Question
Q1) a) What is fundamental analysis? If we use the top down approach for fundamental analysis, name the three levels of analysis and briefly describe
Q1) a) What is fundamental analysis? If we use the top down approach for fundamental analysis, name the three levels of analysis and briefly describe their usage. (10 marks)
b) What is Du Pont system (decomposition of ROE)? Using below data to assess the investment quality of theCompany in 2017 and 2018.
- Calculate the ROE and ROA for both years and comment on your findings. (15 marks)
- ROE and ROA, which one is more relevant to the investor? (5 marks)
- If the company didnt make any earnings, name two methods can be used for equity valuation. (10 marks)
| Year | 2017 | 2018 |
| Tax Burden | 0.6 | 0.65 |
| Profit Margin | 0.1 | 0.15 |
| Leverage | 1.67 | 1.67 |
| Asset Turnover Ratio | 1.00 | 1.45 |
| Interest Burden | 0.68 | 0.68 |
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International Finance Discussion Papers Managing Beliefs About Monetary Policy Under Discretion
Authors: United States Federal Reserve Board, Elmar Mertens
1st Edition
1288704577, 9781288704576
