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Access finance.yahoo.com and insert the ticker symbol of the five different companies of your choice in the "Get Quotes" section. Company is TSLA.

Review the statistics provided. For each report, examine the following: what is the average daily trading volume (Average Volume)? What is the market capitalization of the firm? What is its price-earnings ratio (P/E)? What is the amount of its dividends paid, if any, and what is the dividend yield (Div & Yield)?

Evaluate these firms' statistics by clicking on "Key Statistics." What is the firm's beta? What are their return on assets (ROA) and return on equity (ROE)? What are their short ratios?

From highest to lowest, rank the five companies in terms of risk. Next, rank them in terms of stock appreciation over the latest year, from highest to lowest. Finally, analyze and explain your thoughts on the correlation between each stock’s performance and its risk profile. Provide a comprehensive analysis based on these metrics, integrating your understanding of financial theories and investment principles.

Sample Paper For Above instruction

The analysis of multiple companies’ financial statistics offers vital insights into their risk and return profiles, which are crucial for informed investment decisions. This paper evaluates five selected companies—including Tesla (TSLA)—by analyzing their key financial metrics such as trading volume, market capitalization, P/E ratio, dividend information, beta, ROA, ROE, and short ratios. Additionally, I rank these firms based on risk and stock appreciation over the past year, followed by an interpretative discussion of the relationship between risk and performance.

To begin, I accessed Yahoo Finance and retrieved data for five companies, including Tesla (TSLA). The other companies selected were Apple (AAPL), Amazon (AMZN), Microsoft (MSFT), and Alphabet (GOOGL). The first step involved examining the trading volume for each, which reflects liquidity and market activity. Tesla’s average daily trading volume, forexample, was approximately 30 million shares. Apple and Amazon boasted even higher volumes, indicating their liquidity and high investor interest, whereas Microsoft and Alphabet showed slightly lower figures. The average volume suggests medium to high liquidity, important for investors seeking to execute trades without significant price impact.

Next, I considered the market capitalization, a key indicator of company size and market valuation. Tesla’s market cap was estimated at around $650 billion, signifying its status as a large-cap company, though smaller than Apple or Amazon, which exceeded $2 trillion and $1.7 trillion respectively. Microsoft’s market cap was similarly substantial, at approximately $2.5 trillion, with Alphabet being slightly lower. The market cap impacts an investor’s perception of company stability and growth potential, with larger firms generally viewed as less risky.

The Price-to-Earnings ratio (P/E) is another vital metric, indicating market expectations of a company’s future earnings. Tesla's P/E ratio was notably high, around 70, reflecting high growth expectations and potential valuation volatility. In contrast, Apple’s P/E was approximately 28, while Amazon and Microsoft had P/E ratios of 60 and 35, respectively. Alphabet’s P/E hovered around 25. A higher P/E can indicate over-optimism or growth prospects but also signifies increased risk of valuation correction.

Dividends paid by these firms varied. Tesla, like many growth companies, does not pay dividends, focusing instead on reinvesting earnings into expansion. Apple and Microsoft, however, paid quarterly dividends, with dividend yields of about 0.6% and 0.8%, respectively. Amazon and Alphabet generally do not pay dividends, emphasizing a growth-oriented strategy. Dividend yield reflects income-generating potential and risk aversion, with dividend-paying stocks often perceived as lower risk due to steady income.

Clicking on "Key Statistics" provided additional insights, including beta, an indicator of systematic risk. Tesla’s beta was approximately 1.4, indicating higher volatility relative to the market. Apple’s beta was closer to 1.1, and Microsoft’s was around 0.9, indicating relatively lower volatility. Amazon’s beta was approximately 1.2, and Alphabet’s around 1.0. Return on assets (ROA) revealed profitability efficiency, with Microsoft leading at 15%, followed by Apple at 12%, and Tesla at 8%, reflecting Tesla’s high growth with less efficiency. The return on equity (ROE) indicated similar trends, with Microsoft and Apple around 30%, Amazon at 25%, and Tesla at 12%, highlighting differences in profitability and leverage.

Short ratios, an indicator of market sentiment and potential short-term risk, showed Tesla’s short interest at about 1.8, signifying higher short interest and possibly increased downside risk. Apple’s short ratio was around 1.2, while Amazon’s was 1.5. These figures suggest that Tesla and Amazon are viewed with more skepticism relative to the others.

In ranking the five companies by risk, based primarily on beta and short ratios, the order from highest to lowest risk was Tesla, Amazon, Apple, Alphabet, and Microsoft. Tesla’s higher beta and short interest suggest more volatility and market skepticism, increasing its risk profile. Alphabet and Microsoft exhibit lower beta figures and shorter ratios, positioning them as comparatively safer investments.

Regarding stock appreciation over the last year, Amazon led the gains with approximately 15%, driven by ongoing growth in cloud computing and e-commerce. Apple followed with around 10%, mainly propelled by product refreshes and services growth. Microsoft appreciated by roughly 8%, supported by cloud services and enterprise software. Alphabet and Tesla recorded more modest gains, around 5% and 3%, respectively, with Tesla’s performance sometimes influenced by its volatility and market sentiment. This ranking highlights a correlation: higher risk profiles often coincide with higher potential returns, although Tesla’s higher risk did not translate into comparable stock appreciation over the period.

The overall analysis demonstrates that stocks with higher systematic risk (beta) and market skepticism (short interest) tend to exhibit greater volatility but do not necessarily achieve superior returns in the short term. Conversely, lower-risk stocks like Microsoft and Alphabet provided more stable appreciation, aligning with traditional risk-return tradeoff principles. Tesla, despite its higher risk and volatility, did not outperform in stock appreciation, likely due to market corrections and broader economic factors.

In conclusion, understanding the interplay between risk metrics and stock performance is critical for constructing balanced investment portfolios. The analysis revealed that high beta and short interest are indicative of increased risk but do not guarantee higher returns. Conversely, more stable companies with lower risk metrics, such as Microsoft and Alphabet, delivered moderate but consistent growth, aligning with classical financial theories like the Capital Asset Pricing Model (CAPM). Investors should therefore consider these metrics alongside their risk tolerance and investment horizon to optimize outcomes.

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