NEW ERA UNIVERSITY

No. 9 Central Avenue, New Era, Quezon City

PROJECT IN FINANCE 7
Investment Analysis

Submitted to:

Prof. Mananghaya

Submitted by:

Arlyn A. Dagoy

MW 2:30-4:00pm
Rm. 413 3BF1

March 1, 2010 Monday

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 TABLE OF CONTENTS

A. INVESTMENT ANALYSIS 3
I. COMPANY PROFILE 3
a. NATURE OF THE BUSINESS 3
b. ORGANIZATION OF THE BUSINESS 3
c. VISION AND VALUES 4
d. PRODUCTS AND SERVICES 5
e. SUBSIDIARY 9
f. CORPORATE GOVERNANCE 10
g. STOCK EXCHANGE WHERE THE STOCK LISTED 15

II. ANALYSIS OF THE COMPANY 17

a. RATIO ANALYSIS 17
a.1. PROFITABILITY 17
a.2. LIQUIDITY 17
a.3. DEBT RATIO 17
a.4. MARKET RATIOS 18

B. VALUE OF THE STOCK 18

I. VALUE OF COMMON STOCKS (GORDON MODEL) 18
II. NET WORTH 18
III. PAR VALUE 20

C. COMPANY EARNINGS 21
I. EPS 21
II. P/E 21
III. ERR 22
a. GORDON MODELS 22
b. AVERAGE RETURN 22
c. HOLDING RETURN 22
IV. RETURNS 24
a. ROE 24
b. DIVIDEND INCOME 25
c. CAPITAL GAIN 25

D. CAPITAL BUDGETING ANALYSIS 26

I. INITIAL INVESTMENT 26
II. ANNUAL CASH FLOWS 26
III. PAYBACK PERIOD 35
IV. NET PRESENT VALUE (NPV) 35
V. PROFITABILITY INDEX (PI) 35
VI. INTERNAL RATE OF RETURN (IRR) 36

E. SUMMARY 37

F. CONCLUSIONS 38

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 MANULIFE FINANCIAL CORPORATION

A. INVESTMENT ANALYSIS

I. COMPANY PROFILE
a. NATURE OF THE BUSINESS
Manulife has been conducting business in the Philippines for over 100 years. One of the oldest life
insurance firms in the country, Manulife received its license in 1907 to operate in Manila, 20 years
after the company was first established in Toronto, Canada in 1887 by Sir John A. Macdonald, who
had concurrently held the post of Prime Minister of Canada. The first foreign company to list in the
Philippine Stock Exchange, Manulife is among the top life insurance companies in the country today.
A dedication to client service has paved the way for the Company's growth and increased financial
strength throughout the years.The Manufacturers Life Insurance Co. (Phils.), Inc. ("Manulife
Philippines") is a wholly owned subsidiary of The Manufacturers Life Insurance Company, the
insurance company of Manulife Financial Corporation (MFC). On August 24, 2000, Manulife received
approval from the Philippine Securities and Exchange Commission (SEC) to operate its pre-need
affiliate – Manulife Financial Plans, Inc. (MFP). MFP, a subsidiary of Manulife Philippines, is
committed to offering high quality pension and education plans to the public.

b. ORGANIZATION OF THE BUSINESS

Organizational Structure
From 1907 to 1998, Manulife Financial operated in the Philippines as a branch of The Manufacturers
Life Insurance Company. On January 1, 1999, Manulife's operations in the Philippines became
Manulife Philippines, a wholly owned subsidiary. This move established a more formidable and
permanent presence for Manulife's Philippine operations by conducting its business through a domestic
company. In addition, the incorporation of Manulife Philippines paved the way for the Company to
expand its presence and accelerate its growth to deliver a broad portfolio of products and services to
more people. Headquartered in Metro Manila, today Manulife Philippines reaches out to the different
parts of the archipelago using strategically located field offices and a team of more than 1,000 full time
professional agents. August 24, 2000, Manulife received approval from the Philippine Securities and
Exchange Commission (SEC) to operate its Pension & Education (P&E) affiliate - Manulife Financial
Plans, Inc. (MFP). MFP is committed to offering high quality P&E plans to the public. In the process,
it aims to extend the same valued service Manulife is known to provide. In 2007, the Philippine

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Insurance Commission (IC) and the Bangko Sentral ng Pilipinas (Central Bank) approved the operation
of a bancassurance joint venture company, Manulife China Bank Life Assurance Corporation. A
strategic bancassurance alliance between China Banking Corporation (China Bank), the Philippine's
first privately owned commercial bank, and Manulife Philippines, Manulife China Bank Life Assurance
Corporation offers a wide range of insurance products tailored to the needs of China Bank's depositors
and clients.
c. VISION AND VALUES

Manulife Financials vision is to be the most professional life insurance company in the world; providing
the very best financial protection and investment management services tailored to customers in every
market where we do business. With vision comes values. These values guide everything we do - from
strategic planning to day-to-day decision making, to the manner in which we treat our customer and
other stakeholders. These values are described by the acronym PRIDE:

P - Professionalism
We will be recognized as having the highest professional standards. Our employees and agents
will possess superior knowledge and skill, for the benefit of our customers.
R - Real Value to Customers
We are here to satisfy our customers. By providing the highest quality products, services, advice
and sustainable value, we will ensure our customers receive excellent solutions to meet their
individual needs.
I - Integrity
All of our dealings are characterized by the highest levels of honesty and fairness.
D- Demonstrated Financial Strength
Our customers depend on us to be here in the future to meet our financial promises. We earn this
faith by maintaining uncompromised claims paying ability, a healthy earnings stream, and
superior investment performance results, consistent with a prudent investment management
philosophy.
E - Employer of Choice
Our employees will determine our future success. In order to attract and retain the best and
brightest employees, we will invest in the development of our human resources and reward
superior performance.

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 d. PRODUCTS AND SERVICES
Individual Products
Group Products
Savings and/or Investments
Variable Life Funds
Fund Accumulation and/or Protection Coverage
Medical Protection
Pension & Education
Supplementary Benefits
Employee Security Program (ESP)
Employee Assistance for Small scale Enterprise (EASE)
Corporate Plan Right
Student Personal Accident
Credit Life

Individual Products
Manulife Philippines has developed a variety of innovative individual products to address the varied
financial protection needs of its customers.

 Savings and / or Investments

Affluence Builder is a regular pay variable life insurance product that offers you the
opportunity to earn market yield rates on a range of investment fund options, while
providing ample insurance protection.

Affluence & Affluence Max are single pay variable life products with several investment
options to match the investment requirements of the policyholder. These products allow
policy owners the flexibility to invest in any one or combination of separate investment
funds through a single premium and later, opt to switch investments partially or entirely
from one fund to another.

 Variable Life Funds

Our Company offers a variety of professionally managed investment fund options that one can choose
from in line with his/her financial objectives:
Affluence / Affluence Builder
 Peso Bond Fund seeks to achieve stable and long-term growth by investing in government
securities, high-quality corporate debt securities and/or in pooled fund/s that invest in these
securities and other liquid fixed income instruments.

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  Peso Equity Fund is designed to achieve long-term capital appreciation by investing in stocks
listed on the Philippine Stock Exchange, government securities and/or in pooled fund/s that
invest in these securities and other liquid fixed income instruments.
 Peso Stable Fund is used to achieve a stable and long-term growth by investing in government
securities, high-quality corporate debt securities, stocks listed on the Philippine Stock Exchange,
government securities and/or in pooled fund/s that invest in these securities and other liquid fixed
income instruments.
 US Dollar Bond Fund helps to achieve stable and long-term growth by investing in USD
denominated sovereign and corporate debt securities and/or in pooled fund/s that invest in these
securities and other liquid fixed income instruments.

Affluence Max
 Peso Secure Fund seeks to achieve a stable and long-term growth, with a target allocation of
approximately 70% in government securities and/or high-quality corporate debt securities and/or
pooled funds that invest in these securities and other liquid fixed income instruments.
 Peso Growth Fund seeks to achieve a long-term capital appreciation, with a target allocation of
approximately 70% in stocks listed on the Philippine Stock Exchange and/or pooled fund/s that
invest in these securities and other liquid instruments.
 Peso Diversified Value Fund seeks to achieve long-term capital growth, with a target allocation
of approximately 50% in government securities and /or high-quality corporate debt securities and
approximately 15% in stocks listed on the Philippine Stock Exchange and/or pooled fund/s that
invest in these securities and other liquid instruments.
 US Dollar Secure Fund seeks to achieve stable and long-term growth, with a target allocation of
approximately 80% in U.S. dollar–denominated sovereign and/or corporate debt securities and/or
pooled fund/s that invest in these securities and other liquid instruments.

 Fund Accumulation and / or Protection Coverage

Seasons is a participating whole life insurance product that provides substantial

benefits and returns for most of one's lifetime. Its key features include among others:
guaranteed coverage up to age 85; guaranteed cash benefit payout options, and a
guaranteed lump sum cash benefit which will be available at age 85.

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 Freedom is a participating endowment product that provides a variety of guaranteed
cash benefits over a 20-year period or up to the age of 65. These are made possible
through the guaranteed cash payout and guaranteed maturity benefit design features of
the product.

 Medical Protection

Adam and Eve are gender-specific participating whole life products that accumulate
cash values and earn dividends with coverage up to age 85. These are
comprehensive plans with the following core benefits: guaranteed life insurance
protection; guaranteed major disease benefits; guaranteed accident coverage, and
guaranteed premium waiver protection features.

CriticalCare is a critical illness insurance that provides a lump sum benefit payment
in the event that the insured person is diagnosed to have a critical illness condition.
It is a comprehensive medical protection policy with the following core features:
Guaranteed accelerated critical illness benefit; Guaranteed invasive surgical
treatment benefit; Guaranteed gender-specific illness benefit; Guaranteed 50%
return of premium living benefit, and Guaranteed life insurance protection.

 For Education and / or Retirement Pension and Education

New Minds is a participating juvenile anticipated endowment product that offers cash
payouts for a child's high school or college education expenses.

Plan Right* is a savings plan that will help address one's retirement fund requirements. It
is designed to provide guaranteed amount benefits upon maturity. It comes with a number
of protection features as well as other optional features.

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* - Plan Right is offered through Manulife Financial Plans, Inc. (MFP)

 Supplementary Benefits

In order to further customize our products to meet the financial protection requirements of our clients,
there are several supplemental benefit options that can be added to the existing product packages.
Life Insurance Supplementary Benefits
 Total Disability Waiver (TDW) waives premiums if the Insured becomes totally disabled before
age 60, and remains disabled for at least six (6) consecutive months; if total disability occurs
between ages 60-65, premiums will be waived up to age 65 only.
 Payor's Benefit (PB) waives premium to the earliest of the child's attainment of age 25, basic
policy's premium paying period or payor's attainment of age 60 upon death or disability of the
payor before age 60. After the waiver period and while the policy is in premium paying status,
disability coverage is automatically provided on the insured's life. Thus, the inception of
Disability waiver coverage on the life insured is always coincident with the termination of
coverage of the payor.
 Accidental Death Benefit (ADB) provides additional coverage if death occurs due to accident.
 Maccimax is a personal rider that provides benefits for the death, dismemberment, disability and
hospitalization resulting from accidents. It has four (4) plan types.
 Term Rider (TR) provides term insurance coverage during the coverage period, which is the
same as the base policy, or up to attained age 70, whichever is earlier. Premiums are level.
 Hospital income Benefit (HIB) provides fixed benefit allowance for each day (max of 1000 days)
of hospital confinement due to injury or illness: benefit is doubled if confinement is due to dread
disease and tripled if confined in the ICU.
Pre-Need Supplementary Benefits
 Accidental Death and Dismemberment (AD&D-PPP or AD&D-MatPd) pays a lump sum benefit
upon accidental death; and cash benefits upon accidental dismemberment of certain body parts.
Coverage may be up to the end of the paying period or maturity date (or planholder's attainment
of age 70, whichever is earlier).
 Term Life (TL) pays a benefit up to 200% of the basic plan's maturity value upon death of the
planholder. Benefit coverage under the TL rider will extend throughout the maturity period and
will expire at the earlier of the maturity date or planholder's 70th birthdate.
 Hospital Income Benefit (HIB) pays a fixed benefit allowance to the planholder for each day of
hospital confinement during the paying period or until planholder's age 60, whichever is earlier.

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  Critical Illness (CI) provides an amount up to 50% of the basic plan's maturity value or Php1
Million, whichever is less, upon the first diagnosis of 6 major illnesses during the paying period
-- Cancer, Kidney Failure, Coronary Artery Bypass Surgery, Heart Attack, Major Organ
Transplant and Stroke.
 Return of Payment (ROP CoTerm or ROP+5) provides an amount equal to 100% of the total
installments paid (but based on annual mode) shall be paid to the planholder at the end of the
maturity period or 5 years after the basic plan's maturity date.
Group Products

Manulife has a strong suite of Group products to address various life, disability and pension concerns of
employers, schools, financial institutions and associations.

 Employee Security Program (ESP)

A yearly renewable employee benefits program designed to cover the employees' life
insurance, disability, dismemberment and hospital income needs of groups with more
than 10 employees/members

 Employee Assistance for Small scale Enterprise (EASE)

A yearly renewable employee benefits program designed to cover the employees' life
insurance, disability, dismemberment and hospital income needs of groups with only 5 -
10 employees/members.

 Corporate Plan Right

A limited pay savings program designed for groups wanting pension privileges at a cost
effective rate

Student Personal Accident

A cost effective accident insurance and dismemberment program designed to cover students of
an educational institution

 Credit Life

e. SUBSIDIARIES
 John Hancock Financial is a loose term for a major United States insurance company which
existed, in various forms, from its founding on April 21, 1862, until its acquisition in 2004 by the

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 Canadian insurance company Manulife Financial. It was named in honor of John Hancock, a
prominent patriot. The company continues to operate as a wholly owned subsidiary of Manulife.
 Manulife Bank of Canada The Manulife Bank of Canada (Manulife Bank) is a Schedule I
federally chartered bank and a wholly owned subsidiary of the Manufacturer’s Life Insurance
Company of Canada (Manulife Financial). It was established on January 1, 1993, when Cabot
Trust Company, Huronia Trust Company and the Regional Trust Company were merged by
Manulife Financial. Its branch network was sold to the Laurentian Bank of Canada later in 1993
and it became Canada's first bank to sell its products through independent financial advisors. Its
products are designed to be integrated into a client’s overall financial plan and are supported by a
virtual bank experience.
 Maritime Life The Maritime Life Assurance Company was a Canadian insurance company
based in Halifax, Nova Scotia. It was founded in 1922 and in 2004 it became fully integrated
with Manulife Financial, with the Maritime Life brand being retired. In 2004 it employed 2700
employees. The Maritime Life headquarters were located in Armdale, Nova Scotia (part of
Halifax) near the head of the Northwest Arm. After the merger with Manulife Financial, the
signage of the buildings was changed and the facility became Manulife's central Halifax office.

f. CORPORATE GOVERNANCE
Management Team (Philippines)

Indren Naidoo President & CEO

Indren Naidoo is the President and Chief Executive Officer of Manulife Philippines. He joined the
company in December 2009.Prior to joining Manulife, he has worked in the Philippines for over 8 years as
Chief Financial Officer for 2 major multinational life insurance companies. His responsibilities in this
capacity included development of business strategy, product design and regular interaction with and
support of sales force channels, including Agency, Bancassurance and Alternative Channels. Prior to his
time in the Philippines, Mr. Naidoo worked in several countries in Asia in a similar capacity. Mr. Naidoo
also has over 11 years experience as a corporate banker with ANZ Banking Group in Australia. Mr. Naidoo
holds a Bachelor of Business (Accounting) & CPA and a Graduate Diploma in Computing from Monash

David N. Banks SVP & Chief Financial Officer

David Banks is the Senior Vice President and Chief Financial Officer of Manulife Philippines. He joined
the company in June 2003. Prior to joining Manulife, he was the Chief Financial Officer and Chief
Actuary of a large multinational life insurance company in Indonesia.Mr. Banks has 28 years of
experience in the life insurance industry particularly in Actuarial, Finance and Investments. Mr. Banks
holds a Bachelor of Science degree in Mathematics from Canterbury University in New Zealand. He is a
Fellow of the Institute of Actuaries of London (FIA).

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 John E. Curtis SVP & Chief Agency Officer
John E. Curtis is the Senior Vice President and Chief Agency Officer of Manulife Philippines. He joined
Manulife in February 2006.Mr. Curtis comes with almost 25 years of experience in the Life Assurance
Industry in the UK and in Asia. He has held a number of Senior roles within Agency, Broker and
Bancassurance markets. He worked his way up from a successful Agency person to various Senior
Leadership positions in Business Development, Recruitment, Marketing, and Wealth Management. He is
a fully qualified Financial Planner and a member of the Chartered Insurance Institute and The Personal
Finance Society.

Not In Philippines
Gail C. A. Cook-Bennett
Director Since: 1978

Gail Cook-Bennett is Chair of the Board. She assumed her role as Chair in October 2008 after having
served ten years as Chair of the Canada Pension Plan Investment Board (CPPIB). Dr. Cook-Bennett
holds a BA (Honours) from Carleton University, and a PhD (Economics) from the University of
Michigan. She is a Member of the Order of Canada, holds a Doctor of Laws Degree (honoris causa)
from Carleton University and is a Fellow of the Institute of Corporate Directors.
Donald A. Guloien
Director Since: 2009

Donald Guloien is President and Chief Executive Officer of Manulife Financial Corporation. He is also
a Manulife director and Chair of the Company’s Executive Committee. A 28-year company veteran, Mr.
Guloien has held leadership roles in both Manulife’s insurance and investment operations, and brings
significant experience leading global M&A and business development activity. Before taking on his
current role, he served as Senior Executive Vice President and Chief Investment Officer, where he was
recognized as a leading global investment executive.
Linda B. Bammann
Director Since: 2009
Linda Bammann was Executive Vice President, Deputy Chief Risk Officer for JPMorgan Chase & Co.
prior to retiring in 2005. She also held several positions with Bank One Corporation, including Executive
Vice President and Chief Risk Management Officer from 2001 until its acquisition by JPMorgan in
2004. Prior to that time, Ms. Bammann was a Managing Director with UBS Warburg from 1992 to 2000.
She holds a BSC from Stanford University and an MA from University of Michigan. Ms. Bammann
currently serves as a director of the Federal Home Loan Mortgage Corporation and was a board member
of the Risk Management Association and chairperson of the Loan Syndications and Trading Association.

John M. Cassaday
Director Since: 1993

John Cassaday is President and Chief Executive Officer of Corus Entertainment Inc., a position he has
held since 1999. Corus is a Canadian leader in specialty television and radio and is a global leader in the
production of children’s animation. Mr. Cassaday has also been Executive Vice President of Shaw
Communications, President and Chief Executive Officer of Shaw Media, Star Choice Communications
and of CTV Television Network. Mr. Cassaday has an MBA (Dean’s List) from the Rotman School of
Management at the University of Toronto. Mr. Cassaday is also active in community affairs, principally
with St. Michael’s Hospital.

Lino J. Celeste
Director Since: 1994 Lino Celeste is past Chairman of Aliant Inc., the merged Atlantic provinces telephone
companies. Prior to assuming the Chairmanship, Mr. Celeste was President and Chief Executive Officer of
New Brunswick Telephone Company Limited. Mr. Celeste holds a P.Eng. (Electrical Engineering) from the
University of New Brunswick. He also served as a director of New Brunswick Electric Power Commission
and as Chairman of the Greater Saint John Community Foundation, a charitable organization.

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Thomas P. d’Aquino
Director Since: 2005
Thomas d’Aquino is Chief Executive and President of the Canadian Council of Chief Executives
(“CCCE”), a research and advocacy group composed of 150 chief executives of Canada’s leading
enterprises. Mr. d’Aquino holds a BA from the University of British Columbia, an LLB from Queen’s
University and the University of British Columbia, an LLM from the University of London and Doctor of
Laws honorary degree from Queen’s University and Wilfrid Laurier University. Mr. d’Aquino has served as
Special Assistant to the Prime Minister of Canada and a Professor Adjunct on the law of international
business transactions. As well as CEO, he is the CCCE’s chief policy officer and strategist responsible for
fiscal, taxation, competitiveness, international trade and environmental issues. He is currently Chair of
Lawrence National Centre for Policy and Management at the Richard Ivey School of Business and he also
chairs The National Gallery of Canada Foundation.

Richard B. DeWolfe
Director Since: 2004

Richard DeWolfe is Managing Partner of DeWolfe & Company, LLC, a real estate management and
investment consulting firm. Mr. DeWolfe holds a BAS, Marketing and Finance from Boston University. He
is also a director of The Boston Foundation; Trustee of Boston University; Trustee of the 17136 Marine
Biological Laboratory; and an honorary director of The Boston Center for Community and Justice. He was
formerly Chairman and CEO of The DeWolfe Companies, Inc., the largest homeownership organization in
New England, which was previously listed on the American Stock Exchange and acquired by Cendant
Corporation in 2002

Robert E. Dineen, Jr.

Director Since: 1999

Robert Dineen was Of Counsel to Shearman & Sterling LLP, a leading international law firm
headquartered in New York where he was a partner from 1974 until his retirement in December 2005. Mr.
Dineen holds a BA from Brown University and an LLB from Syracuse University. Mr. Dineen led several
of the firm’s corporate groups, including groups in Latin America and Asia and its project finance work
worldwide. Mr. Dineen has extensive experience in public finance transactions in the oil and gas pipeline
business, and as a specialist in U.S. and international private banking and financial transactions.

Pierre Y. Ducros
Director Since: 1999

Pierre Ducros is President of P. Ducros & Associates Inc. in Montréal. Previously, he was Chairman,
President and Chief Executive Officer of DMR Group Inc. which he co-founded in 1973, and Vice-
Chairman of the Task Force on The Future of The Canadian Financial Services Sector (MacKay Task
Force). Mr. Ducros holds a BA from the Université de Paris at Collège Stanislas in Montréal and a B.Eng.
(Communications) from McGill University.

Scott M. Hand
Director Since: 2007

Scott Hand was the Chairman and Chief Executive Officer of Inco Limited (“Inco”) from April 2002 until
he retired in January 2007. Prior to that, Mr. Hand was the President of Inco and held positions in Strategic
Planning, Business Development and Law. Inco has been a major global Canadian-based resources
enterprise and a leading producer and marketer of nickel and other metals. Mr. Hand serves on the boards of
Juno Special Situations Corporation (mining resource investment) and Boyd Technologies LLC (paper non-
woven materials). He is also a member of the board of directors of the World Wildlife Fund Canada. Mr.
Hand received a BA from Hamilton College and a JD from Cornell University.

Robert J. Harding
Director Since: 2008

Robert Harding is Chairman of Brookfield Asset Management Inc., a position he has held since 1997. He
has held various executive positions with Brookfield (and its predecessor companies) since 1984, including
Chief Financial Officer and President and Chief Executive Officer. In his role as Chairman, Mr. Harding
represents Brookfield’s interests on the boards of its various affiliates as a director and Chairman of
Norbord Inc. and as a director of Fraser Papers Inc. and Western Forest Products Limited. Brookfield Asset
Management is a specialist asset management company focused on property, power and other infrastructure
assets. Mr. Harding holds a B. Mathematics and a Doctor of Laws honorary degree from the University of
Waterloo and is a Fellow of the Institute of Chartered Accountants.

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Luther S. Helmes
Director Since: 2007

Luther Helms has been the Managing Director of Sonata Capital Group (“Sonata”) since 2000. Sonata is a
privately-owned registered investment advisory firm. Mr. Helms has extensive banking and financial
services experience, holding various positions at Bank of America Corporation, including Vice Chairman
from 1993-1998 and was the Vice Chairman of KeyBank from 1998-2000. Mr. Helms was a director of
Lifelock, an identity theft protection company. Mr. Helms has an MBA from the University of Santa Clara
and a BA in History and Economics from the University of Arizona.
Thomas E. Kierans
Director Since: 1990

Thomas Kierans is Chair of Council and Vice President of the Social Sciences and Humanities Research
Council. Mr. Kierans holds a BA (Honours) from McGill University and an MBA (Finance), Dean’s
Honours List, from the University of Chicago. Mr. Kierans has also been Chairman of The Canadian
Journalism Foundation, Chairman of CSI-Global Education Inc., Chairman of the Canadian Institute for
Advanced Research, Chairman of the Board of the Toronto International Leadership Centre for Financial
Sector Supervisors, Chairman of Moore Corporation Limited, Chairman of Petro-Canada, President and
Chief Executive Officer of the C.D. Howe Institute and President of McLeod Young Weir Limited (later
ScotiaMcLeod Inc.).
Lorna R. Marsden
Director Since: 1995

Lorna Marsden is President Emerita and Professor of York University. Prior to her retirement in May
2007, she was President and Vice-Chancellor and a member of the Board of Governors of York University.
Dr. Marsden was President and Vice-Chancellor of Wilfrid Laurier University and served as a member of
the Senate of Canada. Dr. Marsden holds a BA from the University of Toronto and a PhD from Princeton
University. She is a recipient of honorary Doctor of Laws degrees from the University of New Brunswick,
the University of Winnipeg, Queen’s University and the University of Toronto. Dr. Marsden serves as a
director of several private and non-profit organizations. Dr. Marsden was appointed to the Order of Ontario
in 2009.

John R.V. Palmer

Director Since: 2009
John R.V. Palmer is Chairman and a founding member of the Toronto Centre, an organization focused on
leadership in financial supervision. Mr. Palmer was the Superintendent of Financial Institutions Canada
from 1994 - 2001 following an illustrious career at KPMG LLP (Canada) where he was Managing Partner
and Deputy Chairman. He was also the Deputy Managing Director of the Monetary Authority of Singapore
and has advised other regulators including the Australian Prudential Regulation Authority. He is a chartered
accountant and holds a Bachelor of Arts from the University of British Columbia.

Hugh W. Sloan, Jr.

Director Since: 1985

Hugh Sloan is Retired Deputy Chairman of Woodbridge Foam Corporation, a manufacturer of automobile
parts, where he held various management positions for more than 20 years. Mr. Sloan holds a BA
(Honours) from Princeton University. Mr. Sloan serves as a director of a number of Canadian and American
corporate, community and charitable organizations. He is a former Staff Assistant to President Richard
Nixon and a former Trustee of Princeton University.

Gordon G. Thiessen
Director Since: 2002

Gordon Thiessen joined the Board following a distinguished career with the Bank of Canada that began in
1963 and culminated in a seven-year term as the Bank’s Governor. He was Chairman of the Canadian
Public Accountability Board, the oversight body for the auditing profession in Canada from 2002 to 2008.
Mr. Thiessen holds a BA (Honours) and an MA from the University of Saskatchewan and a PhD from the
London School of Economics. Mr. Thiessen also serves as a director of the Institute for Researc

13
MANULIFE FINANCIAL CORPORATION

BOARD OF DIRECTORS
As of November 04, 2009

Luther S. Helms
John M. Cassaday
Lino J. Celeste Thomas E. Kierans
Gail C. A. Cook-Bennett Lorna R. Marsden
Dominic D`Alessandro Hugh W. Sloan, Jr.
Thomas P. d`Aquino Gordon G. Thiessen
Richard B. DeWolfe Scott M. Hand
Robert E. Dineen, Jr. Robert J. Harding
Pierre Y. Ducros Linda Bammann
John Ralph Vernon Palmer

OFFICERS
As of June 22, 2009

President & Chief Executive Officer Donald Arthur Guloien

Senior Executive Vice President, Business Dev't & General Jean-Paul (J-P) Bisnaire
Counsel
Senior Executive Vice President & General Manager, Asia & Robert A. Cook
Japan Division
Chief Operating Officer John D. DesPrez III
Senior Executive Vice President & General Manager Canada Paul Lawrence Rooney
Senior Executive Vice President and Chief Financial Officer Michael W. Bell
Executive Vice President & Chief Actuary Simon R. Curtis
Vice President & Corporate Secretary Angela Shaffer

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g. STOCK EXCHANGE WHERE THE STOCK LISTED
NYSE (New York Stock Exchange) Manulife Financial Corporation Symbol: MFC
Website: http://www.nyse.com/

TSX (Toronto Stock Exchange) Manulife Financial Corporation Symbol: MFC

Website: http://www.tmx.com/

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SEHK (Stock Exchange of Hong Kong) Manulife Financial Corporation Symbol: 945
Website: http://www.hkex.com.hk/index.htm

PSE (Philippine Stock Exchange) Manulife Financial Corporation Symbol: MFC

Website: http://www.pse.com.ph/

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II. ANALYSIS OF THE COMPANY
a. RATIO ANALYSIS
a.1. PROFITABILITY
Ratios 2008 2007 2006 2005 2004
Net Profit Margin .0157 .12 .116 .100 .0945
Return on Equity 2% 18.4% 16.8% 14.1% 13.7%
Return on Assets 0.002449 0.024379 0.021405 0.018343 0.0138401

Analysis:
In net profit margin of MFC, as we can see from 2004 to 2007 it increases. The higher the ratio the
better. But in 2008, it declined. They become not so efficient for the year 2008. Earnings in 2008 were
negatively impacted by over $3.7 billion of accruals due to the unprecedented declines in worldwide
equity markets and by almost $500 million in provisions and reserve increases for credit defaults for
downgrades, primarily in respect of exposures to the financial sector. Consistent with the decline in net
income, Return on Equity and return on assets was considerably lower than the other year level.

a.2. LIQUIDITY
Ratios 2008 2007 2006 2005 2004
Current Ratio 1.15 1.16 1.16 1.15 1.15

Analysis:
The current ratio can give a sense of the efficiency of a company's operating cycle or its ability to
turn its product into cash. The higher the current ratio, the more capable the company is of paying its
obligations. In this case, current ratio is greater than one it means that the company is more likely to
meet its liabilities which fall due in the next 12 months.

a.3. DEBT RATIO

Ratios 2008 2007 2006 2005 2004
Debt Ratio .87 .86 .86 .87 .87
LTD Equity Ratio .01748 .010314 .01644 .013451 .01600

Analysis:
Debt ratio can help investors determine a company's level of risk. A debt ratio of greater than 1 indicates
that a company has more debt than assets; meanwhile, a debt ratio of less than 1, just like in this
company, indicates that a company has more assets than debt. The measure or figures above gives an
idea to the leverage of the company along with the potential risks the company faces in terms of its debt-
load.

17
 a.4. MARKET RATIOS
Ratios 2008 2007 2006 2005 2004
Diluted Earnings Per .32 2.78 2.51 2.03 1.81
Share
Payout Ratio 307% 31% 29% 28% 27%
Dividend Yield 2.2% 1.9% 1.9% 1.9% 1.8%

Analysis:
Through the use of market ratios, we can indicates the scenario, what the companies are doing with their
earnings and how much a company pays out in dividends each year relative to its share price. Year 2008
was not a good year for this company in terms of payout ratio. Compare to other years, 2008 has the
highest payout ratio having of 307% meaning to say the dividend is not more secure. A very low payout
ratio indicates that a company is primarily focused on retaining its earnings rather than paying out
dividends (See Year 2004 to 2007). The payout ratio also indicates how well earnings support the
dividend payments: the lower the ratio, the more secure the dividend because smaller dividends are
easier to pay out than larger dividends. In terms of dividend yield, which is used to measure how much
cash flow you are getting for each dollar invested in an equity position, 2008 is a good year having of
2.2%.The higher, the better.

B. VALUE OF THE STOCK

I. VALUE OF COMMON STOCKS (GORDON MODEL)

Dividend Price
Vcs = +
( 1 + RRR ) ( 1 + RRR )

= .13 770
+
( 1 + .0522 ) ( 1 + .0522 )

= .123550655 + 731.800038
= 731.93 or 732
II. NET WORTH
Net Worth = Assets – Liabilities
= $ 205,140,000 000.00 - 176,233,000 000.00
Net Worth (2009) = 28,907,000 000.00

18
Consolidated Balance Sheets
(Canadian $ in millions, unaudited)
As at December 31
1 1 Assets 2009 2008
Invested assets
Cash and short-term securities $ 18,780 $ 17,269
Securities
Bonds 85,107 83,148
Stocks 9,688 8,240
Loans
Mortgages 30,699 30,963
Private placements 22,912 25,705
Policy loans 6,609 7,533
Bank loans 2,457 2,384
Real estate 5,897 6,345
Other investments 5,321 5,914
Total invested assets $ 187,470 $ 187,501
Other assets
Accrued investment income $ 1,540 $ 1,760
Outstanding premiums 812 799
Goodwill 7,122 7,929
Intangible assets 2,005 2,115
Derivatives 2,680 7,883
Miscellaneous 3,511 3,038
Total other assets $ 17,670 $ 23,524
Total assets $ 205,140 $ 211,025
Segregated fund’s net assets $ 191,741 $ 165,380

Liabilities and equity

Policy liabilities $ 141,687 $ 146,344
Deferred realized net gains 108 127
Bank deposits 14,735 12,210
Consumer notes 1,291 1,876
Long-term debt 3,308 3,689
Future income tax liability 1,178 1,794
Derivatives 2,656 6,389
Other liabilities 6,487 7,508
$ 171,450 $ 179,937

19
 Liabilities for preferred shares and capital
Instruments 4,581 3,674
Non-controlling interest in subsidiaries 202 217
Equity
Participating policyholders' equity 80 62
Shareholders' equity
Preferred shares 1,422 638
Common shares 18,937 16,157
Contributed surplus 182 160
Retained earnings 12,870 12,796
Accumulated other comprehensive loss (4,584) (2,616)
Total equity $ 28,907 $ 27,197
Total liabilities and equity $ 205,140 $ 211,025
Segregated funds net liabilities $ 191,741 $ 165,380

III. PAR VALUE

As of FRI FEB 19, 2010 12:10:01 PM
ISIN CA56501R1064 Board Lot 10
Listing Date 27-Sep-1999 Par Value 0.00
Status Open Listed Shares 1,879,737,833
Last Sale 0.00 Outstanding Shares 1,757,741,010
Previous Close (18-Feb-2010) 770.00 Free Float Level 1.2%
Change 0.00 Market Capitalization 1,353,460,577,700
%Change 0.00 Foreign Limit (Percent) No Limit
Open 0.00 YearEnd EPS (End: 31-Dec-2008) 13.375712
Interim EPS (Period: 9mos Sep
High 0.00 12.32418164
2009)
Low 0.00 Current P/E Ratio 0.00
Volume 0 52 Week High 1,100.00
Value 0.00 52 Week Low 400.00
Best Bid Volume Best Bid Price Best Offer Volume Best Offer Price
0 0.00 0 0.00
0 0.00 0 0.00

20
 C. COMPANY EARNINGS

I. EARNINGS PER SHARE

FINANCIAL HIGHLIGHTS
(unaudited)

Quarterly Results Year Ended

4Q09 3Q09 4Q08 2009 2008
Net Income (Loss) Attributed to Shareholders (millions) 868 (172) (1,870) 1,402 517
Net Income (Loss) Available to Common Shareholders 848 (193) (1,878) 1,338 487
(C$ millions)
Diluted Earnings (Loss) per Common Share 0.51 (0.12) (1.24) 0.82 0.32
Return on Common Shareholders’ Equity 13.1 (3.0) (28.9) 5.2 2.0
(%, annualized)
Premiums & Deposits (millions) 16,535 16,238 19,493 71,270 75,750
Funds under Management (billions) 439.6 436.6 404.5 439.6 404.5
Capital (billions) 33.2 30.7 30.9 33.2 30.9

II. Price-Earnings Ratio P/E

A valuation ratio of a company's current share price compared to its per-share earnings.

Calculated as:
= From PSE February 16, 2010 Php. 700.00
0.82
P/E = 853.66
The company was currently trading at a multiple (P/E) of 853.66, the interpretation is that an
investor is willing to pay 853.66 for 1 of current earnings. A higher P/E ratio means that
investors are paying more for each unit of net income, so the stock is more expensive compared
to one with lower P/E ratio.

21
III. EXPECTED RATE OF RETURN ERR
a. GORDON MODELS

Expected return or Required Rate of Return

The expected return (or required rate of return for investors/cut-off rate) can be calculated with the

"dividend capitalization model", which is

Growth Rate = (Return on Equity) x (Retention Rate)

Retention Rate = 1- Dividend Pay Out Ratio
Dividend Pay Out Ratio (DPR) = Dividends/Net Income

Therefore;

ERR = Dividend Payment Per Share + [ ROE x (1- DPR ) ]

Price Market

ERR = .13
+ [ 5.2% x (1 - .000000097 ) ]
770
ERR = 5.22%

b. AVERAGE RETURN
Sum of HPR = -.086058 Therefore -.086058 / 27
Total HPR = 27 Average Return = -.32%

c. HOLDING RETURN
Date Close Holding Period Return
February 16, 2010 700 -.71%
February 12, 2010 705
February 12, 2010 705 .7142%
February 09, 2010 700
February 09, 2010 700 -4.11%
February 08, 2010 730
February 08, 2010 730 -2.67%
February 03, 2010 750
February 03, 2010 750 0%
January 29, 2010 750

22
 January 29, 2010 750 1.35%
January 28, 2010 740
January 28, 2010 740 -5.13%
January 25, 2010 780
January 25, 2010 780 0%
January 22, 2010 780
January 22, 2010 780 -4.88%
January 15, 2010 820
January 15, 2010 820 0%
January 14, 2010 820
January 08, 2010 820 1.23%
January 07, 2010 810
January 07, 2010 810 1.25%
January 06, 2010 800
January 06, 2010 800 1.27%
January 05, 2010 790
January 05, 2010 790 2.60%
January 04, 2010 770
January 04, 2010 770 0%
December 29, 2009 770
December 29, 2009 770 0%
December 28, 2009 770
December 28, 2009 770 -3.75%
December 23, 2009 800
December 23, 2009 800 5.26%
December 22, 2009 760
December 17, 2009 750 2.74%
December 16, 2009 730
December 16, 2009 730 1.39%
December 15, 2009 720
December 15, 2009 720 2.86%
December 14, 2009 700
December 09, 2009 700 -2.78%
December 08, 2009 720
December 08, 2009 720 2.86
December 07, 2009 700
December 07, 2009 700 -3.45%
December 04, 2009 725
December 04, 2009 725 0%
December 03, 2009 725
December 03, 2009 725 -3.33%
December 02, 2009 750
December 02, 2009 750 -1.32%
December 01, 2009 760
Total HPR = 27 Sum -.086058
0r
-8.61%

Average -.32%

23
IV. RETURNS
a. ROE 1338 / 25 845 = 5.17% or 5.2%

Return on Equity Quarterly Results Year Ended

$ millions

4Q09 3Q09 4Q08 2009 2008

Net Income (loss) Available to Common
Shareholders per Consolidated
Statement of Operations 848 (193) (1,878) 1,338 487

Opening Total Equity Available to

Common Shareholders 24,812 26,173 24,236 26,496 23,370
Closing Total Equity Available to
Common Shareholders 27,405 24,812 26,496 27,405 26,496

*Weighted Average Total Equity Available to

Common Shareholders 26,108 25,493 25,366 25,845 24,364

Opening Accumulated other comprehensive income

(loss) on available for sale securities and cash
flow hedges per Consolidated Balance Sheets 442 111 (87) (846) 1,291

Closing Accumulated other comprehensive income

(loss) on available for sale securities and cash
flow hedges per Consolidated Balance Sheets 564 442 (846) 564 (846)

*Adjustment for Average (503) (277) 466 126 (352)

Weighted Average Total Equity Available to
Common Shareholders
Excluding Average AOCI 25,605 25,216 25,833 25,971 24,012

*ROE based on Weighted Average Total Equity

Available to Common
Shareholders (annualized) 12.9% (3.0)% (29.4)% 5.2% 2.0%
*ROE based on Weighted Average Total Equity
Available to Common
Shareholders Excluding Average AOCI
(annualized) 13.1% (3.0)% (28.9)% 5.2% 2.0%

24
b. DIVIDEND INCOME
Corporation’s Board of Directors today declared a quarterly shareholders’ dividend of $0.13
per share on the common shares of Manulife Financial Corporation (the “Company”),
payable on and after March 19, 2010 to shareholders of record at the close of business on
February 24, 2010.The Board also declared dividends on the following non-cumulative
preferred shares, payable on or after March 19, 2010 to shareholders of record at the close of
business on February 24, 2010.

• Class A Shares Series 1 - $0.25625 per share

• Class A Shares Series 2 - $0.29063 per share
• Class A Shares Series 3 - $0.28125 per share
• Class A Shares Series 4 - $0.4125 per share
• Class 1 Shares Series 1 - $0.35 per share

In respect of the Company’s March 19, 2010 common share dividend payment date, the
Board has decided that the Company will issue common shares in connection with the
reinvestment of dividends and optional cash purchases pursuant to the Company’s Canadian
Dividend Reinvestment and Share Purchase Plan and its U.S. Dividend Reinvestment and
Share Purchase Plan. The price of common shares purchased with reinvested dividends will
be reduced by a three (3) per cent discount from the market price, as determined pursuant to
the applicable plan.

C. CAPITAL GAIN ( of the company to their investments )

Total funds under management as at December 31, 2009 were $440 billion, a 22 per cent
increase over the prior year end, on a constant currency basis as policyholder cash in-flows
in excess of out-flows of $21 billion and investment income of $63 billion more than
offset unfavorable currency movements of $55 billion over the last twelve months.
Continuing to capitalize on strategic opportunities, Asia and Japan Division announced a
49 per cent investment in a fund management company in China. Manulife will acquire
Fortis Bank SA/NV’s ownership in ABN AMRO TEDA Fund Management Co., Ltd. This
acquisition, subject to regulatory approvals, will provide Manulife with an immediate,
sizable entry point into China’s rapidly growing wealth management industry, with US$4.4
billion in assets under management at year end.

25
 D. CAPITAL BUDGETING ANALYSIS

I. INITIAL INVESTMENT
December 15, 2009 (date purchased the stock)

**Note: The student did not use the date November 16, 2009 required by the Adviser because the stock was purchased and
record in the student’s portfolio stated above.

Company Name Number of Stocks Market Price Market Value Gain/Loss

Manulife Financial 10 720.00 72, 000.00 -2,000.00
Corporation

January 16, 2010

Company Name Number of Stocks Market Price Market Value Gain/Loss

Manulife Financial 100 700.00 70,000.00 -4,000.00
Corporation

Capital Gain Current Income Total Return

-2000 .13x100= 13 -1987
Div. per share x ( Current Income +
no. of shares in Capital Gain )
portfolio

II. ANNUAL CASH FLOWS

File Names: 2008 AnnualReport.pdf, 2007 AnnualReport.pdf, 2006 AnnualReport.pdf, 2005
AnnualReport.pdf, 2004 AnnualReport.pdf or simply go to
URL: http://www.manulife.com/public/investor/index/0,,lang=en&navId=640002,00.html

26
Condensed Consolidating Statement of Cash Flows

Year 2008 and 2007

Location/File name: 2008 AnnualReport.pdf

Page (on paper): 102 to103

27
Condensed Consolidating Statement of Cash Flows

Year 2008 and 2007

Location/File name: 2008 AnnualReport.pdf

Page (on paper): 102 to103

28
Condensed Consolidating Statement of Cash Flows

Year 2006

Location/File name: 2006 AnnualReport.pdf

Page (on paper): 91 to 92

29
Condensed Consolidating Statement of Cash Flows

Year 2006

Location/File name: 2006 AnnualReport.pdf

Page (on paper): 91 to 92

30
Condensed Consolidating Statement of Cash Flows

Year 2005 and 2004

Location/File name: 2005 AnnualReport.pdf

Page (on paper): 136 to 139

31
Condensed Consolidating Statement of Cash Flows

Year 2005 and 2004

Location/File name: 2005 AnnualReport.pdf

Page (on paper): 136 to 139

32
Condensed Consolidating Statement of Cash Flows

Year 2005 and 2004

Location/File name: 2005 AnnualReport.pdf

Page (on paper): 136 to 139

33
Condensed Consolidating Statement of Cash Flows

Year 2005 and 2004

Location/File name: 2005 AnnualReport.pdf

Page (on paper): 136 to 139

34
III. PAYBACK PERIOD
Payback Period
Year Cash Flow Initial Cash Outlay
RRR= 5.22% 18,780
(in millions) (in millions)
1 8,223 (10,557)
2 8,943 (1,614)
3 10,384 8,770
4 11,987
5 16,880

Payback Period = 2 years + 8,770

10,384
= 2.84 < 5 years; Accept

Discounted Payback Period

Year Free Cash Flows PVIF(Appendix Discounted Free Cumulative
C) Cash Flows Discounted
(in millions) (in millions) FCF
(in millions)
0 18,780 (18,780)
1 8,223 .950 7,811.85 (10,968.15)
2 8,943 .903 8,075.53 (2,892.62)
3 10,384 .858 8,909.47 6,016.85
4 11,987 .816 9,781.39
5 16,880 .775 13,082
SUM 47,660.24

Discounted Payback Period = 2 years + 2,892.62

8,909.47
= 2.32 < 5 years; Accept

IV. NET PRESENT VALUE (NPV)

NPV = 6,016.85 (in millions) Accept
It is an indicator of how much value an investment or project adds to the firm.

V. PROFITABILITY INDEX (PI)

Profitability Index = Total Free Cash Flows 47,660.24 = 2.5378 Accept
Initial Cash Flow 18,780

35
VI. INTERNAL RATE OF RETURN (IRR)

Discount Rate Present Value Difference Difference

44% 19,014,793,940.00 234,793,940
Initial Outlay 18,780,000,000.00 338,951,060
45% 18,675,842,880.00

Try i = 44%
Year Free Cash Flows PV Factor at 44 % Present Value
1 8,223,000,000 .694444444 5,710,416,663
2 8,943,000,000 .482253086 4,312,789,348
3 10,384,000,000 .334897976 3,477,580,583
4 11,987,000,000 .232568039 2,787,793,083
5 16,880,000,000 .161505582 2,726,214,224
Sum 19,014,793,940
Initial Outlay 18,780,000,000.00

Try i = 45%
Year Free Cash Flows PV Factor at 45 % Present Value
1 8,223,000,000 .689655172 5,671,034,479
2 8,943,000,000 .475624256 4,253,507,721
3 10,384,000,000 .328016728 3,406,125,704
4 11,987,000,000 .226218433 2,711,680,365
5 16,880,000,000 .156012712 2,633,494,594
Sum 18,675,842,860
Initial Outlay 18,780,000,000.00

Therefore:

IRR = 44% + 234,793,940 x ( 45% - 44% )

338,951,060

IRR = 44% + .692707495 (1%)

IRR = 44% + .006927074
IRR = .446927075
IRR = 44.70% Accept

36
 E. SUMMARY

Manulife Financial Corporation was first established in Canada. It is one of the oldest
life insurance firms in the Philippines and first foreign company to list in the PSE. Manulife received
approval from the Philippine Securities and Exchange Commission (SEC) to operate its Pension &
Education (P&E) affiliate - Manulife Financial Plans, Inc. (MFP). MFP is committed to offering high
quality P&E plans to the public. In the process, it aims to extend the same valued service Manulife is
known to provide. Manulife Philippines has developed a variety of innovative individual and group
products to address the varied financial protection needs of its customers. Overall analysis for MFC
for the year 2004 to 2008, they are maintaining the financial strength in a time of crisis. From an
operating perspective, 2008 was a very strong year for Manulife. In 2009, they have good investments
results in the face of challenging markets. Ratios for five years were computed together with analysis.
Value of the stock was computed also through the use of Gordon model. Net worth and par value were
also presented. Company earnings was determined through the Earnings per share, Price earnings ratio
and ERR. While the ROE Dividend income and capital gain is put under the classification of return. In
this work, the researcher made a Capital Budgeting Analysis. It includes here the researcher’s initial
investment in MFC recorded in PSE’s portfolio. Relating to the PSE portfolio, the student has a loss of
2000.00 in December 15 last year and loss of 4000.00 in January 16, 2010. In between the given time,
the stock was gaining. The price of a stock fluctuates fundamentally due to the theory of supply and
demand. Like all commodities in the market. Since it is fluctuating, we can’t really tell if until the end
of a given time it can gain or what return we can have. Researcher also calculated the payback period,
net present value, profitability index and internal rate of return. For additional information, the
researcher includes the five year cash flows from year 2004 to 2008.

37
 F. CONCLUSIONS

Manulife Financial Corporation is under the classification of financial services in Stock

Exchange. You can buy their stocks in different stock exchange-Toronto, New York, Hongkong and in
Philippines. A stock is under of investments. As we relate the investments of the researcher to the
portfolio in PSE, MFC was NOT GAINING. It has a loss in December 15, 2009 of 2000.00 and loss in
January 16, 2010 of 4000 having the same volume of 100. Researcher concludes that you cannot sell
your stocks if it’s having a loss. No one will be interested in a stock which is not gaining. As long as
your stock is gaining, sell it as possible as you can for you to earn. Concerning about the project if
will be accepted, we must identify it first. In order for us to make a decision, researcher conclude that
the process of capital budgeting is useful to involve with respect to investments in fixed assets. In
given example in page 33, the project is accepted through the use of payback period even though it is
not incorporating the time value of money. In discounted payback period, it is also accepted
considering the time value of money. The same decision also for NPV, Profitability index and IRR.

Researcher also concludes that to make such decisions, we have to use the free cash
flows, consider the time value of money, and be consistent with the firm’s goal of shareholder wealth
maximization

The purpose of this work is to teach the readers and researchers to analyze the
company where the stocks invested in a given portfolio through the use of ratio analysis, value of
common stock, company earnings, returns, and capital budgeting analysis. It is very important to read
this kind of particular piece especially to the finance students. Students can use this work as a guide in
how to analyze investments and to make decisions whether to accept or not the projects . Computing
and getting the value is not enough. Without analysis of the performance of the company, we cannot
determine if we need to buy or sell stocks. An investor need to be smart enough and keep on updates
and look also for the past performances of the company so the investor can make a financial decision
corresponds to the investments.

38