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Financial Modeling With Decision Making - Essay Example

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Financial Modeling With Decision Making

The details of shares with above details are given in separate units for each company.
In the spread sheet used in this case the shares purchased are regarding the companies Glaxosmithkline, B.SKY.B, Busuiness Post Group, Abbey PLC, Barclays PLC, Galantas Gold Corp, Halfords Group PLC, and Rolls-Royce Group PLC. The trading has been started on February 1st and the dealings up to march 15th are given. In case of Glaxosmithkline, the trader earned a profit of 900 GBP. The returns from B.Sky.B group shares resulted in negative growth. The selling price of shares is 700 GBP lesser than the buying price. This resulted in 700 GBP of loss in trading the shares of that company. This dented the returns from previous investment also and decreased the net profit to 200 GBP. Apart from this the trader bought and sold the shares of business post on February 1st and February 15th. This resulted in a profit of 800 GBP. With this transaction, the net profit reached the mark of 1000 GBP by February 15th. After that the trader bought the shares of Abbey Plc on February 15th and sold on March 1st. This resulted in a profit of 40 GBP and this increased the gross profit by March 1 to 1040 GBP. After that in a gap of one month between 15th February and 15th march, the Barclay's shares are purchased for Rs. 39805.50 and sold for 34348.50. GBP. This resulted in a loss of 5457 GBP. With this transaction there is loss of 4457 GBP on the whole investment. After this transaction on march 1st the trader invested 7950 on Galantas gold corp. and sold them for 8520 GBP. This resulted in a profit of 300 GBP. This decreased the loss from the transactions to 4157 GBP. The Halfords group shares are purchased on 1st March for 31454.5 GBP and were sold on 15th march for 31433 GBP. This resulted in a loss of 21 GBP and increased the loss to 4178 GBP. The Rolls Royce group shares are bought for 24562.5 GBP on 1st March were sold for 23387 GBP on 15th march. This resulted in a loss of 1175.5 GBP of loss and the total loss increased to 5353 GBP. Apart from the investment in high interest account the loss on trades mentioned in spread sheet incurred a loss of 5353 GBP.
2. Analysis of Trading decisions
The first transaction used by the trader was with the shares of Glaxosmithkline numbering 10,000 and valued at 1,38,700 GBP. This resulted in a profit of 900 GBP. The decision of buying in February and selling in march is a good decision making when the single transaction is considered. This share can be retained and the sale of the shares in March is a short sighted decision as the share value has climbed up in the following months. As the company reported 6 percent increase of profit and closed the books with patent protection, there is every chance to earn more profits and increase the dividend distributed. This can result in increase of share price and the sale of the shares in March can be termed as a deal that has been done early than it should be done. The trader might have sold the shares of the company taking into consideration local market. As the company trades internationally and does business in US and other important countries of world, the share price of the company should be estimated accordingly. The drugs sold in US resulted in more profits for the company ...Show more

Summary

The investment out of 2, 50,000 GBP on shares has been recorded on spreadsheet and this enables the user to calculate the returns or losses through the transactions. The amount deposited in high interest account is not displayed in spread sheet to differentiate the money invested on shares and that is deposited in the high interest account…
Author : kcartwright
Financial Modeling With Decision Making essay example
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