This thesis examines how to implement financial statement analysis to form some investment ideas. Specifically, we are looking at strategies such as value (going long on stocks with a high F-score and short on stocks with a low F-score), and a momentum strategy going long on stocks that have an increase in return on equity (ROE). Findings suggest that we are able to generate excess returns even after controlling for risks and recommend that the understanding of financial statement can help investors to form investment decisions and give a competitive edge over other investors in the market. There are a few lessons that investors can learn from the findings of this thesis. Value investors should focus on value firms. Momentum investors should pursue an investment strategy among firms with an improvement in return on equity. They could also benefit from forming a portfolio based on both investment ideas, which should protect them from economic downturn and offer an interesting portfolio.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:664391 |
| Date | January 2014 |
| Creators | Husseini, Rayan |
| Publisher | University of Liverpool |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://livrepository.liverpool.ac.uk/2012319/ |
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