Financial Market Shareholder Analysis
A company’s financial reports are used for various reasons, including determining how the company is doing in the financial market. You decide to evaluate the effects of economic and market conditions on the Fortune 500 company selected in week one. Completing this exercise provides you with financial market research to present to your management team to inspire new KPIs and policies.
Assessment Deliverable
Use the previous year’s financial reports research you completed in Week 3.
Write a shareholder analysis in which you address the following:
Evaluate economic conditions that influence company performance. Consider political, environmental, currency (money), global economics, and government influences on economic conditions.
Compare market conditions from the previous year with the company’s performance for that same year. Conclude how the market conditions that year influenced the company’s performance, such as interest rates, Federal Reserve Bank monetary policy changes, or other market conditions relevant to the company you selected.
Analyze year-over-year performance from the past three years (2020, 2021, & 2022). Provide the 2020, 2021, and 2022 trailing PE ratio, forward PE ratio, price to book, return on assets, and return on equity
Sample Answer
Shareholder Analysis for [Company Name]
Evaluation of Economic Conditions
Economic conditions play a significant role in influencing company performance. Political factors, such as government policies, tax rates, and trade regulations, can impact a company’s operating costs, profitability, and market access. Environmental factors, such as climate change regulations and resource scarcity, can increase costs and limit production capacity. Currency fluctuations affect export competitiveness and the value of overseas assets. Global economic trends, such as recessions and economic growth, influence consumer spending, market demand, and overall business sentiment. Government influences, such as fiscal and monetary policies, can impact interest rates, inflation, and the availability of credit, all of which affect a company’s financial health.