Financial Investment Research Paper Example | Topics and Well Written Essays - 3000 words

monetary Investment - Research Paper ExampleRatio analysis and sh atomic number 18 price analyses atomic number 18 2 most important and commonly used tools to analyze the financial position of a particular profligate. A proper fundamental and technical analysis generally provides a basic idea regarding these aspects and helps investors make communicate enthronisation decisions. Generally the intrinsic value of the stock is determined from the financial facts given the annual typography of the company using free-cash flows and it is compared to the current market price of the stock. When the stock is found to be undervalued thus it provides an fortune for the investor to buy the stocks at pooh-pooh current price and then sell it in future when stock prices approaches target price. This strategy will help the investor make profits by buying stocks at lower price and then selling it when stock prices appreciates and ceteris paribus. Options for Investment Decision While there are more options available to an investor for investment, it is important to note that not all investment destinations are equally safe for investment when risk of investment is considered. The safest investment destination is governing securities because there are very limited chances that the government will default. Another most commonly preferred investment avenue is common stocks of publicly traded companies. Companies whose stocks are listed in stock exchanges (like NASDAQ, NYSE, etc.) may be traded in secondary markets. But whenever the investor considers investment in rectitude oriented securities and stocks the risk of investment significantly increases. This is because when the investor buys paleness shares of any company the investor actually subscribes to paid-up equity capital of the owners of the company. This automatically makes the investor the new stocks holder and assumes that the investor will bear the risk associated with business. Purchasing equity shares pr ovides the investor the opportunity to earn dividends and residual profits proportionate to respective subscription or investment. Equity stocks are risky because the shareholders are entitled to earn from investment only after all liabilities of the business entity has been paid-off. This means that in fibre the business has no profits left for distribution to shareholders after honoring business liability then no dividends will be paid to shareholders. Thus, investment in company stocks is both risky and honour in the sense that higher the risk the higher would be the expected return. It is advised that before qualification any investment decisions for investment in particular stocks the financial managers must gather all prerequisite information related to business regarding financial position, outstanding financial liabilities and the ability of the business to honor such liabilities. Company Overview The company chosen for financial analysis is Apple Inc. (Ticker Symbol AA PL) which is a Fortune cholecalciferol company whose shares are publicly traded. Apple Inc. is a leading hardware and software company which has provide in Cupertino, California, U.S. The company has over 400 global retail stores spread in over 14 countries and it is listed in NASDAQ as a publicly traded company. Apple also forms a component of S&P 500 composite index and NASDAQ-100 component. The financials of the company is very strong and for the year ending 2012, the company report a net profit of over UD$ 41