Unilever compared to the NYSE Composite Index. Methods of analysis include: expected return and risk of individual securities; covariance and correlation of the securities with each other and the market index; portfolio’s risk and return; minimum variance portfolio; and, efficient frontier. All calculations can be found in the excel file, titled “FIN 302 TERM PAPER”, attached with this document. The results of the data analyzed show that all securities have negative returns, with very closely associated risks.
It also shows that even though all the securities are positively correlated to one nother, the degree of correlation varies slightly with one another, especially IBM and UL’s with NYSE- IBM is slightly more positively correlated to NYSE than Unilever. Portfolio analysis reveals that the minimum variance portfolio is (IBM-64%, UL-34%) and so it can be inferred that the optimum portfolio lies above a portfolio with more than 64% IBM stock. The Beta of the securities are less than 1 and therefore, less volatile than the market and is therefore recommended if the investor wants to avoid or ride out the market decline.
Finally the report also states the limitations of using beta and historical prices s a predictor of future returns. All findings are based on data obtained from the site, Yahoo Finance, and time period selected is between March 31st 2009-2014. The returns are calculated from Monthly Adjusted Closing Prices and all calculations are made in MS Excel. INTRODUCTION This is a Term Paper consist of the comparison between tuo renowned multinational companies IBM and UNILEVER. We tried to expose real life performance of Unilever and IBM.
To prepare this term paper we have come across with different financial and other necessary information of these two companies. From the collected information we understand the activities and he key factors of these companies in the market. We have analyzed different financial data of these companies which includes Profitability and Liquidity Ratios, The Capital Structure used by UNILEVER and IBM, and the analysis Of some key competitors of the each company are included in this term paper.
UNILEVER: Unilever is a multi-national corporation, formed of Anglo-Dutch parentage that owns many of the world’s consumer product brands in foods, beverages, cleaning agents and personal care products. Unilever employs nearly 1 80,000 people. Unilever is a dual-listed company consisting of UnileverNV in Rotterdam, Netherlands and Unilever PLC in London, England. This arrangement is similar to that of Reed Elsevier and that of Royal Dutch Shell prior to their unified structure.
Both Unilever companies have the same directors and effectively operate as a single business. 18M: International Business Machines Corporation (18M) is an information technology (IT) company. IBM operates in five segments: Global Technology Services (GTS), Global Business Services (GBS), Software, Systems and Technology and Global Financing. GTS primarily provides IT infrastructure services and business process services. GBS provides professional services nd application management services. Software consists primarily of middleware and operating systems software.
Systems and Technology provides clients with business solutions requiring advanced computing power and storage capabilities. Global Financing invests in financing assets, leverages with debt and manages the associated risks. The main purpose of the study is to find the position of the individual securities in the market, the risk and return and the volatility of the individual securities with the market. The report further analyzes the relation between the two securities – covariance and correlation, the total portfolio risk and eturn and the minimum variance portfolio.
This term paper will help an investor decide whether investing in these individual securities is worth the risk, or whether it is more convenient to diversify the risk by investing in both the securities in different weights at the same time. INTERNATIONAL BUSINESS MACHINES (18M) OVERVIEW International Business Machines Corporation provides information technology (IT) products and services worldwide. The company’s Global Technology Services segment provides IT infrastructure and business process services, including outsourcing, process, integrated technology, cloud, and echnology support.
Its Global Business Services segment offers consulting solutions for strategy and transformation, application innovation, enterprise applications, and smarter analytics; and application management, maintenance, and support services. International Business Machines Corporation’s Software segment offers middleware and operating systems software, such as WebSphere software to integrate and manage business processes; and information management software for database and enterprise content management, information integration, data governance, data warehousing and analytics, business analytics and intelligence, and redictive analytics.
This segment also provides Tivoli software for cloud and datacenter management, enterprise endpoint and mobile device management, asset and facilities management, storage management, and security systems; Rational software that supports software development; and Mobile Software for platform and application development, mobile security, and mobile device management. The company’s Systems and Technology segment provides computing power and storage solutions; and semiconductor technology, products, and packaging solutions.
