interest that they will take is $15,150.60.

Payment down = 3 per cent

Car worth they may afford = $15,150.60/(1-3 per cent)

= for $15,619.18.

Car worth they may afford is $15,619.18.

The maximum home loan they can afford is calculated in Excel at a 5 percent interest rate for 30 years or 360 months, and the screenshot below:

The Home Loan Value they can take is $156,476.56.

Payment down = 10 per cent

Home value they are able to afford = $156,476.56/ (1-10%)

= $173,862.84

A vehicle that they can buy is worth $173,862.84

3. Original Principal

Some aspects must be considered in the composition of income for financing and deserve special care. First of all, it is worth remembering that the applicant becomes the owner of the property, and, of course, there must be a harmony of interests and well-defined rules to avoid future unpleasantness. It is also worth noting that if one of the participants becomes in default, the property may be subject to seizure (Leece, 2017). It is equally important to remember that each applicant will have the percentage of their income used in the composition committed to the purchase of a new property through financing.

Monthly revenue is $3,000

Let’s say that the interest rate on home and auto loans is 10 percent

So your down payment is 3% on housing, 10% on car fine lets you return to this later

Housing loans constitute 28% of your monthly profit = 3000 X 28/100 = 840

Car loan 10 percent a month is 3000 X 10/100 = 300

And the net profit balance of 840 + 3000= 1140 is $18600 (Sinnott, 2016).

4. Original Value Formula

An item that deserves extra attention is the compromise of income, especially when only one person becomes responsible for the payment of benefits, which is very common. If this is your case, be sure of your financial capacity to assume the installments, since a miscalculation can lead to default, culminating in the loss of the property (Leece, 2017).

300 X 48 (4 years) = $14400 plus 10 percent 4-year interest

Complete interest 10 percent = 1440 for 4 years = interest 360/12 per year = interest 30 $a month

So the car’s main amount is 12960

Monthly calculation

12960/48 = 270 principal

1440/48 = 30 shares

Average EMI = $300

So the bill for the vehicle down is $1296 10 percent of the amount

The vehicle price will then be $14400 (1296 + 12960) if the interest rate is 10 percent (Zahran & Ezeldin, 2020).

5. Housing Price

Taking all the necessary precautions, it is possible to count on an extra resource to acquire it. The credit analysis is done individually; that is, the applicant can have pending registration (Leece, 2017). Each participant can use the resources of his FGTS linked accounts to compose the entry, settle installments or amortize the outstanding balance, according to the fund’s own rules of use.

840 X 180 = 151200, plus interest rate of 10 per cent for 15 years

15120 Gross 15-year reward, 15120/15 = 1008/12 = $84 a month

Therefore, the principal amount is 136080$/180 (15 years) = 756 per month

Its emi = 840

Maximum down payment is 4082.40

Complete housing is 140162.4 with value of 10 per cent (Zahran & Ezeldin, 2020).

References

Leece, D. (2017). Mortgage design in the 2000s: theoretical and empirical issues. Journal of Property Finance, 2-13.

Sinnott, W. B. (2016). Scheduling Major Capital Expenditures to Minimize Costs. Journal‐American Water Works Association, 67(5), 7-24.

Zahran, K., & Ezeldin, A. S. (2020). Finance-based scheduling: optimization of results-based funded multiple projects. Canadian Journal of Civil Engineering, 47(4), 8-37.