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Relative Performance Analysis: Ford Motor Company and Citigroup

a. Determine the five-year average return for each one of your selected securities.

b. Identify the industries of your six selected securities.

c. Determine the five-year average return in each of your industries.

d. Identify three additional stocks in each industry and determine the five-year average return for each security.

e. Compare your selected securities' performance to those in the same industry and to the industry average.

f. Based on your findings, determine whether or not changes should be made to your investment portfolio.

g. Attach supporting Microsoft Excel tables and graphs. Microsoft Excel spreadsheets must detail all calculations.

Solution Preview

Citigroup Inc. is today's pre-eminent financial services company, with some 200 million customer accounts in more than 100 countries. Major brand names under Citigroup's trademark red umbrella include Citi Cards, CitiFinancial, CitiMortgage, CitiInsurance, Primerica, Diners Club, The Citigroup Private Bank, and CitiCapital.

According to Forbes Global 2000, it is the world's biggest company and the most profitable financial services firm. Its formation was announced on April 7, 1998 through a merger of Citicorp and Travelers Group. It was the first US Company to combine banking with insurance underwriting since the Great Depression.

Business Divisions
Citigroup is organized into three major business groups - Global Consumer, Corporate and Investment Banking, and Global Wealth Management. In addition to two stand-alone businesses, Citigroup Asset Management* and Citigroup Alternative Investments.

The Global Consumer Group is comprised of three sub-divisions, Cards (credit cards), Consumer Finance, and Retail Banking. The credit card business on average delivers about 40% of the profits of this group. Citigroup is the largest provider of credit cards in the world, a position long held by Citicorp, and ...

Solution Summary

This response conducts a relative performance analysis for Ford and Citigroup. The solution will provide assistance in determining the average return of each industry and, based on these findings, determine whether changes should be made to one's investment portfolio.

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