Principles of Finance

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PRINCIPLES OF FINANCE

Principlesof Finance

Principlesof Finance

Fordmotors company

FordMotors Company is one of the largest motor vehicle manufacturing andsales companies in the United States. The company operates in twomajor sectors, automobile and finance sectors. The automobile sectordeals with manufacturing and sale of motor vehicles and motor vehicleaccessories. Its primary brands are Ford and Lincoln. The financialservices sector mainly deals with financing of automobiles throughdealers. The company has been in existence since the beginning of the20thcentury. In the month of April 2015, Ford sold over 222,000 vehicles,both tracks and cars. The midsized SUV was one of the bestsellingford cars with a 78 percent increase in sales. The company has alsoentered into new financial agreement with several lenders such as JPMorgan chase bank (Bloomberg, 2015a).

Inthe stock market, Ford Motors Company is trading at about 15.9dollars per share with a market capitalization of 62.9 billion. Overa period of ten days, the average volumes in the market have beenabout 28 million shares traded. With a dividend yield of 3.48 percentand a 52 weeks low of 13.26 dollars, the shares are very attractivefor investment. However, although the total assets stand at over 208billion dollars, it is important to note that the net income of FordMotors Company has been shrinking every consecutive year from 7.2billion dollars to 3.2 billion dollars (Bloomberg, 2015a). Therefore,a bold decision is required to invest in Ford Motors Company.

HarleyDavidson Inc

HarleyDavidson Inc is a motorcycle manufacturing and distributing companyin the United States which is listed in the stock exchange. Inaddition to manufacturing and distribution of motorcycles and relatedproducts, the company also provides financial services, mainlyfinancing of motorcycles as well as insurance services. Their mainbrands include Street, Dyna, Softail, Touring and Sportster. Theyalso deal with a wide range of merchandise mainly motorcycleaccessories such as riding gears and cosmetic accessories. HarleyDavidson Inc. which has independent dealers throughout the world hasbeen inexistence since 1903 when it was founded in Wisconsin state(Bloomberg, 2015b).

HarleyDavidson Inc shares are trading in the stock market at about 56.69dollars with a market capitalization of 11.9 billion. In the last oneyear, the lowest trading was reported in October 2014 at 54.22dollars and a high of 74.05 in May last year. According to thecompany balance sheet, it has assets worth over 9.5 billion dollars. With a dividend yield of 2.01 percent, the stock also promises someconsistent earnings. This is because over the years, the company hasreported growing net revenues reaching 5.6 billion dollars in lastfinancial year. This has resulted into reduction of cost of goodssold on the sales. It is therefore an attractive investment option(2015b).

Starbucks

Starbucksis a leading confectionary which roasts and market coffee in majorcities in the United States and other parts of the world. Although ismain product is roasted grounded or whole grain coffee, it deals withother products such as tea, juices, bottled water as well asbreakfast, lunch or dinner snacks. It also sells beverages makingequipment. Starbucks operates over 21 thousand outlets in over 65countries around the world. The company was founded thirty years agois Seattle Washington (Bloomberg, 2015d).

Inthe stock market, Starbucks shares are selling at about 49.95 dollarsper share with a market capitalization of about 75.5 dollars.Although it has performed fairly well in the market with averagetrading volumes of 9.8 million shares, it recorded a low trading inJuly last year, at 34.57 dollars per share. Starbucks has an assetbase of over 10.7 billion dollars. However, the dividend yields ofStarbucks are relatively low at 1.15 percent. In terms of revenues,Starbucks has performed relatively well recording year over yeargrowth to reach 16.4 billion dollars in the last financial year. Thishas been attributed to bottom line growth in the recent past(Bloomberg, 2015d).

Microsoft

Microsoftis arguably the largest software development and marketing company inthe world. The company licenses ‘windows operating system andrelated software’. Microsoft provides a wide range of softwaresolutions in the computing and mobile telephone industry. Thetechnology giant was founded in 1975 and is considered to have playeda critical role in the establishment of modern computer basedtechnology. In the recent past, Microsoft Inc. has establishedpartnership with other technology companies such as Adobe, Infosysand mobile phone manufacturers in the development of software(Bloomberg, 2015c).

Microsofthas a huge presence in the stock markets in terms of marketcapitalization and trade volumes. Its shares trade at about 48.58dollars per share with a market capitalization of over 390 billion.The average trading volumes over the last ten days is over 54.6million shares. In the last one year, the shares have ranged betweena low of 38.51 dollars per share recorded in early July 2014 and ahigh of 50.05 dollars in mid-November 2014. Due to the reputation ofthe company and a dividend yield of 2.43 percent, Microsoft is a goodcompany for investment. With an asset base worth over 172 billiondollars, the company has a huge liquid assets base to meet itsobligations (Bloomberg, 2015c).

References

Bloomberg(2015a). FordMotor Co.http://www.bloomberg.com/research/stocks/financials/financials.asp?ticker=F

Bloomberg(2015b). Harley-DavidsonInc.,http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?ticker=HOG

Bloomberg(2015c). MicrosoftCorp,http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?ticker=MSFT

Bloomberg(2015d).StarbucksCorp,http://www.bloomberg.com/research/stocks/snapshot/snapshot.asp?ticker=SBUX