Role Of Internet In International Business Narrative Essay Example
To support management planning and decision-making, it is essential to analyze financial statements as a measure of business performance and recognize the effects of external interpretations. Lincoln Indicators provides nine golden rules for successful shareware investing, covering financial health, management assessment, outlook/forecast, share price value, sentiment, liquidity and size, principal activities, price-sensitive announcements. To evaluate two listed companies from the same industry, an investment report should be written based on these criteria, calculating key accounting ratios for profitability, liquidity, capital structure, asset efficiency, and market performance over a three-year period. Details about the golden rules are available on http://www.Illumination's.Com.AU/ Extraterrestrials/Goldenrod's; a PDF information sheet can be downloaded at http://www.Illumination's.Com.AU/Content/Static/PDF/AGRO-leno-Sheet.PDF.The first rule in assessing companies is to determine their financial health by analyz
...ing their financial ratios for at least two consecutive years. The second rule measures management quality and leadership capabilities through ROAR, ROE, PEPS growth, and revenue growth. The market capitalization and industry of each company should be identified and assessed using Lincoln Indicators' benchmark. The third rule involves finding analyst forecasts for each company's earnings to examine their sustainability. Lastly, current share prices should be compared to estimated prices calculated using equity valuation del, specifically the earnings multiplier approach. Investors are advised to invest in undervalued shares, where market share price is less than estimated share price.To ensure capital gains for investors, it is expected that undervalued shares will increase in price to the intrinsic value of equity. Follow these golden rules to make informed investment decisions:
Golden Rule 5: Share Price Sentiment - Observe the 12-month performance of a company's share price and compare it with the performance of the All Ordinaries
Index. Avoid investing in stocks that underperformed the index.
Golden Rule 6: Liquidity and Size - Ensure a company's share is 'liquid' by checking the daily volume traded figure, which should be at least five times the investor's exposure level.
Golden Rule 7: Principal Activities - Familiarize yourself with each company's business operations, including what they sell/provide, their industry, competitors, etc. Perform a brief SOOT analysis to identify strengths, weaknesses, opportunities, and threats that may impact future earnings.
Golden Rule 8: Price Sensitive Announcements - Read news and announcements about the selected companies as price-sensitive ones can positively or negatively affect share prices. Avoid investing in companies with negative news or announcements.
Golden Rule 9: Follow all of the above rules.
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