Assignment 3

Investment portfolio evaluation

3/14/2013
Ankitha Pandey 822-547-501
Jijo Francis
822-417-173
Lejo John
822-231-809
Rathul Chowdary 822-327-698
Rinkesh Patel
822-543-252

Managerial Finance Assignment 3 Due: March 14, 2013 ( Week 9) Worth 5% of Final Grade
Based on the 5 companies selected for the Investment Portfolio, complete the following Portfolio Evaluation.
Each position has an initial equal value of $200, 000.
Company/

Symbol/

Price in
which
stock was
purchase
d
01/ 10/13

Value/%
Portfolio

Number of
Shares
bought

Earned
dividend
(if any)

01/ 10/13

Change in
Market price
as @ 03/11/13

01/ 10/13

Exchange

RBC

$60.88

$200,000
/20%

3285

$200,000
/20%

4756

Market
Valuation
Change %

.63

Return
To date

Value/% Portfolio

Impact of Interest Rates

as @ 03/11/13

(Debt and Profitably impact)

(use
March
11/13
closing
price)

$62.65,
2.907%
Increase

3.942%

$47.17,12.175
% increase

13.56%

$207875/20%

Potential

Impact of

Debt

Net

impact of

reduced

Ratio

Profit

increase in

interest rate

interest rate on

on debt

Revenue/Sales

structure

high

low

$42.05

Tim
Hortons
Barrick
Gold

$48.67

$200,000
/20%

4109

.26

$52.51,7.88%
increase

8.42%

$216832/21%

low

average

$33.95

$200,000
/20%

5891

.21

$29.64,12.695
% decrease

-12.08%

$175609/16.98
%

high

average

Brookfield

$37.21

$200,000
/20%

5375

$38.64,3.843
% increase

4.25%

$208496/20.20
%

high

$1,000,000

23267

Asset

.15

$227099/21.8%

Total
Portfolio

100%

1.83

Ratio

Margin

8.807

26.17%

19.87%

12.26%

low

high

38.24

13.83%

21.93%

15.16%

23.25

12.52%

34.20%

20.36%

-73.81%

-52.24%

39.84%

18.55%

7.10%

17.92%

ent Inc

Total
Dividend
s

P/E

Managem

$224.1
3

ROE

Bell
Canada

.58

Key Ratios (Use Annual Data)

Total
Return

$10361482
100%

29.49
%

high

42.65
%

Royal Bank of Canada (TSE:RY)

Opening price on January 10th 2013

: $60.88

Closing price on January 12th 3013

: $62.88

Dividend per share

: $0.63

The value of portfolio has increased to $207875 which was purchased for $200000, which depicts a positive trend. Therefore the
value of investment has increased
Debt ratio has remained stable
There is an increase in the profit margin, mainly due to the increase in Canadian household borrowing (Financial Post)
There is an increase of .41 % in ROE, showing the effect use of investors money (Google Finance)
Summary: RBC shows continuous progression in Business and effective cost discipline

Bell Canada (TSE:BCE)

Opening price on January 10th 2013

: $42.05

Closing price on January 12th 3013

: $47.17

Dividend per share

: $0.58

The value of portfolio has increased to $227099 which was purchased for $200000 which is a positive trend.
Debt ratio has almost remained same
There is an increase in the profit margin, as a result of increasing demand from clients
There is an increase of .63 % in ROE (Google Finance)
Summary: With the improved technology and cost cutting steps Bell Canada is expecting a profitable year ahead

TIM HORTONS (TSE:THI)

Opening price on January 10th 2013

: $48.67

Closing price on January 12th 3013

: $52.51

Dividend per share

: $0.26

The value of portfolio has increased to $216832 which was purchased for $200000
Debt ratio has remained stable

There is an increase in the profit margin (12.52%, Q4 DEC 12) (Google Finance), showing the company attracting more loyal
customers
Increase of .22 % in ROE (Google Finance)
Summary: In spite of the challenging economic and operating conditions, many of the strategic innovation has helped Tim Hortons
to achieve profit in the financial year (Tim Horton's)

Barrick Gold Corp (TSE:ABX)

Opening price on January 10th 2013

: $33.95

Closing price on January 12th 3013

: $29.64

Dividend per share

: $0.21

The value of portfolio has decreased to $175609 which was purchased for $200000, which depicts a negative trend. Therefore the
value of investment has decreased
Debt ratio has remained stable

There is a decrease in the profit margin due to lack of insight in investments

Decrease in ROE by 69.16%
Summary: Barrick focused on free cash flow and generating returns extremely, than increasing the production. This is creating
some amount of hesitation among the investors (Seeking Alpha)

Brookfield Asset Management Inc. (TSE:BAM.A)

Opening price on January 10th 2013

: $37.21

Closing price on January 12th 3013

: $38.64

Dividend per share

: $0.15

The value of portfolio has increased to $208496 which was purchased for $200000. Therefore the value of investment has
increased
Debt ratio has remained stable
Net profit margin decreased compared to the previous year, due to increase in cost (The globe and mail)
There is a decrease in ROE

Summary: Brookfield achieved considerable progression in resources from operations. Revenue increased to $5.39 billion from
$4.12 billion

Bibliography
Financial Post. n.d. <http://business.financialpost.com/2013/03/05/housing-fuels-record-7-33-billion-bank-profits/>.
Google Finance. n.d. <https://www.google.ca/finance?q=TSE%3ARY&ei=T5BBUbiRApS20AHMpAE>.
Seeking Alpha. n.d. <http://seekingalpha.com/article/1204861-barrick-gold-faces-higher-costs-books-impairment-charges-on-copper-business>.
The globe and mail. n.d. <http://www.theglobeandmail.com/globe-investor/brookfield-asset-profit-weaken-revenue-increases/article8712571/>.
Tim Horton's. n.d. <http://www.timhortons.com/ca/en/about/reports.html>.