M I S 1 1 1 – C o m p u t e r s a n d t h e I n t e r n e t w o r k e d S o c i e t y

Applied Business Project 1 Guidelines Eller College of Management This document contains instructions on completing ABP-1 for MIS 111 Initial Release: 29 August 2022

Fall 2022

On-time Deadline for Completing Submission of ABP-1

Wednesday, September 14, 2022 by 11:59pm

The D2L submission process (i.e., the upload of your report must finish and a confirmation message displayed by D2L) must be

completed by 11:59pm local Tucson time (MST or UTC/GMT-7) by the assignment due date. This is a hard deadline and no

extensions are offered to the on-time assignment due date, so be sure to plan your work and submission attempts accordingly.

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Table of Contents Assignment Overview …………………………………………………………………………………………………………… 4

Fundamental, Technical, and Quantitative Analysis Overview ……………………………………… 4

Finding Your Required Assigned Company ………………………………………………………………………. 5

No Cost Access to Data Sources for Analysis …………………………………………………………………….. 5

Task 1: Company Profile ……………………………………………………………………………………………………… 6

Important Note on Task 1 Sample Figures ……………………………………………………………….. 6

Task 1.1: Company Governance …………………………………………………………………………………….. 6

Task 1.2: Financial Profile ………………………………………………………………………………………………. 7

Task 1.3: Investment Assessment………………………………………………………………………………….. 8

Task 2: Fundamental Analysis ……………………………………………………………………………………………. 9

Important Note on Task 2 Sample Figures ……………………………………………………………….. 9

Task 2.1: Financial Metrics ……………………………………………………………………………………………… 9

Important Conventions on Reported Financial Report Data………………………………. 10

Task 2.2: Media Perspectives ………………………………………………………………………………………. 12

Section 3: Quantitative Analysis………………………………………………………………………………………. 12

Important Note on Task 3 Sample Figures …………………………………………………………….. 12

Task 3.1: Stock Price Analysis ……………………………………………………………………………………… 13

Specific requirements for each column in Table 4: …………………………………………………… 14

Task 4: Technical Analysis ……………………………………………………………………………………………….. 18

Important Note on Task 4 Sample Figures …………………………………………………………….. 18

Task 4.1: Financial Metrics Needed to Calculate Financial Ratios …………………………. 18

Task 4.2: The Acid Test ………………………………………………………………………………………………….. 19

Task 4.3: Working Capital Ratio …………………………………………………………………………………… 19

Task 4.4: Price to Book Ratio ………………………………………………………………………………………… 19

General Applied Business Project Report Guidelines …………………………………………………… 21

Required Business Report Formatting Elements ……………………………………………………… 21

Citing Sources Required for Discussion Questions, Tables and Figures ……………….. 21

Major Business Report Penalties ……………………………………………………………………………………… 22

Not using the ABP-1 report template ………………………………………………………………………….. 22

Not submitting your report in PDF file format ………………………………………………………….. 22

Not using your assigned company ……………………………………………………………………………….. 22

Not including the E-Tegrity statement ……………………………………………………………………….. 22

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Submitting an ungradable document ………………………………………………………………………….. 22

On-time Deadline for Completing Submission of ABP-1 ……………………………………………… 23

Subject to Change Statement …………………………………………………………………………………………….. 23

Changes and Errata List ……………………………………………………………………………………………………… 23

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MIS 111 Applied Business Project 1

Assignment Overview

A key contribution of Information systems for an enterprise is the ability to convert data into information (data in context). For this project, your task is to create a structured business report for your assigned publicly traded company from fundamental, technical, and quantitative investment perspectives. Your business report will discuss the following aspects of your assigned company:

• a profile of your assigned company and its industry; • a fundamental analysis of your assigned company’s financial statement; • a technical analysis of your assigned company assessing trading data of your

company and a competitor in the same industry sector against the broader exchange market as a whole; and, finally,

• a quantitative analysis of your assigned company based on comparing key ratios.

Fundamental, Technical, and Quantitative Analysis Overview

The most common methods that investors use to analyze the benefits and risks associated with long-term investments in the stock market include fundamental analysis, technical analysis, and quantitative analysis. Long-term investors look for investments that offer a greater probability of maximizing their returns over a longer period of time. Generally, this means at least one year, although many financial experts suggest time frames of five to ten years or longer. One of the benefits of being a long-term investor is the ability to save and invest for big goals that require significant time to achieve the highest rewards, such as retirement.

By understanding the differences between fundamental, technical, and quantitative analysis methodologies, long-term investors give themselves access to three valuable stock-picking strategies they can use for making profitable investment decisions. Investors and analysts will frequently use a combination of fundamental, technical, and quantitative analysis when evaluating a company’s potential for growth and profitability.

• The goal of fundamental analysis is to come up with a fair value of a company by evaluating all aspects of the business, along with the industry, the market as a whole, and the domestic and global environment.

• The goal of technical analysis is to evaluate data—such as historical returns and price changes—to chart patterns that can be used to estimate future price movement for securities and the market as a whole.

• The goal of quantitative analysis is to use simple financial ratio calculations to gain insight into the valuation of a specific company or broad market.

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Fundamental analysis is most often used when determining the quality of long-term investments in a wide array of securities and markets, while technical analysis is used more in the review of short-term investment decisions such as active trading of stocks. Investors use quantitative analysis to evaluate the financial stability of a company.

Adapted from: Horton, Melissa (February 5, 2020), Investopedia, “When to Use Fundamental, Technical, and Quantitative Analysis”, https://www.investopedia.com (Accessed: 18 January 2021).

Finding Your Required Assigned Company

The ticker symbol and name of your assigned company can be found on D2L in your grade book in the “ABP Ticker” item. Using your ticker symbol, we recommend using https://finance.yahoo.com to find information about the company, an industry competitor, and the market averages.

No Cost Access to Data Sources for Analysis

All information required for this assignment is available at no cost on the standard access Yahoo! Finance website at: https://finance.yahoo.com/

Important Note: You are not required to purchase Yahoo! Finance Premium for this assignment. If you encounter data that is not accessible or blocked by a paywall, please contact an instructor for assistance with accessing the required information.

While we recommend using Yahoo! Finance, you may use other sources, such as CNN Money, or other commercial investment services; however, the names used for some financial measures may not be the same used in this document.

IMPORTANT NOTE

To receive full credit for this assignment, you must use your assigned company, as shown in the “ABP Company

Ticker” item in your MIS 111 grade book on D2L

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Task 1: Company Profile

Important Note on Task 1 Sample Figures: the items to be included for Task 1 do not match the items shown in the style sample examples Tables 1 and 2. Be sure your report includes the correct list of items for Task 1 in your report.

Task 1.1: Company Governance

For Task 1.1, create a table describing the governance of the company. The following information should be organized in the corresponding order as a table (you may create this table as an MS Word table in your report or you can format the table in Excel and transfer it to your report). You company profile must include the following information about your assigned company. To assist you in preparing your company profile, the section where the information can be found on Yahoo! Finance is shown in parentheses following each require item.

• Company’s legal company name (“Profile”)

• Company’s trading exchange and ticker symbol (“Summary”)

• The URL for the company’s primary customer-facing website (“Profile”)

• Location (city, state) of its corporate headquarters (“Profile”)

• Name of the most key executive (typically, President or CEO) of the company

and their title (“Profile”)

• Calendar date (day and month) of the company’s most recent fiscal-year end

(“Financials” / “Annual Balance Sheet”)

• The company’s number of full-time employees (“Profile”)

• Company’s industry sector (“Profile”)

• Company’s industry classification (“Profile”)

Table 1 – Walmart Corporate governance (Sources: https://finance.yahoo.com/quote/WMT/financials?p=WMT &

https://corporate.walmart.com/our-story/leadership Referenced 8/29/2019)

Task 1.1 Corporate Governance Company’s legal company name Walmart Inc.

Company’s trading exchange and ticker symbol NYSE: WMT

Company’s primary website URL https://www.walmart.com/

Corporate Headquarters Location Bentonville, AR 72716

Most key executive & title Doug McMillon:

President and CEO, Walmart

Company fiscal year end 1/31/2020

Company’s full-time employees 2,200,000

Industry sector Consumer Defensive

Industry classification Discount Stores

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Task 1.2: Financial Profile

For Task 1.2, create a second table showing your company’s “financial profile” with the following information, using the information from a trading day since this ABP was posted on D2L (i.e., on or after August 29, 2022). You must include the date (on or after August 29, 2022) you collected your data for your “financial profile” as the first item in your Task 1.2 table, as shown below.

Table 2 – Walmart Financial Profile (Source: https://finance.yahoo.com/quote/WMT/holders?p=WMT Referenced 8/25/2020)

• For your selected specific trading day (on or after August 22, 2022), prepare a

table with the following data from the [Summary] page, except ownership, which

is from the [Holders] page:

o Previous Close Share Price

o Daily volume (Volume)

o Average daily volume (Avg. Volume)

o 52 week range (high and low)

o 1 Year (1y) Target Estimate

o Current Market Capitalization on the date selected (“Market Cap”)

o Company PE Ratio (TTM or Trailing Twelve Months)

o Company Earnings per Share (EPS (TTM))

o Percentage of shares owned by insiders [Holders]

o Percentage of shares own by institutions [Holders]

o Analyst “Fair Value” assessment (e.g., Overvalued, not the numeric value “xx.xx”)

o Overall Analysts Recommendation Rating (i.e., Strong Buy to Sell scale)

Task 1.2 Financial Profile The date of Financial Profile 8/25/2020

Previous Close 131.33

Volume 6,593,002

Average volume 8,748,015

52 week range (high and low) 102.00 – 137.63

1 Year Target Estimate 143.63

Forward Dividend and Yield 2.16 (1.64%)

Current Market Capitalization 369.938B

Company PE Ratio 20.84

Company Earnings per Share (EPS) 6.27

Company’s “Beta” 0.32

Percentage of shares owned by insiders 50.91%

Percentage of shares owned by institutions 30.95%

Analyst Fair Value Recommendation Overvalued

Recommendation Rating Sell

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When creating your information profile tables for Tasks 1.1 or 1.2, be sure to include an appropriate caption below your tables (e.g., “Table 1. <Company Name> Corporate Governance”, “Table 2. <Company Name> Financial Profile”, that also includes a citation to your online source), as shown in the examples above.

Since Yahoo Finance only displays this information on the summary and holdings pages for each company for one trading date, it is highly recommended that you screenshot the webpage or complete all parts of Task 1.2 of your project contemporaneously with the trading day you prepare your analysis for this task.

On Yahoo Finance, when looking at your company, the “Fair Value” assessment can be found on the left side of the “Summary” page below the summary financial date. The “Recommendation Rating” area on the “Summary” as one of the items in the right- hand column that contains a number of reports about the company. In addition, the “Recommendation Rating” can be found on the “Analysis” page.

Task 1.3: Investment Assessment

For Task 1.3, write a 150 word original (i.e., in your own words) assessment (range: 125 – 175 words) of your company’s stock price that evaluates the analysts Fair Value and Recommendation Rating guidance you reported in Task 1.2. Beyond the trading activity (stock price and volume) and your stock’s current share price relative to its 52-week price range, why do you think the analysts viewing your company’s stock as “overvalued” or perhaps a “buy” opportunity? Be sure to provide a specific justification based on information you found related to your company.

When preparing Task 1.3, you can consider either objective (e.g., recent financial performance or product sales trends) and subjective (e.g., press releases by your company and or other published news sources) performance measures. If you reference another online source, be sure to include a properly formatted citation.

Task 1 Self-Assessment Quality Review [20 points]

Point Goal 0-5 points 6-10 points 11-15 points 16-20 points

Assessment (Based on the

specific criteria

defined for each subtask)

Did not attempt or missing

content in two or more tables and/or written assessment or

citations

Missing major content in one or

more tables and/or written assessment and

citations

Missing some content in one

table or written assessment and

citations

Fully included most or all content in

tables, written assessment and

citations

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Task 2: Fundamental Analysis

Important Note on Task 2 Sample Figures: the items to be included for Task 2 do not match the items shown in the style sample example Table 3. Be sure your report includes the correct list of items for Task 2 in your report.

Fundamental analysis is the process of measuring a security's intrinsic value by evaluating all aspects of a business or market. Tangible assets including land, equipment, or buildings that a company owns are reviewed in combination with intangible assets such as trademarks, patents, branding, or intellectual property.

When evaluating the broader scope of the stock market, investors use fundamental analysis to review economic factors, including the overall strength of the economy and specific industry sector conditions. Fundamental analysis results in a value assigned to the security in review that is compared to the security's current price.

Task 2.1: Financial Metrics

For Task 2.1, create a spreadsheet table for the most recent three reported fiscal year-end closes (e.g., 2019, 2020, and 2021), as shown for your company on the “Financials” page. The data for each fiscal year is shown on the balance sheet, income statement or cash flow under the fiscal year-end close for your assigned company.

If your company has not published their results for the 2022 fiscal year, use the data for the last 3 fiscal years available, such as 2019, 2020, and 2021.

Your table should report the following financial metrics for all three columns. Values for some metrics may be show in thousands or millions, so be sure to include an appropriate note about the magnitudes you used for your reported values.

You will select the financial information listed below from the three major financial reports (i.e., Income Statement, Balance Sheet, and Cash Flow) submenus shown under the “Financials” section for your assigned company’s stock.

NOTE: You may have to click on “Expand All” on yahoo’s website to see all the data in the financial sheets (e.g., Balance Sheet, Income Statement, Cash Flow)

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Task 2.1 Financial Metrics

• From Balance Sheet

o Assets

▪ Total Assets

▪ Current Assets

▪ Total Non-current Assets

o Liabilities

▪ Total Liabilities

▪ Current Liabilities

▪ Total Non-current Liabilities

o Stockholder’s Equity

• From Income Statement o Total Revenue

o Cost of Revenue

o Gross Profit

o Operating Income (or Loss)

o Pretax Income

o EBIT (Earning Before Interest and Taxes)

• From Cash Flow Statement

o Operating Cash Flow

o End Cash Position

o Changes in Cash

o Free Cash Flow

• Under the “Historical Data” section, find the following values for the last

trading date in the most recent fiscal year. As a reminder, the last trading

day may be different than the last calendar day in a company’s fiscal year

o “Adjusted Close” stock price

o Volume (shares of stock traded)

Important Conventions on Reported Financial Report Data

Trading Day A “trading day” is when stocks are traded (bought and sold) on the

market (NYSE or NASDAQ) for the stock. Since stocks are not traded on weekends or

national holidays, the last trading day of each month may not be the last calendar day

of the month, for example, the last trading day for May 2020 was May 29th.

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All numbers in thousands (millions, or billions) The values shown in the major financial

reports (and large values such as the Market Capitalization on the Summary page) are

commonly shown “in” (i.e., rounded off to) thousands, millions (M), or even billions

(B). As shown in the sample Task 2.1 table below, all values reported in this table are

shown in millions. When using values from Yahoo! Finance for calculations, be sure

that magnitudes of all of the values you are using are consistent.

Table 3 – Walmart Financial Profile (Source: https://finance.yahoo.com/quote/WMT Referenced 8/25/2020)

Closing Date –> 1/31/2020 1/31/2019 1/31/2018

Cash and Cash Equivalents 9,465 7,722 6,756

Inventory 44,435 44,269 43,783

Total Current Assets 61,806 61,897 59,664

Total Non-Current Assets 174,689 157,398 144,858

Total Assets 236,495 219,295 204,522

Accounts Payable 46,973 47,060 46,092

Total Current Liabilities 77,790 77,477 78,521

Total Non-Current Liabilities 77,153 62,184 45,179

Total Liabilities 154,943 139,661 123,700

Total Stockholder Equity 139,661 72,496 77,869

Net Tangible Assets 123,700 41,315 59,627

Total Revenue 523,964 514,405 500,343

Gross Profit 129,359 129,104 126,947

Selling General and Administrative 108,791 107,147 106,510

Total Operating Expenses 108,791 107,147 106,510

Operating Income or Loss 20,568 22,117 22,249

Net Income 14,881 6,670 9,862

EBIT 22,715 13,806 17,453

Normalized EBITDA 33,702 24,484 31,118

Cash flows from operating activities 25,255 27,753 28,337

Cash at Beginning of period 7,756 7,014 6,867

Cash at end of period 9,515 7,756 6,756

Free Cash Flow 14,550 17,409 18,286

Adj. Closing price on Closing Date 113.02 92.72 100.75

Stock Volume on Closing Date 7,775,800 14,723,000 9,812,800

Cash Flow Statement Fundamentals

Historical Stock Price Data

Task 2.1 Historical Stock Analysis and Fundamentals (in millions except per share items)

Balance Sheet Fundamentals

Income Statement Fundamentals

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Task 2.2: Media Perspectives

For Task 2.2, select one press release article (from the “Press Relea