Overview

Due to the inherent growth in the electronic production and storage of information, there is often a feeling of “information overload” or inundation when facing the process of quantitative decision making. As an analyst your job will often be to conduct analyses or create tools to support quantitative decision making.

A principle tool used in industry, government, non-profits, and academic fields to compensate for the information overload is the information dashboard. Functionally, a dashboard is meant to provide a user with a central resource to present in a clear and concise manner all the information necessary to support day-to-day decision making and support operations.

As a huge motorsports fan, a regular viewer of Formula one, Nascar, MotoGP and WER, I always wonder wehther there is a connection between manufacture’s stock prices and their performance in the race track. Therefore, taking this project’s opportunity, i want to expolore the following four stocks - Ferrari, Mecedes Benz, Aston Martin and Honda, which are the big players in multiple racing events.

Jiaqian Liu

Objective

The objective of this laboratory is to plan, design, and create an information dashboard to support quantitative decision making. To accomplish this task, you will have to complete a number of steps:

1.Delineate the necessary decision (I will do that below).
2.Identify what information will be relevant to decision making.
3.Find and collect the data necessary to create your visualization plan.
4.Organize and summarize the collected data.
5.Design and create the best visualizations to present that information.
6.Finally organize the layout of those visualizations in a way that conforms to the theory of dashboarding.
7.Write a summary about what decisions you made based on the visualizations that you developed.

The Decision & Rules

You make investments for an organization; your objective is to purchase securities/commodities for the key objective of maximizing profits. You want to make an investment in securities/commodities to make some short-term gains. You are considering investing in one of any four companies, for example: Twitter (TWTR), Microsoft (MSFT), or Apple (AAPL) (don’t use these). Choose 4 companies or commodities and determine which one of the four will produce the most short-term gains. Use your imagination.

Financial Indicators/Metrics

• P-E Ratio - It is the ratio of a company’s share price to the company’s earnings per share. This ratio is used for valuing companies and to find out whether they are overvalued or undervalued.
• EPS - It is the portion of a company’s profit that is allocated to every individual share of the stock and helps in understanding the financial strength of a company
• Dividend Yield Ratio - is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.
• Market Cap - the total value of a company’s shares.

Key Indicator Analysis

On Track Performance

All four car manufactures are key players in various racing events such as Formula 1, Nascar, World Endurance Championship and MotoGP. Ferrari and Mecedes are currently not performing at their best as they fell out of the championship fight. Honda engine rules the Formula 1 Races as Red Bull came home with a P1 and P2 at almost all grand prix. Ford’s main battlefield is in the states but they are re-entering the ERUO series.

Key Indicators Analysis

By analyzing key indicators such as “P/E Ratio”, “Price/EPS Estimate Next Year”, “Dividend Yield” and “Market Capitalization” to compare the four car manufactures performance from 03/01/2022 to 03/01/2023, we can see:

• P-E Ratio - UNH has the highest P-E Ratio (48), which means that investors are expecting higher earnings growth in the future, then followed by Honda of 8.13 and Mercedes of 5.17.

• EPS - Ferrari also have the highest earning per share, following by Ford, Honda and then Mercedes.

• Dividend Yield - All four companies distributes dividends. Honda has the highest dividends ratio (4.8)

• Market Cap - In terms of the market capitalization perspective, Mercedes is the biggest company, almost twice of the rest.

Individual Trends Analysis

On a overall perspective, car manufacturing business is not the easiest in a declining economy especially with a chip shortage and sky raising interest rates. Despite all that, Mercedes and Ferrari still holds a upward trend. I would recommend buy in Ferrari since it has a upward trend of stock price for the past 12 month and the highest P-E ratio and Earnings per Share. However, looking at and Analyze stock’s historical performance and based decision on that is very limited. We should also look into their fiancnail statements such as balance sheet, cash flow and income statements.