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Essay / Research Paper Abstract
This 22 page paper examines two companies using a range of tools to assess which may be the best investment. The paper starts with the use of ratio analysis and then moves onto different share pricing tools such as the book value, dividend discounting model and the capital asset pricing model. The paper ten argues there are many non financial influences and examines the way the companies compete looking at their competitive advantage strategies and using Porters Five Forces model. The bibliography cites 6 sources.
Page Count:
22 pages (~225 words per page)
File: TS14_TEBMWfiat.rtf
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Unformatted sample text from the term paper:
1. Introduction The decision to invest in any company will have many different considerations. An investor will want to get a good return. This means a great deal of
attention is going to be paid to the financial performance of the company and how it is performing within the industry in which it operates. However, future financial performance will
have numerous influences, some of which may be foreseen or projected by looking at the position of the company and the way the industry is moving, accessing the current
strategy and way in which they compete and how the macro or micro environment may effect them. If we consider two companies such as BMW and Fiat, both with
a chequered history, we can consider who we may compare them by looking at all these different aspects from financial to strategic and environmental. 2. Financial Results The most basic
measures at the financial measures, such as profit and the expected return. For this we can compare to two companies and look at how they are performing and which may
be the best investment. There are a number of profit measures. The gross margin is expressed as a percentage. This is the level of revenue that remains when all of
the direct costs for producing the goods or services are deducted form the revenue. This indicates the level at which direct costs account take up revenue. BMW Fiat
Gross profit 2004 2003 2004 2003 Revenue (a) 44,335 41,525 46,703 47,271 Cost of goods sold (b) 34,064 32,090 39,623 40,830 Gross profit (c) (a-b) 10,271 9,435 7,080 6,441 Gross
profit margin (%) (c/a x 100) 23.17% 22.72% 15.16% 13.63% Here BMW is slightly higher. However there are other costs. The operating profit margin is expressed as a percentage.
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