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NCU Financial Ratio Analysis and Models of Valuation Essay

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For this assignment, you will present examples of investment analysis.   The examples should emerge from one common company of your choosing to give the discussion a better flow.

Some important techniques for this assessment include basic financial ratio analysis and models of valuation. The more advanced analysis will make use of discounted cash flow models for developing estimates of intrinsic values.

Evaluate the following:

  1. The financial ratios a credit rating agency such as Moody’s or Standard & Poor’s be most interested in, and which ratios would be of most interest to a stock market analyst deciding whether to buy a stock for a diversified portfolio.
  2. The value of financial ratio analysis in the context of common stock investing. Provide a discussion of the decomposition of ROE including the deeper evaluation of this decomposition into the common-size income statement.
  3. The major difference in the approach of international financial reporting standards and U.S. GAAP accounting, and the advantages and disadvantages of each.