Finance students in the past have participated in national student competitions. They are a great opportunity to practice and further your knowledge and skills you learned in the finance program at PSU. Because not all of you are finance major, grading will be generous as long as you follow the instructions (e.g., number counts for answers). In addition, it’s not a technical assignment. It’s an opportunity to look back and evaluate what you have learned, how they can be useful, and what else you should learn. Remember you chose finance as your major because you like something about finance. Follow your passion and keep learning what excites you, and you will have a bright future ahead of you. This is the last assignment of this course. Thank you for working hard in this course for the past 7 weeks.
Q1 What is the title of the finance student competition you may consider competing? Hint: You may Google search something like “student competitions in finance”.
The competition I would consider competing in is the CFI Financial Modeling Case Competition. It requires participants to build a financial model for a business, and value the company. I would have to build a model, make recommendations, and pitch my idea to judges on whether or not I recommend investing in the business.
Q2 Describe the eligibility requirements, if any (e.g., undergraduate college student).
The requirements include undergraduate students, graduate students, and professionals as well.
Q3 What are the competition criteria?
There are 9 different criteria worth between 5 to 15 points. The overall score is out of 100 points. 1. Investment Rationale and Strategy (15%) 2. Drivers and Assumptions (10%) 3. Target Model (15%) 4. Pro Forma Model (15%) 5. Follows Accepted Formatting Conventions (10%) 6. Valuation and Deal Mix (15%) 7. Effective Sensitivity and Accretion Analysis (10%) 8. Investment Presentation Slide Deck (5%) 9. Presentation Recording (5%)
Q4 What is the deadline for the submission?
This year’s competition has already happened, but the submission date was October 26th, 2020
Q5 Why are you interested in this competition?
This competition interests me because it is very similar to what we have learned in class. I also am a strong believer in analyzing a company thoroughly in order to make an investment decision. A company’s financials show a lot about whether it is a good investment or not.
Q6 What would be a possible project you may turn in for the competition? Describe it in at least 100 words.
A project that I would consider would focus on a large fortune 500 company. I would break it down into separate sections focusing on different aspects of the company such as the financial statements in one category, with analysis of the income statement, balance sheet, and cash flow statement. The next section would consist of analyzing data for that particular company’s competition, to find out different strength and weaknesses of the industry. A third section will show graphs and key points of the historical data on returns and the stock price, compared to earnings and other indicators such as dividends paid out. I could also include economic data to track events that may affect the company’s performance
Q7 List things that you learned in financial modeling course that could be helpful for your project in Q6. Describe it in at least 100 words.
Financial modeling has showed me the importance of analyzing and interpreting data, and the power of using programs like R. One section of the course that I found could be helpful for a project like this was stock analysis. This section had parts that focused on calculating how risky a certain investment is, while also incorporating the return relative to the risk. This would be useful for my project because risk plays a big part in deciding whether an investment will be worth it or not. Another section I think would be useful was the portfolio analysis. This could be used not only to analyze a portfolio, but compare large amounts of data for non-related items.
Q8 List things that you learned in other finance courses at PSU that could be helpful for your project in Q6. Describe it in at least 100 words.
One course that I am currently taking is Financial Management. This course has taught me about topics such as the dividend growth model, which can be used in my project. Another topic that is useful is the ways that companies help expand business, raise capital, and boost their share price. Looking at retained earnings and how they reinvest them is an important part of company growth, which is crucial for an investment pitch. Another class that taught me helpful things was macroeconomics. This gives a different way of looking at a company, instead of just crunching numbers I can compare what is happening in the world with how it will affect the company.
Q9 Check the finance blog below and see if you see any post that may be helpful for your project in Q6. Discuss how it can be helpful in at least 100 words. Hint: The author of the blog writes articles on financial analysis using R. https://rviews.rstudio.com/categories/reproducible-finance-with-r/
The post that I read was about daily volumes, holidays, and BLS reports. They showed codes for 50- and 200-day rolling averages for different stocks. The post also incorporated how the daily volume behaved during these periods. These calculations show a visual as well, which is important for a presentation. The last thing this post focused on was how the employment situation in the economy was on the first Friday of each month. This brings an economic angle to the company, where it can be compared to the current share price and how it affects it.
Q10 List things that you think could be helpful but not taught/offered at PSU finance courses. Discuss how it can be helpful in at least 100 words.
I think one of the things that is extremely important in finance is public speaking and making a pitch. So far, I have only taken one course that focused on this even though employees must report their findings and research daily. Even if it’s not pitching a stock or business idea, presenting to employees is an important thing. Many people can read a slideshow, but have trouble making it convincing. Another thing I think should be offered at Plymouth State is not much of a full course but incorporate knowledge on how to implement things we learn into your own life. For example, we learn about the concept of a company growth, risk assessment, etc., but rarely ever perform these equations with a real company or financial statement.