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ACTIVITY BRIEF FOR ASSESSMENT 1

INSTRUCTIONS

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Main task

Write a Financial Analysis Report between 1500 and 2000 words, in which you are invited to apply the data analysis, as provided during the course, to The Home Depot Company during years of your choice.

I. Risks and returns

Extract from financial sites available to the public such as NYSE, https://www.nyse.com/quote/XNYS:HD, Google Finance, Yahoo Finance, Bloomberg, historic data of The Home Depot company, thereafter The Company, over TWO years. Obtain for the same time the S&P500 Index. Calculate and present the average daily holding period returns and the standard deviation of these returns for the SP500 index and The Company.

Date S&P 500 The Company

…..…………..…………………….
…..…………..…………………….
…..…………..…………………….

a. Plot the holding period returns from the Company against the SP500 Index

b. From the graphs in part a) describe the nature of the correlation between the stock returns of The Company and the returns for the SP500 index.

c. Obtain from Standard and Poor or alternative source such as Yahoo

Finance, https://finance.yahoo.com/quote/HD/key-statistics/ the beta of The Company.

d. Assume that the Treasury bill rate is 2% and that the expected market return is 6%. In consideration of the betas for The Home Depot Company, estimate an appropriate rate of return, using CAPM.

II. Financial statement analysis

To complete this section, access the 10-K yearly report of The Home Depot Company, registered with the SEC for the year of your choice, from The Company’s site or directly from SEC filing

site, https://www.sec.gov/edgar/searchedgar/companysearch.html

II.a Review the Report of Independent Registered Public Accounting Firm. Write a concise summary of the important items from reading these items.

II.b Analyze the balance sheet of The Company provided by 10K form. Write a summary that includes important points that an analyst would use in assessing the financial condition of The Company.

II.c Using The Company’s income statement provided in the 10K form, analyze the profitability of The Company by calculating any ratios deemed necessary for the past three years. Ensure to calculate sales growth and operating expenses evolution for each two-year period presented.

II.d Identify strengths and weaknesses and provide your opinion about the investment potential and the creditworthiness of The Company.

FORMAT

Your submission must meet the following formatting requirements:

· Submit up to two files only.

· Required file format for main submission: PDF.

· Additional file format for optional additional deliverables: Excel spreadsheet (.xlsx).

· Additional file requirements: Excel format of data pertaining to section I. Other details:

· Font size 12

· Double-spaced

· Number of words: between 1500 and 2000.

All refencing and citations require Harvard referencing style.

LEARNING OUTCOMES

Provide the application of the financial function. Elucidate the role of finance in business

Examine and correlate events that effect the current business environment and share valuation. Classify risks inherent with business.

Help understanding the financial decision making using financial data.

Analyze financial statements from various external and internal stakeholders’ perspective.

ASSESSMENT CRITERIA

I.aPlot the holding period returns from the Company against the SP500 Index10 points
I.bDescribe the nature of the correlation between the stock returns and the returns of the market15 points
I.cObtain from Standard and Poor or alternative source such as YahooFinance, https://finance.yahoo.com/quote/HD/key-statistics/ the beta of The Company.10 points
I.dEstimate an appropriate rate of return, using CAPM.15 points
II.aReview the Report of Independent Registered Public Accounting Firm. Write a concise summary of the important items from reading these items5 points
II.bAnalyze the balance sheet of The Company provided by 10K form. Write asummary that includes important points that an analyst would use in assessing thefinancial condition of The Company.15 points
II.cUsing The Company’s income statement provided in the 10K form, analyze the profitability of The Company by calculating any ratios deemed necessary for the past three years. Ensure to calculate sales growth and operating expensesevolution.15 points
II.dIdentify strengths and weaknesses and provide your opinion about the investment potential and the creditworthiness of The Company.15 points

Rubric: discussion forums

CriteriaAccomplished (A)Proficient (B)Partially proficient (C)Borderline (D)Fail (F)Weight on grade
Content knowledgeDiscussion promotes sophisticated use of content. Posts demonstrate participants’ mastery of content knowledge. This is evidenced by extensive use of concepts and terminology across most or allposts/threads.Discussion promotes basic use of content. Posts demonstrate participants’ adequate understanding of content knowledge. This is evidenced by use of concepts and terminology across some posts/threads. Examples depictunderstanding ofDiscussion promotes uncertain or misguided use of concepts. Posts demonstrate participants have not fully grasped content knowledge. This is evidenced with only some use of concepts and terminology across posts/threads.Examples areDiscussion promotes use of content that lacks coherence. Posts demonstrate limited understanding of content knowledge. This is evidenced with little or no use of concepts and terminology across posts/threads.Examples areDiscussion does not promote basic use of content. Posts do not demonstrate participants’ adequate understanding of content knowledge. Examples do not depict understanding of concepts and are unclear andinaccurate.20%
Examples depict understanding of concepts and are clear and accurate. Posts engageconcepts critically.concepts and are clear and accurate.correct with some details.correct with few details
ConnectionPosts connect to the assignment/previous posts by addressing most or all its components and linking them to course material or topics learned.Posts draw insightful links between course content and professional practice, with a detailed explanation of participants’ own professional practice.Posts connect to the assignment/previous posts by addressing some of its components.Relevant course topics are mentioned with connections to course material or topics learned with some details/elaboration. Posts draw links between course content and participants’ own professional practice, with some elaboration stillneeded.Posts do not connect to the assignment/previous posts and address few components of the assignment/previous post. Relevant course topics are mentioned with very few connections to course material or topics learned, or with no details or elaboration. The participants rarely or never mention their own professional practice.Posts make only minimal reference to the assignment/previous posts and address hardly any components of the assignment/previous post. Relevant course topics are mentioned with very limited connections to course material or topics learned, or with minimal details or elaboration.Participants’ professional practice is not mentioned.Posts do not connect to the assignment/previous posts by not addressing of its components.Relevant course topics are not mentioned with connections to course material or topics learned with some details/elaboration. Posts do not draw links between course content and participants’ own professionalpractice, with no elaboration.20%
CollaborationDiscussion across the posts serves to build new ideas or stimulate further insight.Posts mostly point to areas of agreement or disagreement and asking clarification questions aboutprevious posts.Posts are disjointed.Little attempt is made to respond to previous comments and/or discussion questions.Posts do not point to areas of agreement or disagreement and do not ask clarification questions aboutprevious posts.20%
TimelinessParticipants show a lot of initiative by posting replies or comments within days. Participants invite peer responses and engage in meaningful interaction in the discussions.Discussion ends by a deadline (e.g. end of that module).Participants show some initiative by posting replies or comments within one week.Participants invite responses from classmates.Discussion ends by a deadline.Participants show little initiative by posting replies or comments after more than one week. Participants suggest few ideas that encourage responses.Discussion among participants begins late or not at all (e.g. instructor mustprompt them when the module is over).Participants show no initiative by posting replies or comments after more than one week. Participants suggest no ideas that encourage responses.Discussion among participants is very limited.Participants do not show any initiative by not posting replies or comments within one week.Participants do not invite responses from classmates. Discussion does not end by a deadline.20%
ConventionsOverall, participants follow online conventions, extend courtesy towards fellow participants by being respectful, polite and adopting a positive tone in posts. Participants compliment and provide constructive feedback to previous posts.Overall, participants follow online conventions, extend courtesy towards fellow participants by being respectful, polite and adopting a positive tone in posts.Overall, participants do not always follow online conventions and occasionally do not extend courtesy towards fellow participants, make curt responses or use a slightly critical tone in posts.Participants sometimes do not acknowledgeprevious posts.Overall, participants sometimes follow online conventions and at times lack courtesy towards fellow participants, make curt responses or use an overly critical tone in posts. Participants often do not acknowledge previous posts.Overall, participants do not follow online conventions, lack courtesy towards fellow participants by being disrespectful, impolite and adopt a negative tone in posts. Participants fail to acknowledge previous posts.20%

Rubric: written assignments

CriteriaAccomplished (A)Proficient (B)Partially proficient (C)Borderline (D)Fail (F)Weight on assessment
Problem identificationThe business issue has been correctly identified, with a competent andThe student correctly identified the issue(s),The student correctly identified the case (issues), consideringThe student correctly identified the issue(s) butThe student failed to correctly identify the30%
comprehensive explanation of key driving forces and considerations.Impact on company operations has been correctly identified. Thorough analysis of the issue is presented.taking into account a variety of environmental and contextual drivers. Key case information has been identified andanalyzed.obvious environmental/con textual drivers.There is evidence of analysis, but it lacks depth.analysis was weak. An absence of context – the work is basically descriptive with little analysis.issue(s); analysis was incorrect or too superficial to be of use; information was misinterpreted.
Information gatheringThe student showed skill in gathering information and analyzing it for the purposes of filling the information gaps identified.Comprehensive and relevant.Relevant information gaps were identified and additional relevant information was found to fill them. At least two different types of sources were used.The student demonstrates coherent criteria for selecting information butneeds greater depth.The student correctly identified at least one information gap and found relevant information, but which was limited in scope. Some evidence of sound criteria for selecting information but not consistent throughout. Needs expansion.An information gap was identified and the student found additional information to fill it. However, this was limited in scope. Weak criteria for the selection of necessary information.Information was taken at face value with no questioning of its relevance or value. Gaps in the information were not identified or were incorrect.20%
ConclusionsThe student evaluated, analyzed, synthesized all information provided to create a perceptive set of conclusions to support the decisions andsolutions.The student evaluated, analyzed and synthesized to create a conclusion(s) which support decisions and solutions.The student reached conclusions, but they were limited and provided minimal direction for decision- making and solutions.The conclusion was reasonable but lacked depth and would not be a basis for suitable strategydevelopment.The student formed a conclusion, but it was not reasonable. It was either unjustified, incorrect or unrelated to the case inhand.25%
SolutionsThe student used problem solving techniques to make thoughtful, justified decisions about difficult and conflicting issues. A realistic solution was chosen which would provide maximum benefit to the company.Alternative solutions were explored and ruled out.The student used problem solving techniques to make appropriate decisions about complex issues.Relevant questions were asked and answered. A realistic solution was chosen.Alternatives were identified, explored andruled out.The student used problem-solving techniques to make appropriate decisions about simpler issues.The solution has limited benefit but does show understanding of implications of the decision.Alternatives were mentioned but not explored.The student used problem solving techniques to make decisions about simpler issues but disregarded more complex issues.Implications of the decision were not considered.Alternatives were not offered.The student formed a conclusion, but it was not reasonable. It was either unjustified, incorrect or unrelated to the case in hand.25%

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