RTSWS GOLD STUDENT CURRICULUM 2022 by Rock The Street, Wall Street

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT INTRODUCTION # FOLLOW US ON SOCIAL!

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM TABLE OF CONTENTS GOLD STUDENT INTRODUCTION OUR MISSION & VISION .......................................................................................................... I OUR GOALS ............................................................................................................................ II ARTICLE: “Math Anxiety” ......................................................................................................... III STATISTICS .............................................................................................................................. VI WORKSHOP SESSION OVERVIEW ......................................................................................... VII GOLD SESSION ONE ............................................................................................................. 1 BINGO ......................................................................................................................... 2 Cohort Norms .............................................................................................................. 3 Pre-Assessment ........................................................................................................... 4 Agenda ........................................................................................................................ 5 Key Terms .................................................................................................................... 6 Stock Analysis ............................................................................................................. 11 Yahoo! Finance ............................................................................................................ 12 Glows & Grows ............................................................................................................ 14 Reminders ................................................................................................................... 15 Bonus Material ............................................................................................................ 17 GOLD SESSION TWO ............................................................................................................. 18 Welcome & Norms ....................................................................................................... 18 Agenda ........................................................................................................................ 19 Stock Analysis ............................................................................................................. 21 New Investment Key Terms .......................................................................................... 22 Case Study ................................................................................................................... 25 Project: Financial Planning for Janella ......................................................................... 30 Case Study Outline ...................................................................................................... 32 Group Refection .......................................................................................................... 33 Bonus Material ............................................................................................................. 36 GOLD SESSION THREE ......................................................................................................... 40 Welcome & Norms ....................................................................................................... 40 Agenda ........................................................................................................................ 41 Stock Review & Yahoo! Finance ................................................................................... 42 New Investment Key Term ............................................................................................ 43

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM TABLE OF CONTENTS Case Study ................................................................................................................... 45 Project: Financial Analysis for Janella ......................................................................... 48 Glows and Grows ........................................................................................................ 50 Reminders for Next Session ........................................................................................ 51 Bonus Material ............................................................................................................. 54 GOLD SESSION FOUR ........................................................................................................... 57 Welcome & Norms ....................................................................................................... 57 Agenda ........................................................................................................................ 58 Stock Review & Yahoo! Finance .................................................................................. 59 New Investment Key Term ........................................................................................... 62 Case Study ................................................................................................................... 63 Project: Financial Analysis for Janella ......................................................................... 65 Group Refection .......................................................................................................... 67 Bonus Material ............................................................................................................ 70 KEY TERMS GLOSSARY ........................................................................................................ 72 GOLD SESSION FIVE ............................................................................................................. 75 Welcome & Norms ....................................................................................................... 75 Agenda ........................................................................................................................ 76 Think About It! .............................................................................................................. 77 New Investment Key Terms ......................................................................................... 78 Stock Review ............................................................................................................... 79 Post-Assessment ........................................................................................................ 81 Group Presentations .................................................................................................... 82 Group Refection ........................................................................................................... 86 Bonus Material ............................................................................................................ 87 COMPANY RESOURCES AND ARTICLES ............................................................................ 88 Lululemon vs. Nike ...................................................................................................... 89 American Airlines vs. JetBlue ....................................................................................... 108 ARTICLE: Careers in Finance 136 RESOURCES 140

OUR MISSION

Rock The Street, Wall Street hopes to break the cycle of multi-generational fnancial naivete so that girls have a better chance at improving their lives, their households and their communities. Fifty years after the adoption of Title IX, women continue to confront barriers to full equality at all levels; most critically of which is in their fnancial lives. This is even more egregious for women of color, where they earn, save and invest at lower rates. In college fnance and economics classrooms, girls are few in number. As a result, their opportunities in pay, promotion and life are unequal. Equipping girls with fnancial skills is a vital part of ensuring equal opportunity. Financial literacy is The Great Equalizer

Rock The Street, Wall Street believes to close the gender gap in the wages, wealth and in the fnancial services sector we have to inspire girls to pursue the M in STEM and fnance, by exposing them to real life role models. The number one reason why girls are not choosing STEM professions - they don’t see women in those professions The number two reason - they don’t see their friends choosing those majors in college We engage female fnancial pros who walk the talk on all matters fnancial. They teach and motivate the next generation. Our students see girls in their RTSWS cohort choosing fnance, economics or a related computational feld as their majors/minors. Whether they choose the profession or head into another feld, our students are far better prepared for critical decision making on all types of fnancial and career prep matters.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM ABOUT ROCK THE STREET, WALL STREET

Rock The Street, Wall Street is a fnancial and investment literacy program designed to bring both gender and racial equity to the fnancial markets and spark the interest of high school girls into careers of fnance. Girls learn about saving, investments, budgeting, stock and capital markets and their role in maintaining the welfare of their families, communities and the economy, while simultaneously helping them see the real world application of the math content they learn in the classroom.

OUR VISION

GOLD STUDENT INTRODUCTIONI

Rock The Street, Wall Street is reaching young women at their local high schools. We ofer young women a fight path to a fnancial education through hands-on fnancial projects, workshops, role modeling, mentoring and real-life Wall Street experiences. Girls are introduced to fnancial concepts such as savings, investments, post-secondary and college fnancial preparedness, budgets, stocks, bonds, fnancial analysis, venture capital and private equity.

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Spark girls’ enthusiasm for fnance at a critical age and make them aware of the societal benefts personal fnancial knowledge and math-oriented careers can ofer.

Increase fnancial and investment literacy of girls at a young age so that they are aware of the fnancial responsibilities AND opportunities of post-secondary life, at college, at work, at home and in their communities.

Close the gender and racial gap in wages, investments and wealth accumulation for all women.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM IIGOLD STUDENT INTRODUCTION OUR GOALS •

• Provide a pathway to better lifetime money management, academic performance and college preparation.

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Teach girls on how being fnancially independent is key to living a self-determined life.

Open girls’ minds to math-focused felds of study as compatible with a career that has a positive impact on the world.

• Create a longitudinal cohort of girls who can network with each other across cities, countries, socio-economic lines and industries.

• Become the go to internship and job portal for emerging, diverse talent in the fnancial services industry and beyond.

• Create the social capital between students and female fnancial professionals that will enable students to get a jumpstart on their personal money management behavior and on their college and work lives.

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• Increase the number of women studying fnance, economics or related computational business felds.

• Create an early pipeline of female talent to increase the number of women who enter into the fnancial services industry.

• Coach students on resume building.

• Foster students’ continued growth in fnance through their college years and into the workforce.

• Provide career discovery by ofering job shadowing and/or industry summer internships.

Parker, 30, taught Algebra II and geometry to high-school students before switching to fnancial planning and working with her 76-year-old father, who has his own frm. She also became a Certifed Financial Planner. “I have a math background and the CFP puts me in a good position to do fnancial planning in a way that educates people about the planning and why,” she said. Their age difference also helps them work with clients of all ages and provide their own perspectives, she added.

This teacher-turned-fnancial adviser on the different ways men and women approach math and life

Parker spoke with MarketWatch about her education background, why people are so worried about math and how to mesh the two: MarketWatch exactly would you describe math anxiety?

: How

By Alessandra Malito, MarketWatch (October 24, 2019)

A fear of math can be debilitating — and not just because it could result in poor math grades. Many students, especially girls, may avoid careers that include a heavy amount of math, especially those in STEM (Science, Technology, Engineering and Math) felds. Girls made up just 30% of the top 5,000 ninth-graders in the American Mathematics Competitions, according to research distributed by the National Bureau of Economic Research in 2017. Just 18% of the top 500 ninth-graders were girls, and only 8% of the top 50. That gender gap worsens as they age — by senior year, only 22% of the top 5,000 are girls (compared with the 30% in ninth grade), followed by just 12% of the top 500.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT INTRODUCTION

Many Americans suffer from “math anxiety,” which inhibits their ability to solve problems — a potential issue when it’s time to balance a checkbook or save for retirement.

Math anxiety may start in the classroom during childhood but it has a way of following students throughout their lives, said Maddie Parker, a fnancial adviser at Parker Financial Group in Overland Park, Kan., who started her career as a high school math teacher before switching to fnancial planning. She has seen people postpone their fnancial plans and refrain from saving for retirement because they don’t want to deal with the possibly complicated equations and complex investing topics.

Women sufer from ‘math anxiety’ more than men do — here’s how to reverse it ARTICLE

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MW: How can math anxiety impact personal fnances?

Parker: There are great articles and podcasts and TED talks about the same concepts, of how we’re raising our girls to be perfect and raising our boys to be brave. And there was one example at a girls’ coding camp, where they have to learn to do coding and the girls specifcally would type up all this stuff and then if they couldn’t fgure it out they’d erase it all and call the teacher over. The teacher would press undo and show all of this work and that they were really close, but because the girls couldn’t make it work they wanted to tell the teacher to show them from the beginning. They didn’t want to show this not perfect work. It is just a good example that demonstrates that girls are being raised to be perfect and not in the same way as boys, who may say (like in that example) that they don’t care and at least they’ll get partial credit. The only way to learn is by making mistakes, but that gets lost on girls when they feel they have to be perfect.

Parker: In high school, you’re not required to take personal fnance and the math you’re doing is unrelated to what you do in real life. And that real life math in your brain is still tied to calculus so you think, “I couldn’t do that at 16, I probably can’t handle fnances now.” But it is different math. It’s not to say it’s simple, but it’s different, and it is applicable in such a way that people do fnd it easier to understand. It is not quite as challenging as graphing logarithmic equations. It’s a lot different.

Parker: It translates from kids to adulthood. When you get out of school, you’re less exposed or have less experience being tested so the anxiety may seem like it’s gone away but any time math or that skill is required, the anxiety comes right back. I think it has been perpetuated as a weird acceptance in our country, that it’s OK to be bad at math. Like, “oh, math is hard and it’s OK not to get it.” It defnitely follows into adulthood and affects people dealing with fnances, because they have to do math and they don’t know how to do it, and they’re stressed or embarrassed to ask for help.

Maddie Parker: A lot of people would say “I have that” and to a degree, a lot of people do, but it’s more than feeling like you don’t do well on exams. Kids who have math anxiety almost always have a physical inability to respond to being tested or asked to perform on math-related tasks. It is just built up over the years of different experiences, and it stops them from being able to learn any further.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT INTRODUCTION

MW: Is it something adults face?

MW: There are many people who say women generally are more likely to have math anxiety than men. Is that something you’ve seen?

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT INTRODUCTION

Parker: One of the biggest ways is in my ability to explain things. It’s funny, I majored in math and decided to be a high school math teacher, but when I was in high school, I struggled with math. I had good grades and I didn’t have math anxiety, but I wasn’t some freaky Einstein genius kid who got it all. It made sense when I didn’t get something right and because I liked it so much I worked hard to understand it. I was good at explaining things to my friends. But my own struggle made me good at explaining it. A lot of math teachers are geniuses who understand it, and that makes it hard to explain it to students who are struggling. That ability translates nicely to doing fnancial plans. I can see what is probably going to confuse them and where they’ll get lost.

Parker: It is more apparent for women when they are single individuals. They’re more comfortable saying “I don’t get it” or it’s more evident. They’re not as afraid to ask for help. It’s when they’re with their spouses it is easier to be quiet or let them talk and pretend you understand things because your partner is helping you, but it is still relevant. I always work with most clients together and I will ask them both “do you understand this?” or make sure they’re both on the same page.

Parker: It is important that there be no stigma about it. There’s this expectation people have of themselves that they should know more about fnance because it applies to their life. I am a fnan cial adviser and I don’t know how to fx my car, so I bring it to be serviced by professionals. I don’t feel stupid because I didn’t focus on that and I know nothing about it.

Parker: It varies, but one big thing we talk about is infation and compound interest. The need to factor in infation because a dollar today is not going to be a dollar 10 years from now, and that it is a slow climb. People are amazed at how different the numbers look when I factor in 2.5% infa tion.

MW: Are there any math-related topics that clients typically have a hard time understanding?

MW: How would you say your background as a math teacher benefts you and your clients?

MW: Does that concept translate to adult couples in fnancial planning?

MW: Is there any way to overcome math anxiety?

It can be scary if you don’t know who you’re going to and unfortunately there are some bad peo ple out there, but if you do your homework to fnd the people to help you, you don’t need to feel ashamed or embarrassed. That’s the whole reason you fnd a professional to begin with — some one who is trained. That’s their job.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT INTRODUCTION VI

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To create a Google Slides or PowerPoint presentation on their recommendations based on their research, and give these team presentations during the last RTSWS session.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT INTRODUCTIONVII Gold Curriculum Workshop Sessions Gold Curriculum Learning Outcomes: •

To play the role of Financial Advisor for Janella, a 39-year old professional with a sizable sum of money saved and ready to invest in one of the the two stocks from the case study.

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To defne basic investment terms.

To conduct research, analyze and run a case study comparing two well-known publicly company’s stocks.

traded

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To become familiar with the various types of careers in fnance.

To follow the price movements of Apple (AAPL) and the SPDR S&P 500 ETF Trust (SPY).

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GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT INTRODUCTION VIII Session Topics and Key Terms:

Please write in the day, time and location of each session. Be sure to add these dates to your phone calendar as well to set reminders.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM www.rockthestreetwallstreet.com/internship-job-portal

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 1GOLD STUDENT SESSION 1 Welcome to RTSWS Session #1! • Be sure you have a pen, pencil or writing utensil • Grab a snack • Get ready to share your name, grade and favorite emoji Human Scavenger Hunt - BINGO Find another RTSWS student or volunteer who can answer “yes” to a BINGO question on the following page. You must have that person sign their name within the square. The object is to meet as many people as you can and fll a “BINGO!” (A complete line horizontally, vertically or diagonally). You can only use a person once to fll in a square. The Wall Street feld trip is a capstone experience whereby students are given a rare glimpse into corporate ofce settings and the workplaces and work lives of fnanciers. The experience allows the students to shadow female treasury ofcers, wealth managers, analysts, comptrollers, entrepreneurs,accountants,andmore.For many of our students, this is their frst glimpse into the world of fnance, opening their eyes to a new world of possibilities.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 2 GOLD STUDENT SESSION 1 interviewedHasbeforejobafor bankaHasaccount leftyaIsscootersorBikesorschooltoworkcatsPrefersdogsover isBirthdaymonththis greenHaseyes twinaIspineappleLikespizzaon LeftIsHanded languagecartwheelfishpetaHasCandoaIslearninganotherIsanonlychildbackwardsDletterhandedleftIsNamestartswithCansaythealphabetPlaysateamsportIsatwinmusicalaPlaysinstrument thanmoreHas countryanothersiblings4HasgreeneyesHasvisited orBikesworktoscootersschoolor atobeenHastheinconcertmonthpast monthBirthdaymonththisis withstartsNameletterfirstsamenameyouras bankaHasaccount catsPrefersdogsover howKnowswhistleto theirtouchCantheirtotonguenose theinbornWasasmonthsameyou pineappleLikespizzaon

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 1 3 RTSWS COHORT NORMS Our RTSWS cohort norms will help us decide together the expectations for our sessions and the behaviors that will allow us to reach our goals. Norms: The behavioral expectations or rules of the class. Class norms inform us how we are expected to behave towards each other and the materials we use. • Come prepared to be a part of RTSWS with your handbook, a writing utensil and a positive attitude. • Be kind and encourage one another - we are all in this together! • Ask questions, share your opinions and let the volunteers know when you do not understand something. • _________________________________________________________________________________________________________________________________________________________________________ • _________________________________________________________________________________________________________________________________________________________________________ As a cohort, briefy discuss what each norm means and what it looks like in action.

best. When you are done with the pre-assessment, you will indicate you are complete to the volunteers by tilting your laptop screen down OR placing your phone upside down. 1. Login to your RTSWS app on your phone or a school computer: (app.rockthestreetwallstreet.com/ or use QR code below) 2. Click on the button labeled “Take the Pre-Assessment” 3. You will have 7 minutes to complete the pre-assessment A RTSWS volunteer will let you 3 minutes remaining and when there is 1 minute remaining. 4. At the end of the test, click “Submit”

This is not graded. We just want to see what you already know, as it helps RTSWS better understand students’ prior knowledge. “I don’t know” is an option and we encourage you to answer in accordance. It is okay to say “I don’t know.”

This will not be shown to your school or any teachers. Just do your best!

PRE-ASSESSMENT

can focus and do

In order to measure your growth and knowledge of fnancial and investment literacy over the course of the next 5 sessions, we are going to take a quick pre-assessment to establish your baseline.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 4 GOLD STUDENT SESSION 1

At this time, we are going to begin the pre-assessment. During the pre-assessment, please remain silent so that other RTSWS students in your cohort their

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 1 5 LET’S GET Today’sSTARTED!GuidingQuestion: What does it mean to purchase stock in a company? SESSION #1 AGENDA 1. Welcome 2. Attendance 3. Human Scavenger Hunt - BINGO 4. Pre-Assessment 5. Introduction to Stocks 6. Yahoo! Finance 7. Create a Stock Portfolio 8. Refection: Grows and Glows 9. Reminders for Next Session By the end of today’s session, you will be able to defne and describe stocks and the stock market.

Buying assets such as stocks, bonds, mutual funds or real estate with the expectation that your investment will grow in value. Investments are usually used to achieve long-term goals.

KEY TERM:

Investing

In order to increase the amount of money you have saved for your fnancial goals, you may choose to grow your savings through investing. Using the space below, write down everything you know about INVESTING

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 16

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 1 7 If you could invest in a company, which would it be and why? Company: _____________________________________________________________________________ Why: __________________________________________________________________________________ Listening to your fellow RTSWS students, what were some of the main reasons others chose to invest their money in certain companies?

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 18 One common form of investing is purchasing stocks.

Stocks are shares (pieces) of ownership in a company.

Let’s Take a Deeper Look at Investing

Commonly referred to as a stockholder. Any person, company or institution that owns at least one share of a company’s stock.

STOCK A share of ownership in a business or corporation. Companies sell shares as a way to raise capital. Stock represents a claim on the company’s assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater.

SHAREHOLDER

Now you Try it! If you bought 300 shares of Company B and they have 100,000 shares in total. How much of the company would you own? (Number of shares purchased) / (Number of shares outstanding) = (Percentage of company owned)

MARKET

The process by which a private company “goes public,” ofering shares for purchase by the public. IPOs allow businesses to gain capital and to shift ownership.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 1 9

STOCKIPO

The collection of physical and electronic markets where buyers and sellers can trade shares. It is like a giant, global auction.

The stock market is the sum of all individual stocks and when an individual stock moves, the market as a whole would also move by a tiny amount. Most trading happens through stock exchanges. Often, the stock market will move up or down because of larger events going on in a certain country or around the world.

If you bought one stock of Company A, and Company A has 10 shares, then you would own 1/10th of the company or 10%.

An Initial Public Ofering.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM The Wall Street feld trip is a capstone experience where students are given a rare glimpse into corporate ofce settings, the workplaces and work lives of Thefnanciers.experience allows the students to shadow female treasury ofcers, wealth managers, analysts, comptrollers, entrepreneursaccountants,andmore.For many of our students, this is their frst glimpse into the world of fnance, opening their eyes to a new world of possibilities. RTSWS SPRING MENTORSHIP COMING SOON! What is the Spring Mentorship? You will be paired with a mentor that you will work with for all 5 sessions. You will work on resume writing, interview skills, self-advocacy, LinkedIn and skills for college and beyond. You can utilize your mentor to help you talk through college and career options as well! Go to the RTSWS App to Enroll! Login to your RTSWS app & click “Enroll for Spring Mentorship”. GOLD STUDENT SESSION 110

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 1 11 Yahoo! Finance & Stock Analysis Company: Apple Ticker: Ticker = A symbol by which stocks are identifed. Tickers are a few letters that distinguish a company’s shares in the stock market. Today’s Stock Price: Date: Up/Down: ( %) 6 Month Trend: x y

FINANCE INSTRUCTIONS

1. Open Yahoo! Finance: https://fnance.yahoo.com/ 2. Click “Sign in” 3. Click “Create an Account” 4. Fill out all the required felds, including your frst and last name, username, password, birthday and mobile number 5. Click “Continue” 6. Enter the 5-digit verifcation code once you have received it. Click “Verify” and then “Continue” 7. Click “Done” 8. You’re all set When you click “Done,” you’ll navigate back to the Yahoo Finance homepage, where you can access your profle in the top-right corner www.fnance.yahoo.com

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 112

Want to create your own Yahoo! Finance login to begin creating your own watchlist and portfolio of stocks to monitor?

My Portfolio - The name for the Yahoo! Finance toolkit that enables you to follow the collected stocks you are interested in tracking. Once you establish stocks to follow through My Portfolio, you will have access to multiple analytics across Yahoo! Finance that will aford greater insight into the stocks you’re interested in.

Watchlists - Follow Yahoo! Finance-curated watchlists of related companies, specifc markets or industry sectors. Get the Yahoo! Finance app on your smartphone and other mobile devices:

INSTRUCTIONS:https://mobile.yahoo.com/fnance

YAHOO!

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 13GOLD STUDENT SESSION 1 How to Add to Your Own Portfolio or Watchlist: 1. Click on “My Portfolio,” then “My Watchlist” then “Add Symbol” 2. Enter the tickers of any stocks you want to track (Example: AAPL for Apple) 3. If you don’t know the symbol, type in the company name and Yahoo! Finance will fnd the ticker for you 4. Each time you select a stock, it will appear in your watchlist Add to Your Portfolio: Apple (AAPL) SPY An ETF that tracks the S&P 500 (the 500 largest publicly-traded companies in the U.S.) Any other companies you are interested in tracking!

GROWS321

What can be improved on for the next session? What terms or ideas do we need to spend additional time on? List three “grows” below: 123

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 114 GLOWS AND GROWS GLOWS

What went well today? What did you LIKE about today’s session? List three “glows” below:

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 15GOLD STUDENT SESSION 1 REMINDERS FOR NEXT SESSION The next RTSWS session is… Date: ________________________________________ Time: __________________________ Before the next session… NOTES Don’t forget to check out the bonus section for additional key terms, bonus articles and challenge activities.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 1 BONUS16

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 17GOLD STUDENT SESSION 1 BONUS

The main stock exchanges in the U.S. are:

Nasdaq—which is an all-electronic exchange Global stock exchanges: There are 60 major stock markets around the world of which the NYSE is the largest. Some of the other major players include: Tokyo Stock Exchange (TSE) → Japan London Stock Exchange (LSE) → United Kingdom Hong Kong Stock Exchange (HKEX) → Hong Kong Shanghai Stock Exchange (SSE) → China Shenzhen Stock Exchange (SZSE) → China Bombay Stock Exchange (BSE) → India Euronext Paris (EPA) → France Frankfurt Stock Exchange (FRA) → Germany

The New York Stock Exchange (NYSE)—which has a physical trading foor but also handles electronic orders

SESSION 1 BONUS

More on Stock Exchanges

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 218 Welcome to RTSWS Session #2! • Be sure you have a pen, pencil or writing utensil • Grab a snack • Get ready to share your name, grade and a hobby you enjoy outside of school RTSWS COHORT NORMS Let’s review our RTSWS cohort norms. These are the expectations for our sessions that we set during session #1. Norms: The behavioral expectations or rules of the class. Class norms inform us how we are expected to behave towards each other and the materials we use. • Come prepared to be a part of RTSWS with your handbook, a writing utensil and a positive attitude. • Be kind and encourage one another - we are all in this together! • Ask questions, share your opinions and let the volunteers know when you do not understand something. • _________________________________________________________________________________________________________________________________________________________________________ • _________________________________________________________________________________________________________________________________________________________________________

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 19GOLD STUDENT SESSION 2 LET’S GET STARTED! Today’s Guiding Question: What are the key components of a case study and how can case studies be used to analyze company performance? SESSION #2 AGENDA: 1. Welcome 2. Attendance 3. Norms 4. Review Agenda 5. Stock Market Review 6. What is a Case Study? 7. Project Work Time: Financial Planning for Janella 8. Whole Group Refection 9. Reminders for Next Session By the end of today’s session, you will be familiar with a case study and the benefts of using case studies to analyze and compare companies. How do you tell an accountant to be quiet? You tell them to use their invoice

STOCK MARKET REVIEW & YAHOO! FINANCE

Review Last Week’s Investment Key Terms:

The collection of physical and electronic markets where buyers and sellers can trade shares. It is like a giant, global auction. The stock market is the sum of all individual stocks and when an individual stock moves, the market as a whole would also move by a tiny amount.

IPO

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 220

Commonly referred to as a stockholder. Any person, company or institution that owns at least one share of a company’s stock. This type of ownership allows them to reap the benefts of a company’s success. Stocks Shares (pieces) of ownership in a company.

Shareholder

Stock Market

An initial public ofering. The process by which a private company “goes public,” ofering shares for purchase by the public. IPOs allow businesses to gain capital and to shift ownership. Ticker The symbol by which stocks are identifed. Tickers are a few letters that distinguish a company’s shares in the stock market.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 21GOLD STUDENT SESSION 2 Stock CompanyAnalysis : Apple Ticker: Today’s Stock Price: Date: Up/Down: ( %) YTD:x y

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 222 Mutual Fund: A professionally managed fund that pools lots of investors’ money in order to buy a basket of investments. NEW INVESTMENT KEY TERM

ETF (Exchange Traded Fund): A collection of stocks and bonds (or other securities) pooled into a single fund. You can buy and sell shares of ETFs on a stock exchange the same way you buy and sell stocks. Although they’re very similar to mutual funds, unlike mutual funds, you can trade ETFs throughout the trading day.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 23GOLD STUDENT SESSION 2

NEW INVESTMENT KEY TERM

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 24

What

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 25GOLD STUDENT SESSION 2

Company Comparison Case Study is a case study? case study is an in-depth analysis of an entity or multiple entities (for our purposes, stocks or companies) in order to understand all of the diferent factors involved in that entity.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 226 What are some of the components analyzed within a case study? It is important to properly analyze and research the background of the focus of your case study. For RTSWS, we will be conducting a case study on two companies within the same industry. 1. Company Background • What industry is the company in? • What is the company known for? • Does the company have a positive or negative reputation? • What can you learn about the company’s management or leadership? 2. Revenue = Money coming in How do companies generate revenue? Let’s take the company Apple for example. What are Apple’s primary revenue sources? How does the company make money?

How

Net Proft = Revenue

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 27GOLD STUDENT SESSION 2 3. Expenses = Money going out, costs What are diferent expenses that companies have?

4. Proft = A fnancial gain equal to the diference between the amount earned and the amount spent vs. Proft

Revenue

Revenue is the total amount of income generated by the sale of goods or services related to the company's primary operations.

Proft, which is typically called net proft or the bottom line, is the amount of income that remains after accounting for all expenses, debts, additional income streams and operating costs. -

Thinking again about Apple as an example, what are expenses that Apple has within its operations? do these expenses afect the business?

Costs

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 228 5. Earnings Per Share (EPS) A company’s net proft divided by its number of shares of stock. EPS is a good refection of how well the company performed. • If the company made a lot of money that year, it would have a higher EPS. • However, if the company performed poorly, they are more likely to have a negative EPS.

•

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•

A low P/E ratio is generally better and can mean that a stock is “cheap” relative to its profts. P/E ratios don’t tell us much on their own. They should be used to compare against similar companies in the same industry or compared with the same company across a period of time.

Price to Earnings (P/E) Ratio

•

A ratio for valuing a company that measures its current share price relative to its earnings per share (EPS). A high P/E ratio could mean that a company’s stock is overvalued or that investors are expecting high growth rates in the future.

1. Lululemon vs. Nike 2. American Airlines vs. JetBlue

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 230

Janella, a 39-year-old professional, has hired your group as her wealth management advisors. She has given you $100,000 to invest for the next 3 years. Your group will choose two of the below companies to research and compare. During RTSWS session #5, your group will pitch one company’s stock to Janella to invest in.

YOU HAVE BEEN HIRED!

3. Use the table on the following pages to track and organize information from relevant articles and your stock analysis. During today’s session, your group will focus on company backgrounds and the pros and cons of each company.

PROJECT: Financial Planning for Janella

2. Determine the companies your group will be researching: a. Lululemon and Nike OR b. American Airlines and JetBlue

Instructions:

1. Split up into about 5 teams of students (depending on cohort size). As a team, you will be conducting a case study for two companies to determine which has a higher potential total return. My Group Members:

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 31GOLD STUDENT SESSION 2 After completing the case study and comparison of your two companies, you will use the information gathered to pitch (or recommend) which company’s stock Janella should invest in (during RTSWS session #5). Important Notes: • Half of the teams will compare Lululemon vs. Nike and the other half will compare American vs. JetBlue. • You will NOT be completing a case study on all four stocks, only the two your team has chosen or been assigned to. Project Resources: • Google or Search Engine • Yahoo! Finance: https://fnance.yahoo.com/ • Company websites • News articles • Data and articles on each company beginning on page 88. • All ofine resources can be found at the back of your workbook titled, “Case Study Company Resources.” You may choose to use the information in the back of your workbook or access current data online. What did the overworked asset say to the other asset? I feel so depreciatedunder

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 232 Case Study Outline Use the organization chart on the following pages to organize and track your research and analysis each session. All Sessions: Use Yahoo! Finance to fnd and record for each company: • Today’s Date • Current Stock Price • P/E Ratio Session 2 Focus (TODAY): • Add the two companies you are tracking to your Yahoo! Finance watchlist • Important Company Background • Primary Sources of Revenue • Primary Expenses • Company Strengths • Company Weaknesses Session 3 Focus: • 2021 Total Assets • Company Liabilities • Market Share • Market Capitalization Session 4 Focus: • Corporate Social Responsibility (CSR) • Competitive Advantage • Finalize Research and Recommendation for Janella • Create Slides for Pitch Session 5 Focus: • Present recommendationsyour to the class PREVIEW OF UPCOMING SESSIONS

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 33GOLD STUDENT SESSION 2 Share one thing that surprised you about your company research. Whole Group Refection: What surprised you? REMINDERS FOR NEXT SESSION The next RTSWS session is… Date: ___________________________________________ Time: __________________________ Before the next session…

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NOTES

Revenue vs. Earnings: Apple

After recording revenue, Apple needs to deduct all expenses associated with running the business. This includes deducting from revenue cost of sales, operating expenses, other expenses and provisions for income taxes.

The next page shows an income statement for Apple Inc. at the end of the fscal year in 2021 from the company’s 10-K statement.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 2 BONUS36 Session 2: BONUS!

Apple Inc. (AAPL) posted a net sales number of $366 billion for the period. The company’s revenue number represented a 33% top-line growth rate from the same period a year earlier.

All these costs reduce revenue to arrive at net income (earnings). Apple posted $95 billion in net income (earnings) for 2021, which was a 65% increase from the same period in 2020.

• Revenue is the income a company generates before deducting expenses.

• Earnings, on the other hand, represents the proft a company has earned; it is calculated by subtracting expenses, interest and taxes from revenue.

• Revenue is the amount of money a company brings in from its business activities, such as from the sales of goods and services.

• In order to evaluate a company’s performance, it’s important for investors to take into consideration both revenue and earnings.

• Revenue is referred to as “top line” because companies list their revenue at the top of their income statement.

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With a mutual fund that invests in the stocks of dozens (or even hundreds) of companies, you lower the chances that a price decline for any single stock will impact your return.

Diversifcation generally may result in a more consistent performance in diferent market conditions.

Diversifcation means spreading your risk by spreading your investments.

With a single stock, all your eggs are in one basket. If the price falls when you sell, you lose money.

DIVERSIFICATION: In general, investing in a mutual fund is less risky than investing in a single stock because mutual funds ofer a way to diversify.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 39GOLD STUDENT SESSION 2 BONUS STUDENTS! BE SURE TO TAKE THE RTSWS CAREER QUIZ THEN REGISTER ON OUR INTERNSHIP & JOB PORTAL! The RTSWS Internship & Job Portal is THE resource for RTSWS students and alumnae seeking internships and job opportunities in fnance, economics and related felds. www.rockthestreetwallstreet.com/internship-job-portalwww.rockthestreetwallstreet.com/career-quiz

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 340 Welcome to RTSWS Session #3! • Be sure you have a pen, pencil or writing utensil • Grab a snack • Get ready to share your name, grade and leader you look up to RTSWS COHORT NORMS Let’s review our RTSWS cohort norms. These are the expectations for our sessions that we set during session #1. Norms: The behavioral expectations or rules of the class. Class norms inform us how we are expected to behave towards each other and the materials we use. • Come prepared to be a part of RTSWS with your handbook, a writing utensil and a positive attitude. • Be kind and encourage one another - we are all in this together! • Ask questions, share your opinions and let the volunteers know when you do not understand something. • ____________________________________________________________________________________ • ________________________________________________________________________________________________________________________________________________________________________

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 41GOLD STUDENT SESSION 3 LET’S GET STARTED! Today’s Guiding Question: How might companies’ assets, liabilities, market share and market cap impact investors’ fnancial decisions? SESSION #3 AGENDA: 1. Welcome 2. Attendance 3. Norms 4. Review Agenda 5. Stock Market Review 6. Additional Case Study Components 7. Project: Financial Analysis for Janella 8. Whole Group Refection 9. Reminders for Next Session Stock Market Review & Yahoo! Finance Mutual Fund A professionally managed fund that pools lots of investors’ money in order to buy a basket of investments. ETF (Exchange Traded Fund) A collection of stocks and bonds (or other securities) pooled into a single fund. You can buy and sell shares of ETFs on a stock exchange the same way you buy and sell stocks. Although they’re very similar to mutual funds, unlike mutual funds, you can trade ETFs throughout the trading day. Review Last Week’s Investment Key Terms:

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 342 Stock CompanyReview : Apple Ticker: Today’s Stock Price: Date: Up/Down: ( %) 1 Month Trend: x y

Let’s take a look at an example of an S&P 500 tracking ETF… INVESTMENT KEY TERM

NEW

An index that tracks the stock price movements of the 500 largest U.S. publicly traded companies. The S&P is one of the most watched stock market indexes. It is considered to be one of the most widely used measures of how the U.S. stock market is performing.

S&P 500 (Standard & Poor’s 500 Index):

You can’t invest directly in the S&P itself, but you can invest in exchange-traded funds (ETFs) that track the S&P.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 43GOLD STUDENT SESSION 3

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 344 SPDR S&P 500 ETF Trust Ticker: Today’s Stock Price: Date: Up/Down: ( %) YTD (Year to Date) Trend: x y SPY

In order to continue our research of the two companies you are analyzing for Janella, we are going to take a look at a few additional components that your team may consider before making a fnancial recommendation.

All companies must take on liabilities in order to operate and grow. Whenever a company purchases something, they will either pay with cash or they borrow money. Borrowing creates a liability and a claim on their total assets by creditors and it must be repaid at some point through cash or the loss of other resources. Case Study Components

Additional

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 45GOLD STUDENT SESSION 3

What are the types of assets that a business may have?

Total assets provide a snapshot of the overall fnancial health of the business. A company’s total assets are recorded on their balance sheet. 2. Liabilities Something a person or company owes, usually a sum of money.

1. Assets Any resources that provide a current, future or potential economic beneft for an individual or other entity. An asset is something that is owned by you or something that is owed to you or a company. What are personal assets that you may have?

What are personal liabilities that you may have?

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 346 Similar to assets, a company’s total liabilities are recorded on their balance sheet. What types of liabilities would a business have?

3. Market Share

Example: A company with 1 million shares outstanding priced at $1 each would have a market cap of $1 million.

Take a look at the graphic below. What do you notice about Apple’s market share within the smartphone industry?

The percentage of an industry that is earned by a particular company over a specifed time period. This metric is used to give a general idea of the size of a company in relation to its market and its competitors.

4. Market Capitalization (Market Cap)

The value of a company that is traded on the stock market. Market cap is calculated by taking the price of a share of stock times the number of outstanding shares.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 47GOLD STUDENT SESSION 3

In general, companies with a larger market cap are considered safer investments because they are likely more established businesses and have been around longer.

Market cap is a common way to assess the size of a company.

1. Move back into your groups. As a team, you will continue to research and analyze two companies to determine which has a higher potential total return.

PROJECT: Financial Analysis for Janella

Engine • Yahoo! Finance:

articles

information

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 348

• All

• Company websites • News articles • Data and articles

Project Resources: •

2. Use the table on the upcoming page to track and organize information from relevant and your stock analysis. During today’s session, your group will focus on total assets, company liabilities, market share and market cap. After completing the case study and comparison of your two companies, you will use the gathered to pitch (or recommend) which company’s stock Janella should invest in (during RTSWS session #5). Google Search https://fnance.yahoo.com/ on each company beginning on page 88. ofine resources will be found at the back of your workbook titled “Case Study Company Research.” You may choose to use the information in the back of your workbook or access additional data online.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 49GOLD STUDENT SESSION 3 Use the organization chart on the following page to organize and track your research and analysis each session. All Sessions: Use Yahoo! Finance to fnd and record for each company: • Today’s Date • Current Stock Price • P/E Ratio Session 3 Focus (TODAY): • Total Assets • Total Liabilities • Market Share • Market Capitalization Session 4 Focus: • Corporate Social Responsibility (CSR) • Competitive Advantage • Finalize Research and Recommendation for Janella • Create Slides for Pitch Session 5 Focus: • Present your recommendations to the class Today’s Case StudyPREVIEWFocusOF UPCOMING SESSIONS

What went well today? What did you LIKE about today’s session? List three “glows” below:

GROWS321

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 350 GLOWS AND GROWS GLOWS

What can be improved on for the next session? What terms or ideas do we need to spend additional time on? List three “grows” below: 123

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 51GOLD STUDENT SESSION 3 REMINDERS FOR NEXT SESSION The next RTSWS session is… Date: ___________________________________________ Time: __________________________ Before the next session… Notes Don’t forget to check out the bonus section for additional key terms, bonus articles and challenge activities.

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GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 3 53

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 3 BONUS54 Market Capitalization Key Takeaways • Market capitalization is the total dollar value of all outstanding shares of a company at the current market price. • Market cap is used to size up corporations and understand their aggregate market value. • Companies may be categorized as large-, mid- or small-cap depending on their market capitalization. • Blue-chip companies are often large- or mega-cap stocks, while the very smallest are referred to as micro-caps. Session 3: BONUS! TOP 10 LARGEST COMPANIES BY MARKET CAP For more visit: https://companiesmarketcap.com/

Critical.

The | July 2020 | www.clevergirlfinance.com/blog/racial-wealth-gap/ Want to the Start By Canceling Debt. Sabrina Calazans | April 2021 | www.thenation.com/article/economy/race-debt/ of Is Bola Sokunbi | Feb 2021 | www.clevergirlfinance.com/blog/financial-well-being-for-women-of-color debt crisis creates a 'vicious cycle' of inequality in Black, Latino neighborhoods, report finds. Erik Ortiz. June 29, 2020. www.nbcnews.com/news/us-news/student-debt-crisis-creates-vicious-cycle-inequality-black-latino-neighborhoods-n1232388

Racial Wealth Gap And How You Can Change It. Nicole

Color

Student

Wage

Racial Wealth Gap?

Gender Gap Rock The Street, Wall Street strongly believes in the importance of closing the gender and racial gap in the field of finance. Understanding and acknowledging the issue is the first step to solving the problem. Take some time to read through these articles we recommend on the gender pay gap, the racial wealth gap and the importance of financial security as a woman of color. We encourage you to educate yourself and take steps towards solving this problem! In 25 Years, the Pay Gap Has Shrunk by Just 8 Cents. Why does the gender wage gap still exist? And what can be done to close it? We unpack the issue. Francesca Donner and Emma Goldberg. 3/25/21 www.nytimes.com/2021/03/24/us/equal-pay-day-explainer.html 9 Strategies For Narrowing The Gender Pay Gap In 2021. Margaret Wack | 3/7/21 | www.moneyunder30.com/strategies-for-narrowing-the-gender-pay-gap

Racial Wealth Gap Articles

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM

Fix

Articles Equity Equity CornerEquity Corner

Student

General/Extra Why Your Financial Well-Being As A Woman

GOLD STUDENT SESSION 3 BONUS 55

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM SCAN THE QR CODE TO JOIN! GOLD STUDENT SESSION 456

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT INTRODUCTION # Welcome to RTSWS Session #4! • Be sure you have a pen, pencil or writing utensil • Grab a snack • Get ready to share your name, grade and favorite beverage RTSWS COHORT NORMS Let’s review our RTSWS cohort norms. These are the expectations for our sessions that we set during session #1. Norms: The behavioral expectations or rules of the class. Class norms inform us how we are expected to behave towards each other and the materials we use. • Come prepared to be a part of RTSWS with your handbook, a writing utensil and a positive attitude. • Be kind and encourage one another - we are all in this together! • Ask questions, share your opinions and let the volunteers know when you do not understand something. • _________________________________________________________________________________________________________________________________________________________________________ • _________________________________________________________________________________________________________________________________________________________________________57GOLD STUDENT SESSION 4

STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 458 LET’S GET STARTED! Today’s Guiding Question: How can we use case study research and fnancial metrics to make responsible investment decisions? SESSION #4 AGENDA: 1. Welcome 2. Attendance 3. Norms 4. Review Agenda 5. Stock Market Review 6. Final Case Study Components 7. Finalize Project Recommendation & Prepare Pitch 8. Whole Group Refection 9. Reminders for Next Session COMING SOON: RTSWS FIELD TRIP

Review

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 59GOLD STUDENT SESSION 4 Stock Market Review & Yahoo! Finance

DON’T FORGET TO STUDY THE KEY GLOSSARYTERMS ON THE UPCOMING PAGES

The value of a company that is traded on the stock market. Market cap is calculated by taking the price of a share of stock times the number of outstanding shares. Last Week’s Investment Key Terms:

Market Share

An index that tracks the stock price movements of the 500 largest U.S. publicly traded companies. The S&P is one of the most watched stock market indexes. It is considered one of the most important measures of how the U.S. stock market is performing.

S&P 500 (Standard & Poor’s 500 Index)

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 460 Stock CompanyReview : Apple Ticker: Today’s Stock Price: Date: Up/Down: ( %) 1 Month Trend: x y

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 61GOLD STUDENT SESSION 4 SPDR S&P 500 ETF Trust Ticker: Today’s Stock Price: Date: Up/Down: ( %) 6 Month Trend: x y

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 462

In discussing how the stock market is performing, we might describe how volatile the market is.

Stock Market Volatility

The frequency and magnitude of stock price movements or whole market movements, either up or down. The bigger and more frequent the price swings, the more volatile the market is said to be.

NEW INVESTMENT KEY TERM

In order to continue our research of the two companies you are analyzing for Janella, we are going to take a look at a few fnal components that your team may consider before making a fnancial recommendation.

A business model that helps a company be socially accountable to itself, its stakeholders and the public. By practicing corporate social responsibility, companies can be conscious of the kind of impact they are having on all aspects of society, including environmental, social and governance factors (ESG).

Having strong corporate social responsibility positively impacts both the society and company brand. It has also proven to boost company morale.

According to the company, Starbucks has achieved many of its CSR milestones since it opened its doors. According to its 2020 Global Social Impact Report, these milestones include reaching 100% of ethically sourced cofee, creating a global network of farmers and providing them with 100 million trees by 2025, pioneering green building throughout its stores, contributing millions of hours of community service, and creating a groundbreaking college program for its employees.” (Investopedia)

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Example of Corporate Social Responsibility

1. Corporate Social Responsibility (CSR)

Additional Case Study Components

“Starbucks has long been known for its keen sense of corporate social responsibility and commitment to sustainability and community welfare.

industrial

Conditions that allow a company to produce a good or service at a lower price or at a higher quality than competitor. competitive generate its industry rivals.

advantage allows companies to

Having a

Funds used by a company to acquire, upgrade and maintain physical assets such as property, buildings

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 464 2. Competitive Advantage

A company’s CapEx can be an indicator of how much a company is investing in its growth.

How do companies achieve competitive advantages? • Cost structure • Branding • The quality of their product or service • Strong distribution network • Superior intellectual property • Superior customer service 3. Capital Expenditures (CapEx)

more sales or achieve higher proft margins compared to

CapEx is any type of expense that a company capitalizes or shows on its balance sheet as an investment instead of on its income statement as an expenditure.

or equipment.

2. Use the table on the following pages to track and organize information from relevant articles and your stock analysis. During today’s session, your group will focus on CSR and competitive advantage.

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PROJECT: Financial Analysis for Janella

3. FINALIZE your fnancial recommendations for Janella For next week’s presentation, be prepared to pitch to Janella which company you recommend she invest her money in and why.

•

4. During the next session, you and your group will present your fnancial analysis and recommendation for Janella to the cohort. PLAN and ORGANIZE your slides to present to the ProjectgroupResources: Google or Search Engine Yahoo! Finance: https://fnance.yahoo.com/ and articles on each company beginning on page 88. All ofine resources will be found at the back of your workbook titled, “Case Study Company Research.” You may choose to use the information in the back of your workbook or access additional data online.

•

1. Move back into your groups. As a team, you will fnalize your research and recommendations for which company Janella should invest her money in.

•

• Company websites • News articles • Data

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 466 Use the organization chart on the following pages to organize and track your research and analysis each session. Session 4 Focus (TODAY): • Use Yahoo! Finance to fnd and record for each company: • Today’s Date • Current Stock Price • P/E Ratio • Corporate Social Responsibility (CSR) • Competitive Advantage • Finalize Research and Recommendation for Janella • Create Slides for Pitch Session 5 Focus: • Present your recommendations to the class Today’s Case Study Focus Presentation Slides Outline • Stock A vs. Stock B • Process by which your team came to their recommendation • Company A • Pros • Cons • Yahoo! Finance Information • Company B • Pros • Cons • Company B: Yahoo! Finance Information • We chose to Invest Janella’s money in ___________ because… • Refection: What surprised you? What was the biggest challenge? What was one thing you each learned during the project? • Q&A PREVIEW OF UPCOMING SESSIONS

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 67GOLD STUDENT SESSION 4 REMINDERS FOR NEXT SESSION The next RTSWS session is… Date: ___________________________________________ Time: __________________________ Before the next session… • Review and study key terms for the post-assessment nextsessionWhatis something new that you learned today? Write below and be ready to share out loud. Whole Group Refection REMINDER! One top score from each cohort will receive a $25 gift card prize! POST-ASSESSMENT NEXT SESSION Check out the bonus section for additional key terms, bonus articles and challenge activities. DON’T FORGET TO STUDY THE KEY GLOSSARYTERMS ON THE UPCOMING PAGES

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•

Session 4: BONUS!

•

Volatility Key Takeaways: Diferent events or occurrences like a pandemic can greatly afect the capital markets/stock market and cause volatility in the market. Volatility in the market measures fuctuations in stock prices. Low volatility means small fuctuations and high volatility means large fuctuations. Low volatility can be interpreted as investors being complacent, not worried. High volatility implies an element of fear in investors’ current attitudes. During volatile times, many investors get spooked and begin to question their investment strategies. This is especially true for novice investors, who can often be tempted to pull out of the market altogether and wait on the sidelines until it seems safe to dive back in. Market volatility is inevitable. It’s the nature of the markets to move up and down over the short-term. Trying to time the market is extremely difcult. One solution is to maintain a long term horizon and ignore the short-term fuctuations.

•

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 4 BONUS70

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 71GOLD STUDENT SESSION 4 BONUS Using the data table as a reference, answer the following questions: 1. How many trades of Apple were made? ____________ 2. What is the common stock dividend of each of these companies’ stocks? Apple ________________ Ford _________________ 3. Which stock is trading closest to its high of the year? ___ 4. What was the decrease in the dollar value of Google stock today? _ ___ 5. What was Ford’s closing price? ____ 6. Which company has the most attractive P/E ratio? Why? ______________________________________________________ CHALLENGE ACTIVITY: Reading the Language of the Street

Capital Expenditures (CapEx)

KEY TERMS GLOSSARY

Earnings Per Share (EPS)

Competitive Advantage Conditions that allow a company to produce a good or service of equal value at a lower price or in a more desirable fashion, which allow the productive entity to generate more sales or superior margins compared to its market rivals. Competitive advantages are attributed to a variety of factors including cost structure, branding, the quality of product oferings, the distribution network, intellectual property and customer service.

A collection of stocks and bonds (or other securities) pooled into a single fund. You can buy and sell shares of ETFs on a stock exchange the same way you buy and sell stocks.

KEY TERMS GLOSSARY72

Corporate Social Responsibility

A company’s net proft divided by the number of shares of stock. Net proft is revenue minus costs. It is a good refection of how well the company performed. If the company made a lot of money that year, there will be a higher EPS.

Market Cap is the price of each share of stock times the number of outstanding shares.

Investing

Buying assets such as stocks, bonds, mutual funds or real estate with the expectation that your investment will make money for you.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM

The money invested by a company in acquiring, maintaining or improving fxed assets such as property, buildings, factories, equipment and technology.

ETF (Exchange Traded Fund)

A self-regulating business model that helps a company be socially accountable to itself, its stakeholders and the public. By practicing corporate social responsibility, also called corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society, including environmental, social and governance.

Investment Risk

The chance of losing all or part of the value of an investment. IPO An initial public ofering. The process by which a private company “goes public,” ofering shares for purchase by the public. IPOs allow businesses to gain capital and to shift ownership.

Market Capitalization (Market Cap)

Shareholder

A symbol by which stocks are identifed. Tickers are a few letters that distinguish a company’s shares in the stock market.

Stock

The percentage of an industry, or a market’s total sales, that is earned by a particular company over a specifed time period.

Mutual Fund

S&P 500 (Standard & Poor’s 500 Index)

Norms

The behavioral expectations or rules of the class.

An index that tracks the stock price movements of the 500 largest U.S. publicly traded companies.

GLOSSARY Market Share

Commonly referred to as a stockholder; any person, company or institution that owns at least one share of a company’s stock.

A share of ownership in a business or corporation. Companies sell shares as a way to raise capital. Stock represents a claim on the company’s assets and earnings. As you acquire more stock, your ownership stake in the company becomes greater.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 73KEY TERMS

Revenue vs. Proft Revenue is the total amount of income generated by the sale of goods or services related to the company’s primary operations. Proft, which is typically called net proft or the bottom line, is the amount of income that remains after accounting for all expenses, debts, additional income streams and operating costs.

The amount of risk that an investor is comfortable taking or the degree of uncertainty that an investor is able to handle.

Risk Tolerance

Stock Market Volatility Measures fuctuations in stock prices.

Ticker

A professionally managed fund that pools lots of investors’ money in order to buy a basket of investments.

Stock Market

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM THEwww.rtsws.myshopify.comOFFICIALROCKTHESTREET,WALLSTREETSHOP!

GOLD STUDENT SESSION 574

Meredith Jones, ESG Leader RTSWS Board Member

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT INTRODUCTION # Welcome to RTSWS Session #5! • Be sure you have a pen, pencil or writing utensil • Grab a snack • Get ready to share your name, grade and if you could choose anywhere in the world to live, where it would it be RTSWS COHORT NORMS Let’s review our RTSWS cohort norms. These are the expectations for our sessions that we set during session #1. Norms: The behavioral expectations or rules of the class. Class norms inform us how we are expected to behave towards each other and the materials we use. • Come prepared to be a part of RTSWS with your handbook, a writing utensil and a positive attitude. • Be kind and encourage one another - we are all in this together! • Ask questions, share your opinions and let the volunteers know when you do not understand something. • • _________________________________________________________________________________________________________________________________________________________________________75GOLD STUDENT SESSION 5

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 576 LET’S GET STARTED! Today’s Guiding Question: Why is it important to research a company prior to investing? SESSION #5 AGENDA: 1. Welcome 2. Attendance 3. Review Agenda 4. Stock Market Review 5. Post-Assessment 6. Group Presentation Prep Time 7. Presentations 8. Whole Group Refection 9. Field Trip & Spring Mentorship Reminders Stock Market Volatility The frequency and magnitude of stock price movements or whole market movements, either up or down. The bigger and more frequent the price swings, the more volatile the market is said to be. Review Last Week’s Investment Key Term:

Janella’s younger sister, Julia, recently received some money on her birthday. She wants advice about the best way to have her money work for her. She wants to pick the best way for her to make more money. Her friend told her, “Buy a lottery ticket. It may be a longshot, but you don’t have to spend much and you could become a millionaire.” Her grandmother said, “Hide it in a safe place in the house so you’ll always have it on hand for emergencies.”

Her cousin advised her to, “Buy stock in a technology company. Silicon Valley companies are always in the news.” Janella told her, “Put it in a savings account. It’ll earn compound interest over time, so you’ll have more than what you started with.”

2. Who gave the riskiest advice? Why?

Think About It!

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 77GOLD STUDENT SESSION 5

Have you ever heard the phrase, “Have your money work for you”?

1. Who gave the best advice? Why?

Let’s discuss a few new key terms and determine how they may impact Julia’s decision for having her money work for her.

Risk Tolerance:

The amount of risk that an investor is comfortable taking or the degree of uncertainty that an investor is able to handle.

An individuals’ risk tolerance is based on a number of factors including age, fnancial stability and amount of time before invested funds are needed for other purposes. KEY TERMS

NEW INVESTMENT

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 578

Investment Risk:

The chance of losing all or part of the value of an investment.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 79GOLD STUDENT SESSION 5 INDIVIDUAL STOCK REVIEW Company: Apple Ticker: Today’s Stock Price: Date: Up/Down: ( %) 12 Month Trend: x y

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 580 SPDR S&P 500 ETF Trust Ticker: SPY Today’s Price: Date: Up/Down: ( %) 12 Month Trend: x y

In order to measure your growth and knowledge of fnancial and investment literacy from the RTSWS sessions, we

to take a

POST-ASSESSMENTPOST-ASSESSMENT are going quick post-assessment

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 81GOLD STUDENT

to see how much you’ve learned! This is not graded. We just want to know how much your fnancial and investment literacy has grown during RTSWS. This will not be shown to your school or any teachers. Just do your best and take a guess if you do not know an answer! At this time, we are going to begin the post-assessment. During the post-assessment, please remain silent so that other RTSWS students in your cohort can focus and do their best. When you are done with the post-assessment, you will indicate you are complete to the volunteers by tilting your laptop screen down OR placing your phone upside down. 1. Login to your RTSWS App on your phone or a school computer: (app.rockthestreetwallstreet.com/ or us the QR code below) 2. Click on the button labeled “Take the Post-Assessment” 3. You will have 7 minutes to complete the post-assessment A RTSWS volunteer will let you know when there are 3 minutes remaining and when there is 1 minute remaining. 4. At the end of the test, click “Submit”

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 582 GROUP PRESENTATION PREP TIME 1. Move back into your fnancial planning groups. 2. Review your research from sessions #2, #3 and #4 and be sure your recommendations within your slides presentation are fnalized. 3. Prepare to present to your RTSWS cohort for 3-5 minutes. Each group member should be assigned a diferent section to present. While other groups are presenting, take notes using the chart on the following page. Janella’s Financial Planning Presentations • Each student group will present for 3-5 minutes • Presentation outline • Company A vs. Company B • Process by which your team came to their recommendation • Company A • Pros • Cons • Company A: Yahoo! Finance Information • Company B • Pros • Cons • Company B: Yahoo! Finance Information • We chose to Invest Janella’s Money in because… • Refection: What surprised you? What was the biggest challenge? What was one thing you each learned during the project? • Q&A • Students not presenting will take notes on the summaries of the presenting groups.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 83GOLD STUDENT SESSION 5

Directions: While other groups are presenting, make note of their stock recommendations and main reasons why. Use this chart to track your thoughts. Also, note which company you would have chosen to compare views.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 84 GOLD STUDENT SESSION 5 JAN - APRIL 2023

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 85GOLD STUDENT SESSION 5 RTSWS SPRING MENTORSHIP COMING SOON! What is the Spring Mentorship? You will be paired with a mentor that you will work with for all 5 sessions. You will work on resume writing, interview skills, self-advocacy, LinkedIn and skills for college and beyond. You can utilize your mentor to help you talk through college and career options as well! How to enroll for RTSWS Spring Mentorship? Login to your RTSWS app and click “Enroll for Spring Mentorship” or access it here: https://app.rockthestreetwallstreet.com

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT SESSION 586 WHOLE GROUP REFLECTION From the presentations today, what do you think is the most important criteria for analyzing a company to invest in? REMINDERS FOR NEXT SESSION The RTSWS FIELD TRIP is… Date: ___________________________________________ Time: __________________________ Prepare a question about the fnance industry to ask during the feld trip!

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 87GOLD STUDENT SESSION 5 BONUS SESSION #5 BONUS MATERIAL

Investment Risk Quiz

Learn more about What Kind of Investor you are and fnd out your Investment Risk Profle Type! Find the quiz (dated March 21, 2022) via Google Search: easy peasy quiz investing.

The Actual Web Address is: https://www.easypeasyfnance.com/quiz-what-kind-of-investor-areyou-profle/

Dividend

Gig Economy

Find the quiz (dated May 21, 2017) via Google search for “motley fool risk tolerance quiz.”

An economy in which temporary, fexible jobs are common and companies tend toward hiring independent contractors and freelancers instead of full-time employees.

More on Risk Tolerance: Risk Tolerance Quiz Learn more about your own investment risk tolerance with The Motley Fool’s Risk Tolerance Quiz.

Bonus Key Terms

A sum of money paid regularly (typically quarterly) by a company to its shareholders out of its profts (or reserves). Unicorn A term used in the venture capital industry to describe a startup company with a value of over $1 Billion.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 88 CASE STUDY COMPANY RESOURCES Lululemon vs. Nike or American Airlines vs. JetBlue GOLD STUDENT COMPANY RESOURCES

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 89GOLD STUDENT CASE STUDY LULULEMON NOTES & QUESTIONS CASE STUDY COMPANY RESOURCES Lululemon (LULU)

If you would like to use a current stock chart for your project: Search “Lululemon stock chart” in Google (You can use Google Finance as well). Click on the Yahoo! Finance link to Lululemon’s stock chart. This will show up at the top of the frst page on Google. Once you arrive at the stock chart you can manipulate how many years, months, or days you would like it to show.

•

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT CASE STUDY LULULEMON90

Lululemon Stock Chart

•

• You can “expand all” to see the information that goes into each section and you can change it from annual to quarterly.

If you would like to use a current balance sheet for your project:

• Go to Yahoo! Finance (You don’t have to sign-in or sign-up).

• Search “Lululemon,” then click the “Financials” tab, and then “balance sheet.”

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 91GOLD STUDENT CASE STUDY LULULEMON Lululemon Balance Sheet

How To Calculate Return On Equity?

June 13, 2022

So, based on the above formula, the ROE for Lululemon Athletica is: 38% = US $1.0b ÷ US $2.7b (Based on the trailing twelve months to May 2022).

Lululemon Athletica Inc.’s Fundamentals Look Pretty Strong: Could The Market Be Wrong About The Stock?

The ‘return’ is the amount earned after tax over the last twelve months. So, this means that for every $1 of its shareholder’s investments, the company generates a proft of $0.38.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM GOLD STUDENT CASE STUDY LULULEMON92 ARTICLE

The formula for return on equity is: Return on Equity = Net Proft (from continuing operations) ÷ Shareholders’ Equity

ROE or return on equity is a useful tool to assess how efectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the proftability of a company in relation to its equity capital.

Lululemon Athletica (NASDAQ:LULU) has had a rough month with its share price down 5.7%. However, a closer look at its sound fnancials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Particularly, we will be paying attention to Lululemon Athletica’s ROE today.

As a next step, we compared Lululemon Athletica’s net income growth with the industry, and pleasingly, we found that the growth seen by the company is higher than the average industry growth of 4.3%.

Given that Lululemon Athletica doesn’t pay any dividend to its shareholders, we infer that the company has been reinvesting all of its profts to grow its business.

Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. If you’re wondering about Lululemon Athletica’s’s valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.

Is Lululemon Athletica Using Its Retained Earnings Efectively?

Why Is ROE Important For Earnings Growth?

Summary In total, we are pretty happy with Lululemon Athletica’s performance. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. That being so, a study of the latest analyst forecasts show that the company is expected to see a slowdown in its future earnings growth. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.

GOLD STUDENT CASE STUDY LULULEMON

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Thus far, we have learned that ROE measures how efciently a company is generating its profts. We now need to evaluate how much proft the company reinvests or “retains” for future growth which then gives us an idea about the growth potential of the company. Generally speaking, other things being equal, frms with a high return on equity and proft retention, have a higher growth rate than frms that don’t share these attributes.

A Side By Side comparison of Lululemon Athletica’s Earnings Growth And 38% ROE First thing frst, we like that Lululemon Athletica has an impressive ROE. Additionally, the company’s ROE is higher compared to the industry average of 21% which is quite remarkable. So, the substantial 25% net income growth seen by Lululemon Athletica over the past fve years isn’t overly surprising.

Invests in Sustainable Materials Company Genomatica

| August 18, 2021

By Neil Patel 25,

Genomatica makes plant-based nylon, which Lululuemon said will replace some conventional nylon it uses for it workout apparel. As part of the partnership, Lululemon has also made its frst equity investment in Genomatica, although it would not disclose the amount. Lululemon funding Genomatica is a nod at its sustainability goals. In October 2020, the company released its Impact Agenda, where it shared plans to become a more sustainable company. The company is working with Mylo, which develops mushroom-based leather, as well as LanzaTech, a company that makes polyester from recycled carbon emissions.

The apparel company’s purchase of Mirror isn’t going so well.

On the fscal 2021 third-quarter conference call, the booming apparel business lowered Mirror’s full-year revenue guidance to between $125 million and $130 million (from $250 million to $275 million before). Although this is a rounding error for Lululemon’s overall business, which is expected to generate greater than $2.1 billion in sales in the current quarter, it nonetheless begs an important question.

Lululemon’s $500 million acquisition in June 2020 of at-home ftness company Mirror hasn’t panned out as management had hoped. And investors are starting to worry whether this was a huge waste of money.

| March

ARTICLE

The ftness apparel giant announced Wednesday it will be using the company’s bio-based materials for future products.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 94 ARTICLE Lululemon

GOLD STUDENT CASE STUDY LULULEMON

“Replacing the petrochemicals that make up many popular materials with more sustainable alternatives is a major step forward,” Patty Stapp, vice president of raw materials at Lululemon said in a statement. Did Lululemon Make a $500 Million Mistake?

By Chavie Lieber

2022

Focus on apparel

Lululemon’s management team cited weaker-than-expected demand and higher customer acquisition costs as reasons to lower guidance for the Mirror segment. This echoes what Peloton (NASDAQ: PTON), regarded as the leader in the connected-ftness market, has been experiencing for the past few quarters. Not only is the once-booming exercise bike manufacturer seeing revenue dramatically slow down, but its sales and marketing expenses also surged 97% in the most recent fscal quarter compared to the prior-year period.

There is a bright side for Lululemon investors to think about -- Mirror is only expected to represent less than 3% of overall company revenue in fscal 2021.

Having a thriving apparel operation afords Lululemon’s management team the ability to not have to invest aggressively in Mirror to try and force success. They can continue to fgure out ways to integrate Mirror into the bigger business and take a more calculated approach. Generating $1.4 billion in operating cash fow over the trailing 12 months provides plenty of fnancial fexibility to plow into boosting Mirror.

Luckily for Lululemon, Mirror’s fnancial results will only dilute earnings by 3% to 5% for the full fscal year of 2021. Meghan Frank, Lululemon’s CFO, shared optimism on the last earnings call: “So in terms of Mirror in 2022 the path to proftability is very much within our control.” Management also expects Mirror to boost its subscriber base by 40% year over year. That’s a positive sign. As of Oct. 31, Mirror shop-in-shops were in place at 152 U.S. Lululemon stores and 48 locations in Canada. The goal is to fnd ways to cross-sell Mirror products, which start at $1,495, to Lululemon’s more than 10 million guests. I’m sure there is a signifcant overlap between the addressable demographics.

Nonetheless, investors are probably scratching their heads at the $500 million price tag Lululemon paid for the at-home ftness company. This was in June 2020, at a time when so-call COVID stocks were the darlings on Wall Street, and competitor Peloton’s market value was skyrocketing. Time will tell whether Mirror works out as leadership had envisioned. For now, Lululemon shareholders will have a thriving apparel business to keep their portfolios in tip-top

GOLDshape.STUDENT STUDY

CASE

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Lululemon’s business has been performing incredibly well, thanks to its Power of Three strategy that emphasizes a focus on an omnichannel experience, product innovation, and geographic expansion. Getting into the footwear business is another sign of how the company is pushing forward with new growth initiatives.

“We want everybody sweating on a Mirror to be in Lululemon and we want everybody sweating with Lululemon to be engaging and using a Mirror,” Lululemon CEO Calvin McDonald highlighted. So far, this looks like a pipe dream.

Was the Mirror purchase a mistake?

LULULEMON

Good growth

The main reason not to worry about stockpiling inventory is that growth trends have rarely been better. Lululemon notched a 32% spike in sales through the selling period that ended on May 1, trouncing expectations for the second straight quarter. For context, Nike reported 9% revenue growth in its core U.S. market through late February.

Why Lululemon Isn’t Worried About This Red Flag

GOLD STUDENT CASE STUDY LULULEMON

Lululemon Athletica has a lot of inventory on hand, which normally would be a red fag for any retailing business. That risk is even more elevated at a time when economic growth rates are slowing and infation is spiking. However, the apparel retailer isn’t as exposed to inventory write downs as you might think. Strong demand trends through the frst part of 2022 also imply Lululemon is striking the right balance in keeping its shelves fully stocked. Let’s take a closer look.

by Demitri Kalogeropoulos 9, 2022Inventory levels soared this past quarter.

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| June

Lululemon’s business is riding several positive trends, including a food of hit product releases and its push into new demographics and geographies. Its athletic and leisure apparel is striking a chord with online shoppers, too, which accounted for nearly half of overall sales. In that context, it makes sense that inventory would rise 74% year over year to $1.28 billion in the fscal frst quarter. Management is rebuilding inventory (compared to a slump last year) while working to secure more products, so it doesn’t have to rely as much on expensive air freight transportation. The Lululemon diference It’s also notable Lululemon doesn’t carry as many seasonal items as other retailers like Target and TJ Maxx. That setup means investors can worry less about the promotions and writedown charges that hurt Target’s 2022 earnings outlook. “Our primary focus on technical athletic apparel mitigates the need for mark downs,” CEO Calvin McDonald said in a recent conference call with investors.

Striking the right balance would likely mean Lululemon outpaces the growing athleisure industry in both sales and proftability. The wrong call by the management team would show up most clearly in falling gross and operating margins through the summer months.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 97 That success allowed Lululemon to maintain its industry-thumping proftability level. Operating margin held steady in the latest quarter and is sitting well above peers like Nike. Sure, Nike is more exposed to the Chinese market, which slumped recently due to pandemic restrictions, but Lululemon has a brighter earnings outlook overall, partly because of its success in the e-com merce channel. Looking ahead Management said in early June they weren’t concerned with the inventory buildup, which they described as a planned process. “While our levels are higher than our historical norms,” McDonald said, “we are comfortable with the quality and composition of our inventory.”

GOLD STUDENT CASE STUDY LULULEMON

Investors will have to wait and see if management’s inventory bet pays of with the frst evidence arriving with the retailer’s next earnings results in early September.

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GOLD STUDENT CASE STUDY NIKE Nike Stock Chart

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If you would like to use a current stock chart for your project: Search “Nike stock chart” in Google. Click on the Yahoo! Finance link to Nike’s stock chart. This will show up at the top of the frst page on Google. Once you arrive at the stock chart you can manipulate how many years, months or days you would like it to show.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 100 Nike Balance Sheet If you would like to use a current balance sheet for your project: • Go to Yahoo! Finance (You don’t have to sign-in or sign-up). • Search “Nike”, then click the “fnancials” tab, and then “balance sheet.” • You can “expand all” to see the information that goes into each section and you can change it from annual to quarterly. GOLD STUDENT CASE STUDY NIKE

Nike Corporate Social Responsibility (CSR) and Sustainability Marissa Dean, Ph.D.

GOLD STUDENT CASE STUDY NIKE

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Nike’s Corporate Social Responsibility (CSR) Policy Nike’s Corporate Social Responsibility and Sustainability program resonates with the company’s core belief that “sports can change the world for the better.” Nike leverages the unifying power of sports to promote its CSR agenda in three key areas: diversity and inclusion, community investment, and environmental sustainability.

I. Nike’s Diversity and Inclusion Program

Founded in 1964, Nike is the largest and most recognized sports apparel brand in the world today. From their humble beginnings as a shoe and t-shirt company, Nike has grown into an international conglomerate with an estimated global brand value of $30 billion in 2021. Headquartered near Beaverton, Oregon, the company operates more than 1,000 retail stores worldwide and employs over 73,000 people in 170 countries. In line with their iconic swoosh and “Just Do It” trademark, Nike’s business model is built on developing game-changing technologies and products that have redefned the sports apparel industry. Much of the company’s success is attributed to its international marketing, which includes partnering with popular celebrity athletes and sports teams from around the globe.

Nike’s CSR and corporate governance programs center on providing a healthy and tolerant work environment for all employees. To that end, the company invests in promoting a work environment that celebrates diversity and inclusion. In 2020, Nike introduced two new CSR programs, their Juneteenth learning initiative, and their Unconscious Bias Awareness training program to promote a greater understanding of racial equality and social change. Throughout 2020-21, Nike laid out a fve-year plan for creating more diversity in their workforce, which included a target goal of 50% representation of women and 35% representation of racial and ethnic minorities in their corporate workforce by 2025. In conjunction with this initiative, Nike announced an investment of $125 million over the next fve years to support businesses committed to “leveling the playing feld.”

2020, Nike allocated $4 million to support diversity and inclusion in communities throughout North America through its Until We All Win program. Additionally, eight of Nike’s Employee Networks donated $25,000 a year to nonproft organizations focusing on promoting social equality, regardless of race, gender, and sexual orientation.

III. Nike’s Sustainability Program

Through the Supplier Climate Action Program, Nike ensures their suppliers and manufacturers are committed to their goal of carbon neutrality by 2025. So far, the company announced that all of their North American facilities, as well as 48% of their global operations, are operating on 100% renewable energy, and 99.9% of manufacturing waste from their tier 1 suppliers have been diverted from landflls. Under this new program, there was also a 30% reduction of fresh water used in manufacturing textiles and materials in 2020.

GOLD STUDENT CASE STUDY NIKE

As part of their community outreach program, Nike spent more than $89 million in 2020 to help over 17 million kids around the world get active in sports and exercise. Nike also committed to training nearly 100,000 coaches to help communities most in need.

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102In

II. Nike’s Community Support Program

Response

To encourage more gender inclusivity and equality, Nike invested over $100 million into their Girl Efect program between 2015-2020 to improve the lives of tens of millions of girls in 20 countries throughout Africa and Asia.[5] The company also expanded its digital training tools to include the Coaching Girls program which aims to make sports more fun and inclusive for girls through coach education and leadership training.

Lastly, in collaboration with Converse, Jordan Brand, and Michael Jordan, Nike announced a 10-year $140 million CSR commitment to support social equality for Black Americans, $40 million of which is intended to support organizations and nonprofts addressing systemic COVID-19inequality.

Nike’s COVID-19 response was widespread, covering the costs of food and apparel for global communities and extra assistance for their employees. The eforts included $30 million for food and medical care and a $5.7 million dollar donation of footwear and apparel to healthcare professionals and front-line workers.

For employees, Nike worked with suppliers to implement proper health and safety protocols at their facilities and provided paid time of and free virtual counseling for those who were experiencing mental and emotional distress due to the pandemic. Nike also implemented a two-to-one match for all employee donations made to organizations addressing COVID-19-related relief and support.

Understanding that if there “is no planet, there is no sport” Nike continues to make considerable inroads in promoting their environmental sustainability initiatives.

To further reduce waste, Nike is introducing more sustainable materials into their product lines and taking advantage of reusable and recyclable products. In 2020, sustainable material integration increased from 41% to 59% in their clothing lines. Although [EE1] [MH2] the use of sustainable materials in their footwear was unchanged in 2020, the company is focusing on sustainable materials such as Flyleather, a material made with at least 50% recycled leather scraps. So far, over 4 billion plastic bottles have been reprocessed into polyester and other textiles that are used in their products. Nike is also piloting alternative packaging solutions that replace corrugated cardboard with reusable shipping totes.

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Conclusion Living up to their “Just Do It” brand, Nike continues to set industry standards for its innovative product designs and marketing strategies. To maintain its competitive advantage, Nike will need to expand and improve their supply chain practices to ensure that protocols protecting the safety and wellbeing of all workers are enforced. The company’s heavy reliance on over seas factories also means that Nike will need to continuously monitor and improve their opera tions to ensure that its products are socially and ecologically sustainable.

In addition to concerns surrounding their environmental impact, Nike’s labor practices continue to be scrutinized for human rights violations. In 2020, The Washington Post reported that members of the Uighur Muslim minority in China working for Nike were subjected to coerced working conditions and ethno-religious discrimination. In response to this criticism, Nike issued a statement saying that while they are “concerned about reports of forced labor, Nike does not source products from the XUAR [Xinjiang Uyghur Autonomous Region].”

Nike’s Corporate Social Responsibility Issues

GOLD STUDENT CASE STUDY NIKE

Nike has also been under fre recently for fnancially penalizing female athletes who become pregnant while under contract. To address the controversy, Nike has since amended its policy, stated that it will no longer pause or stop payment to pregnant athletes. Despite these eforts, the company continues to be criticized for not acknowledging its past treatment of female athletes.

Despite adopting a range of new environmental protocols to reduce environmental waste, Nike’s carbon footprint remains unchanged from its 2015 baseline. This is largely attributed to a steady stream of new footwear lines that require new materials. In addition, while the brand has set a science-based target to reduce greenhouse gas emissions, there is little evidence they are on track to meet their target of operating entirely on renewable energy by 2025. There is also no clear indication that the company - which relies heavily on trees and plants for their textiles - has a policy in place to address deforestation.

Then there’s the fast-growing stock market favorite Lululemon Athletica (NASDAQ: LULU), whose top- and bottom-line beats and higher full-year guidance have pushed its stock 14% higher since reporting on Sept. 8. While dealing with the same issues as Nike, Lululemon has a distinct advantage that lets it handle the negative situation better.

Neil Patel The Motley Fool | September 28, 2021

Nike (NYSE: NKE) has long been the undisputed leader in the global athletic apparel market, but its recent quarterly results show a business battling shipping delays, labor shortages, and production shutdowns. Sales of $12.45 billion in the most recent quarter missed Wall Street expectations, and the stock price tanked roughly 6% following the news.

To make matters worse, management lowered guidance for the full fscal year. “We now expect fscal ‘22 revenue to grow mid-single digits versus the prior year, versus our prior guidance of low double-digit growth,” CFO Matt Friend mentioned during the Q1 earnings call.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 104 ARTICLE Bad News for Nike Makes Lululemon the Better Buy

Because 51% of Nike’s footwear and 30% of its apparel is made in Vietnam, COVID-19-related shutdowns in the country are having an extremely adverse efect on the company. Management admits that 10 weeks of production has already been lost in the Southeast Asian nation, and it will take several months of phased reopenings to get things back up to speed. Moving fnished goods from Asia to the U.S. is a diferent animal altogether, something Friend says now takes 80 days on average, double the time it took before the pandemic.

You’ve defnitely heard this one before Nike’s frst quarter of fscal 2022 was a poor performance all around. Revenue in North America, the company’s largest geographic segment, also disappointed Wall Street. And Greater China, which is usually its fastest-growing region, registered the slowest gains out of any of Nike’s geographies.

Having less inventory on hand has had one positive impact on Nike. Since the business didn’t have to resort to as many price markdowns and other promotions, its gross margin for the quarter came in at 46.5%. But as you’ll see, this doesn’t hold a candle to Lululemon.

Shareholders will be happy to know that Nike is by no means dealing with a demand problem, as consumer interest in the brand remains as strong as ever. Inventory levels, however, are not expected to normalize until fscal 2023, so how the company navigates the upcoming holiday shopping season will be important for shareholders to watch.

GOLD STUDENT CASE STUDY NIKE

There you have it. Lululemon’s premium pricing allows it to more easily deal with the current situation, while still satisfying Wall Street’s demands. And like Nike, it has no issues when it comes to consumer demand. Lululemon is strengthening its competitive position as its larger peer is struggling to keep up. And that’s why I think it’s the best apparel stock to own today.

By Demi Lawrence Staf Reporter, Portland Business Journal | May 23, 2022

ARTICLE Nike rises to its highest spot ever on new Fortune 500 list

Oregon’s homegrown footwear and apparel giant inched up two spots from last year in the latest ranking of the nation’s largest corporations.

Nike (NYSE: NKE) ranked No. 83 in this year’s Fortune 500 its highest place to date after a year in which profts increased more than 125% to $5.7 billion and revenues rose 19% to $44.5 billion.

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Expected to announce quarterly earnings next month, Nike’s recent business has some analysts anticipating headwinds. According to senior adviser for sports at market research

Not a concern for the athleisure pioneer Lululemon is the darling on Wall Street, as its stock has soared nearly sevenfold over the past fve years, crushing bigger rival Nike. Revenue for fscal 2021 is forecast to be $6.23 billion (at the midpoint), compared to previous guidance of $5.87 billion (at the midpoint). Lululemon is now on track to achieve its 2023 revenue target an incredible two years ahead of schedule. For what it’s worth, earnings expectations also received a boost.

GOLD STUDENT CASE STUDY NIKE

Operating in the same industry, you’d think Lululemon would be in the same boat as Nike, and that is defnitely the case. But the athleisure clothing maker’s unwavering focus on going direct-to-consumer gives it a leg up on the competition. Relying primarily on its own website and global footprint of 534 stores to distribute its insanely popular items, you rarely, if ever, see Lululemon products go on sale at huge discounts. And that’s why the business produced a gross margin of 58.1% in the most recent quarter. CEO Calvin McDonald revealed why this proftability is so important, especially in a supply-constrained economy like the one we’re currently in. “Our vertically integrated model and high margin structure allows us to use more airfreight while still delivering gross margin expansion.”

Nike frst made the Fortune 500 in 1995, debuting at No. 301 and has been mostly rising in rankings since, breaking into the top 100 in 2016.

ARTICLE Nike Stock vs. Lululemon Stock: Which is the Better Sports Apparel Buy?

By Chris Preston | July 1, 2022

106 company NPD Group Matt Powell last month, Nike brand sales including direct-to-consumer sales are down 16% versus this time last year. This is a blow to the company that last year announced its Consumer Direct Acceleration, a business strategy which replaces the Consumer Direct Ofense and puts even greater empha sis on getting products to market quickly and through direct sales channels, such as Nike’s apps and stores.

Medford-based auto group Lithia Motors (NYSE: LAD) also rose on this year’s list, climbing 73 spots to No. 158. While the Fortune 500 gets the most attention, the business magazine compiles a list of the 1,000 largest companies. That brings in three more companies with Oregon headquarters: Columbia Sportswear at No. 813 (up 28 spots); Schnitzer Steel Industries at No. 890 (un changed); and Portland General Electric at No. 942 (down 16 spots).

Lululemon is the Fastest-Growing Sports Apparel Company. Is it a Better Buy than Nike Stock? Let’s Break down Nike stock vs. Lululemon stock.

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Nike (NKE) has been king of the sports apparel market for decades, swatting away challengers as easily as Dikembe Mutombo might redirect a Muggsy Bogues layup attempt. Under Armour (UA) has failed to overtake them. Adidas (ADDDY) has faded a bit. You don’t even hear about Reebok anymore. Nike is still the king. Lululemon (LULU), a far more niche apparel company, may be its closest challenger. So, with spring around the corner, it’s time to get your athletic apparel out of winter storage. I thought it might be worthwhile to compare Nike stock vs. Lululemon stock. In terms of size, there’s no comparison. Nike is a $198 billion market cap company and Lululemon is a $46 billion market cap company. And yet, on an average day, you might see as many people (men and women) wearing Lululemon yoga pants and pullovers as you see people wearing Nike gear. Ten years ago, that wasn’t the case. The numbers support the anecdotal evidence. In 2010, Lululemon did just $411 million in sales. In 2020, net revenue increased 11% to $4.4 billion, exceeding analysts’ expectations

GOLD STUDENT CASE STUDY NIKE

From a value investing perspective, NKE is the more appealing stock, trading at 28.3 times forward earnings vs. a forward P/E of 41.7 for LULU; the margin isn’t as wide as you might expect given their relative ages (LULU held its IPO in 2007, NKE in 1980). In the long term, Lululemon is growing faster than Nike. What’s telling is that institutional ownership in the two stocks hasn’t wavered; each apparel stock remains above 80% owned by hedge funds, which means Wall Street still thinks highly of both.

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Going back further, LULU is up 69% in the last two years, while NKE is up 42.5%. Over the last fve years, LULU has outpaced NKE by about 5 to 1. Will that continue over the next fve years? Probably not to that degree, especially since it will take a while for all retailers to recover from the damage COVID-19 did to non-essential businesses. But with analysts expecting Lululemon to resume double-digit top- and bottom-line growth this year, I expect LULU will continue to outperform both the market and NKE in the next half-decade. Sure, the valuation is a bit high, but not that high given the growth trajectory. As for Nike stock, it remains a rock-solid, long-term investment, and likely a safer short-term play if market volatility continues. If you add NKE to your portfolio and stash it away for 10 years, you’ll probably do quite well (it pays a modest 0.97% dividend yield too, which helps over the long haul). But LULU is the better growth stock. Lululemon may never knock Nike from its sports apparel perch, no matter how many people you see wearing yoga pants to the local cofee shop. But in terms of Nike stock vs. Lululemon stock, it’s no contest. Buy LULU.

GOLD STUDENT CASE STUDY NIKE

Nike’s sales and earnings growth have taken more of a hit the last couple years. But in fscal 2021 EPS ($3.56) more than doubled the prior year’s results ($1.60). Granted, any year-over-year comparisons to 2020 are tricky. But for the most part, Nike is still growing. And the general disparity in sales growth in NKE vs. LULU is no surprise given that Nike is the much older company, and perhaps the most universally recognized sports brand on the Evenplanet.if it eventually expands beyond its yoga roots, Lululemon may never catch Nike in terms of sales, global reach, or popularity across all demographics (Lululemon’s customers tend to be white and higher income, whereas Nike gear is worn by all). That said, which apparel company is the better investment right now: Nike stock vs. Lululemon stock.

Let’s break it down! Nike Stock vs. Lululemon Stock

107 of the company to pull in $4.14 billion in revenues, even with the nationwide shuttering of non-essential retail stores putting a dent in those estimates. Earnings did take a hit last year, but are expected to bounce back in a big way this year: analysts anticipate 63% EPS growth.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 108 NOTES & QUESTIONS GOLD STUDENT CASE STUDY AMERICAN AIRLINES CASE STUDY COMPANY RESOURCES American Airlines (AAL)

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If you would like to use a current stock chart for your project: Search

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Once you arrive at the stock chart you can manipulate how many years, months, or days you would like it to show.

GOLD STUDENT CASE STUDY AMERICAN AIRLINES American Airlines Stock Chart

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“American Airlines stock chart” in Google. Click on the Yahoo! Finance link to American Airlines stock chart. This will show up at the top of the frst page on Google.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 110 American Airlines Balance Sheet If you would like to use a current balance sheet for your project: • Go to Yahoo! Finance (You don’t have to sign-in or sign-up). • Search “American Airlines”, then click the “fnancials” tab, and then “balance sheet.” • You can “expand all” to see the information that goes into each section and you can change it from annual to quarterly. GOLD STUDENT CASE STUDY AMERICAN AIRLINES

Each month, American Way features an article written from the perspective of an American Airlines team member a unique way to connect the airline’s customers with the people who care for them on life’s journey. In the April issue, Jill Blickstein shares how American is focused on long-term sustainability as the airline returns its aircraft to the skies.

As a business that today relies on fossil-based jet fuel, we recognize our responsibility to reduce our impact on the planet. And as our customers return to the skies, we are applying an extra measure of attention to work that will enable the discovery and wonder of travel for generations to come.

Guiding our eforts is a new and ambitious goal to reach net-zero carbon emissions by 2050. To achieve that goal, we know we need to make big strides on fuel efciency. We already have a young and fuel-efcient feet of aircraft, relative to our major competitors. And we want to continue to bring planes into our feet that are built for efciency. We also want to operate those planes on fight paths that are built for efciency. That means modernizing our nation’s air trafc control system, which could reduce CO2 emissions from aircraft by millions of tons each year.

The other side of the fuel efciency equation is, of course, fuel. Last year, American took its frst delivery of sustainable aviation fuel, which is made from renewable feedstocks instead of petroleum and emits 75% less carbon over its lifecycle. We want to use more sustainable fuel in our operation, but here’s the problem: It’s not yet available at scale or at a viable price point. To quicken our industry’s transition from fossil-based jet fuel to sustainable fuel, our team is work ing to advance public policy and market-based solutions that will help drive production and Asuptake.wepursue those long-term goals, we will rely on other tools for reducing our emissions, such as carbon ofsets. We’re proud to ofer our customers ofsets through a partnership with Cool Efect, a nonproft organization that applies extra rigor to the process of verifying that each ofsetting project they work with meets the highest possible standards. If you’d like to ofset the emissions associated with your fight, you can do so via the Cool Efect website. Taken together, these actions represent American’s comprehensive commitment to sustainability. We know that our business has an impact on the environment, but you can be confdent knowing that American is taking steps to protect our planet while we’re taking you where you want to go. These days, our customers expect sustainability to come standard and that’s what we expect, too.

The last year has been tough, to put it mildly. In upending business as usual, the pandemic has reminded us what a privilege it is to travel and experience all that our spectacular planet has to ofer. And amid the health crisis, warning signs about another crisis — the climate crisis — have grown.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 111 ARTICLE Returning to the skies with sustainability in mind American Airlines News Release | April 27, 2021

As we continue to build our airline back as demand returns, we intend to do so with sustainability top of mind.

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

| June

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

If you’re planning to travel by air soon, you have a lot of airline options available. Choosing which airline brand to book a ticket with is a big decision, and your choice can impact your entire trip experience. The booking process, the type of customer service you encounter and your comfort level during the fight can signifcantly vary depending on the airline you choose.

As with any carrier, American Airlines has its shortcomings. But overall, it’s a solid choice for most travelers. Many or all of the products featured here are from our partners who compensate us. This may infuence which products we write about and where and how the product appears on a page. However, this does not infuence our evaluations. Our opinions are our own. Here is a list of our partners and here’s how we make money.

Natasha Gabrielle 2, 2022

NerdWallet has analyzed important factors across major airlines, and here’s where American Airlines stands.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 112 ARTICLE Is American Airlines a Good Airline?

If you’re thinking of fying, you may be wondering, is American Airlines a good airline? We’ll help you better understand what to expect from this fight operator to decide if you want to book one of its fights.

NerdWallet’s airline analysis When choosing a particular brand to fy with, comparing its oferings to other airlines in the industry is one way to make a more informed decision. What is American Airlines like?

Score 1 Alaska 4.9 2 Hawaiian 4.1 3 (tie) JetBlue 3.3 3

Rank

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NerdWallet

5 American 2.8 6 United 2.8 7 Delta 2.6 8 Frontier 1.7 GOLD STUDENT CASE STUDY AMERICAN AIRLINES

Rank Airline Score 1 Alaska 4.9 2 Hawaiian 4.1 3 JetBlue 3.6 4 Southwest 3.5 5 American 3.0 6 (tie) Delta 2.8 6

8 Frontier

Loyalty program good loyalty program will reward you for frequent travel. When compared to other airlines, NerdWallet rates American Airlines’ overall loyalty program lower than some. With a score of 3.0, American ranked 5th, after Alaska, Hawaiian, JetBlue and Southwest, but higher than Delta, United and Frontier. Overall, it’s not a bad program. (tie) United 2.8 1.9 also compared airline loyalty programs to fnd the best program for frequent fiers. We rated the American Airlines program 2.8 out of 5. Alaska, Hawaiian, JetBlue and Southwest all ranked higher, while United received the same score. Delta and Frontier ranked even lower. Airline (tie) Southwest 3.3

When it comes to seat selection fees, NerdWallet found that American Airlines charges an average fee of $19 for a one way fare. This is higher than Alaska, Hawaiian, Delta, United and JetBlue. On average, American Airlines charges less than Spirit, Frontier and Southwest.

American Airlines’ baggage fees are typical. NerdWallet found that the average fee to add both a checked and carry-on bag for a one-way journey was $30 — the same for several other carriers. JetBlue, United, Frontier and Spirit had higher average fees.

American Airlines fies to 350 destinations around the globe. While the airline has many destination choices, you should still consider other important factors before booking your fight.

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 114 Airline fees

Airline fees are another important consideration. NerdWallet compared average add-on fees between carriers — including fees for checked bags, overhead carry-on bags, and seat selec tion. We found that American Airlines has an average add-on fee of around $49 for a one-way fare. This is higher than many other airlines, but Frontier and Spirit had the highest fees.

Check-in: Usually, you can check-in for your fight online or from the airline’s mobile app be tween 24 hours and 45 minutes before your fight’s departure (90 minutes for international fights). At most airports, you can also check-in at an airport ticket counter, curbside check-in counter or self-service kiosk. When checking in or checking bags at the airport, make sure you do so at least 45 minutes before departure for domestic trips and at least 60 minutes before international trips. Some international airports may require an even earlier check in time, so make sure to double check the requirements in advance.

In-fight experience: Is American Airlines comfortable? Your fight experience will greatly de pend on the ticket purchased. First class and business class seating vary but typically ofer more comfort and space. Some long-haul routes even ofer lie-fat seats. Paying for a Main

What is American Airlines like?

Making reservations: You can make reservations online or by phone by calling 800-433-7300. Both of these options are available 24/7. You can also make reservations at most reservations ofces, travel centers and ticket counters, but there may be a fee to do this depending on where you’re located.

Boarding: For most American Airlines fights, boarding begins 30 to 50 minutes before departure and ends 15 minutes before departure. Customers who need assistance and families with children under two can ask to board early. Airline status and ticket type typically determine boarding order, with exceptions for active duty U.S. military members and certain credit card members, such as with the Citi® / AAdvantage® Platinum Select® World Elite Mastercard® or the AAdvantage® Aviator® Red World Elite Mastercard®.

Other things to consider: safety ratings

• Whether the airline has had a fatal crash in the last 10 years.

As for lost baggage and baggage delays, American Airlines has even more work to do. In January 2020, American Airlines was responsible for 46,598 mishandled bags, or 7.81 bags

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

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The American Airlines AAdvantage program is a solid loyalty program. NerdWallet values AAdvantage miles at 1.2 cents per mile. Basic members will earn 5 miles for every $1 spent with American Airlines. Achieving elite status will ofer travelers more perks and higher earning rates (up to 11 miles per $1 spent).

• Whether the airline has sufered numerous serious pilot related incidents.

American Airlines ofers three award redemption options — MileSAAver, AAnytime, and Web Special — with MileSAAver and Web Special awards providing great miles saving opportunities.

• Whether the airline and its country of origin passed major audits.

• Whether the airline is complying with international COVID-19 standards.

As for health safety, American Airlines has a GBAC STAR™ Accreditation from the Global Biorisk Advisory Council. This means that the airline has a cleaning, disinfection, and infec tious disease prevention program in place. If you have concerns about fying amid the pan demic, this may help you feel more comfortable about booking travel. Overall, you can feel confdent with safety when fying on an American Airlines fight. Reliability When it comes to being on time, American Airlines has some improvements to make. The Bureau of Transportation collects important data about commercial airlines. We used some of their data to evaluate the reliability of American Airlines.

AirlineRatings.com rates American Airlines with a 7/7 for safety. Here’s what AirlineRatings looks at when rating:

Cabin Extra seat will get travelers a seat pitch from 33 to 39 inches, a bit more spacious than the 30 to 32 inches in economy class. Regardless of ticket type, fights with WiFi access ofer passengers a free library of movies, music and TV shows that can be streamed from personal Loyaltydevices.program:

In 2020, in regard to all of American Airlines delayed fights, the average departure delay was 57.74 minutes. That same year, American’s on-time arrival percentage was 83.37 percent, with 6.01 percent of scheduled fights canceled.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM

Customer satisfaction

The study looked at satisfaction measures across three groups: frst and business, premium economy and economy. Participants were surveyed on various topics, including boarding, check-in, costs, fight crew and in-fight services. With a ranking of 791 points out of 1,000, American Airlines was near the bottom of the list and below the industry average of 820 points. The only airline to score worse was Air Canada. Delta and Southwest topped the list, while United Airlines was just above American. General cost American Airlines ofers various ticket types at diferent price points. If your priority is a low-cost ticket, basic economy ticket options ofer some of the lowest fares.

116per

There is a risk of delay or cancelation when you book with any airline. But based on the stats above, you may have more chances of this happening when fying with American Airlines.

Nerdy tip: Flying basic economy on American Airlines isn’t a bad option. A NerdWallet analysis found that the airline ofers travelers the best basic economy tickets amongst the major domestic airlines. Travelers seeking a more comfortable fight experience may prefer frst and business class tickets available for a higher price. While not known as a low-cost carrier, the airline does ofer deals and discounts throughout the year. You can take a look at their current deals to fnd inspiration for your next trip. The cost of award redemptions through the AAdvantage loyalty program varies depending on destination and distance of travel. You can fnd Web Special awards for as few as 5,000 miles and MileSAAver awards for as few as 7,500 miles. With limited availability, both of these options may require fexible travel plans. AAnytime award fares are available for travelers with less fexibility, but they are more costly. These award redemptions cost 20,000 to 90,000 miles each way for main cabin tickets, depending on the

GOLDdestination.STUDENTCASE STUDY AMERICAN AIRLINES

The 2021 J.D. Power North America Airline Satisfaction Study examined customer satisfaction across major carriers in North America from August 2020 through March 2021.

1,000 enplaned. It ranked 16th out of 17 carriers for baggage mishandling. In October 2020, American Airlines had 20,310 mishandled bags, or 6.77 bags per 1,000 enplaned. Again it ranked 16 out of 17 when compared to other major airlines. Recently, amid the pandemic, American Airlines canceled a large number of fights. While it’s not the only airline to do this, canceled fights can add to travel frustrations. The airline blamed severe weather for these cancellations.

Travelers who value reliability: American Airlines doesn’t ofer the best reliability when it comes to on-time fights and baggage handling. If this is a crucial factor for you, you may want to think about fying with a diferent airline.

Is American Airlines a good airline? While it does have areas for improvement, no airline is perfect. American Airlines is considered to be a safe airline and has excellent mileage redemption options. It ofers fights to many destinations worldwide and has a variety of ticket types for travelers of all budgets. Before booking a ticket, be sure to join the AAdvantage loyalty program for added benefts. Whether you’re buying a ticket or redeeming AAdvantage miles for travel, make sure your expectations are realistic. If you know what to expect based on your chosen ticket type, you can have a comfortable and positive travel experience.

While American Airlines is a popular airline choice, it may not be the right airline for all travelers. Should you avoid it? While that largely depends on your travel preferences, some travelers may want to consider other available options before selecting American Airlines:

American Airlines has some notable perks. NerdWallet found that American Airlines ofers the best basic economy ticket when compared to basic economy tickets across major airlines. These tickets provide a more afordable solution for travelers who have limited funds. While basic economy tickets can’t be changed or canceled, they’re a good value, you’re able to fy standby, and you can pick your seat for a fee.

American Airlines also has some great deals when redeeming AAdvantage miles through their MileSAAver and Web Special awards. As noted above, MileSAAver fares can be redeemed for as few as 7,500 AAdvantage miles each way for fights within the contiguous 48 U.S. states and Canada with trip distances under 500 miles. Web Special awards are unpublished, ofered exclusively online and are available for even fewer miles. Both of these options provide an excellent way to save miles while traveling. Who should avoid American Airlines?

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Travelers who don’t live in or near a hub: If you don’t live near one of American Airlines’ hubs, you may fnd limited fight availability and may have to deal with more layovers to get to your destination.

If you’re considering fying American Airlines

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

Unique American perks

Travelers who don’t like bag fees: Depending on ticket type purchased, American Airlines may charge fees for checked bags and oversized bags. Choosing an airline that ofers more baggage allowance may make sense for those who like to travel with more luggage.

Thus, 2020 was very much a year to forget for American Airlines and the aviation industry as a whole. Things have started to get better lately, US government bailouts helped paint a perhaps rosier view of things than might otherwise be the case. However, what is the AAL stock fore cast for the rest of 2022? Will it take to the skies, will it crash land, or will it circle around in a holding pattern?

What is the AAL stock forecast as American Airlines recovers from the pandemic?

American Airlines quarterly update: Taking of Before we get into the future, though, let’s take a look at some very recent history. Its latest set of quarterly results on 20 January provided some good news for the company. American Airlines managed to cut its losses to a net $2bn for the full year 2021. It scored revenues of $9.4bn compared with $3.1bn in the same time period in 2019. Money from passenger fights more than doubled, going from $3.2bn in 2020’s fourth quarter to $8.4bn in 2021. Both money coming in from cargo and other streams were up 71% and 22%, respectively, with cargo coming in at $341m and other sources of revenue scoring $704m for the business.

Considering that it is the number one airline in the US, the Covid-19 pandemic and the world’s gradual recovery have had a major impact on American Airlines. In the frst quarter of 2020, as the pandemic took hold, the company racked up a loss of $2.2bn over that period, a dip into the red that had not been seen in seven years. The business was losing $70m a day as travel restrictions and social distancing on fights took their toll on the company.

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 118 ARTICLE AAL stock forecast: Is American Airlines taking of? By Peter Henn | February 24, 2022

AAL boasted transporting 165 million passengers, more than any other carrier in the US, and counted $15.8bn of liquidity at the end of the fourth quarter. The highest year-end balance in company history. It should be noted that last year was one of the worst years ever for the aviation industry as a whole, as pandemic-related travel restrictions grounded fights and left staf on various forms of furlough. More to the point, perhaps, American Airlines bagged itself more $4.2bn in federal payroll support. However, with the government support, the diluted loss per share was $1.44, compared with $3.09 loss per share in the same period a year earlier.

The most optimistic of the stock predictions was $28. On the other hand, there is always the possibility of disaster striking the shares, with the most pessimistic prediction coming in at $8, down by about 52%.

“Over the past year, we have experienced periods of high travel demand countered by periods of decreased demand due to new COVID-19 variants,” Parker said. “This volatility has created the most challenging planning environment in the history of commercial aviation. Yet the American team has delivered, growing back faster and further than any other U.S. airline to meet this unpredictable demand.”

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American Airlines quarterly update: Is the sky the limit?

One of the more encouraging signs of recovery came in the statistic for international passenger miles. This came in at 10.4 billion, triple year-on-year from 3.4 billion, showing that more people were travelling longer distances. Domestic leisure and short-haul international are approaching 100% recovery, while domestic revenue is near 70% of 2019 levels in the fourth quarter.

The markets react In all, the markets were not very impressed by how American Airlines had performed over the quarter. When the markets closed on 20 January AAL stock price was $16.76. It fell slowly to $15.64 just over a week later on 28 January. Back on 2 June 2021, it closed at a 52-week high of $25.82. AAL price forecast When it comes to making an AAL stock forecast, the overall view was fairly spread out with slight optimism winning out. CNN Money’s American Airlines stock forecast by 18 analysts settled on a 12-month AAL stock prediction of $19, which would see it up about 12% from its recent levels.

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

There was some room for positivity, though, with three experts recommending buying into American Airlines and another one saying that it would outperform expectations.

One other thing to note is what the company thinks it can do in the next quarter. In a statement, American CEO Doug Parker passed the torch to his successor, Robert Isom, to fnish the recovery from the pandemic.

What is your sentiment on AAL?

In terms of what to do with American Airlines stock, the overall view from the experts was a cautious one, bordering on the negative. When CNN asked 24 analysts for their recommendations for AAL stock, the consensus was hold. In total, 15 of the experts said to hold. Slightly worrying for the stock is that four analysts suggested selling, while one thought it would underperform against expectations.

Why Boeing and Airline Stocks Are Falling Today

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

Travel demand has held up well so far, but with fresh fears about the impact of infation the stocks are under pressure. Boeing is ill-positioned to deal with a slowdown, coming of both technical issues with some key planes and the impact of the pandemic. There is reason to be long-term bullish on airlines and their key supplier, but that bull thesis will likely take a while to play out.

What happened On Tuesday, airline stocks got a lift after United Airlines Holdings (UAL -0.04%) said that so far, at least, demand is holding up well in the face of rising infation. On Wednesday, the focus shifted to fears over how long that can last. Shares of United, American Airlines Holdings (AAL 0.03%), and Spirit Airlines (SAVE 2.96%) all fell about 5%, and planemaker Boeing (BA 6.22%) also traded down by a similar amount.

By Lou Whiteman

How long can the airlines outrun infation?

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| May 18, 2022

As I said yesterday, these are volatile times to be investing in airline stocks. The sector took it on the chin during the early days of the pandemic, with airlines scrambling to remain liquid as demand fell to near-zero. Demand has recovered nicely so far in 2022, but now new concerns including higher fuel and labor costs and the impact of soaring infation are weighing heavily on Unitedinvestors.remains upbeat, on Tuesday raising its outlook for second-quarter passenger revenue. As expected, costs are going up, too, but United held its margin guidance steady, implying that strong demand is creating enough pricing power to ofset the higher expenses. The question is how long that can last. On Wednesday, the markets sold of following weaker-than-expected earnings from Target. The results suggest that infation is beginning to have an impact on consumer behavior. It seems likely that if penny-pinching is in order consumers are more likely to rethink a big purchase like a vacation, which could mean there is a limit to how much airfare prices can go up in the months to come.

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A potential slowdown comes at a difcult time for Boeing as well. The company stumbled well before the pandemic: Its 737 MAX was grounded for 18 months after a pair of fatal accidents. Post-crash scrutiny has led to regulators taking a fresh look at other Boeing planes as well, leading to delays in its forthcoming 777 widebody update and a suspension of deliveries of its 787 Dreamliner.

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

Boeing’s debt ballooned during the pandemic, when airlines stopped buying new planes to preserve precious cash, and the company’s balance sheet recovery has been hindered by a lack of deliveries due to quality concerns. The prospect of consumers tightening their belts would make it less likely that airlines will rush to refresh their feets in the quarters to come, perhaps further delaying a Boeing recovery. Now what The long-term bull case for Boeing and the airlines is similar, and it has a lot of credibility. Global demand for air travel is expected to grow by more than 2% annually over the next two decades. That’s going to create a lot of demand for airlines, and the need for a lot of new air Theplanes.problem is in the timing. While those long-term catalysts remain intact, there is a lot of uncertainty on the near-term horizon. Airlines have booked fares through much of the summer, but there is no telling what might happen to demand come Labor Day if infation remains elevated. Investors also need to factor in what has so far been a sluggish business fare and international recovery, which could be further dented should a new wave of COVID-19 cases arrive in the fall, as some predict.

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For those interested in buying in and waiting out the headwinds, I’m partial to buying aircraft fnancing company AerCap Holdings over any individual airline or aircraft manufacturer.

For those who want to ride the airlines instead, buckle up and be prepared for signifcant turbulence up ahead.

GOLD STUDENT CASE STUDY AMERICAN AIRLINES

AerCap has seen a sell-of because it has planes operating in Russia that might be unrecov erable due to the war, but the company is well capitalized and remains a way to gain expo sure to aviation growth trends without betting on an individual vendor.

Add in the damage done by infation on the cost side, particularly when it comes to labor and fuel costs, and both the airlines and their most important vendor might be stuck in a circling pattern for a lot longer than investors anticipate.

NOTES & QUESTIONS

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CASE STUDY COMPANY RESOURCES JetBlue (JBLU)

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 123GOLD STUDENT CASE STUDY JETBLUE

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 124 GOLD STUDENT CASE STUDY JETBLUE

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 125GOLD STUDENT CASE STUDY JETBLUE

If you would like to use a current balance sheet for your project:

• Search “JetBlue”, then click the “fnancials” tab, and then “balance sheet.”

• You can “expand all” to see the information that goes into each section and you can change it from annual to quarterly.

• Go to Yahoo! Finance (You don’t have to sign-in or sign-up).

Showcasing Its Progress in Helping to Create a Kinder and Cleaner World

mission to inspire humanity was tested like never before,” said Joanna Geraghty, president and chief operating ofcer, JetBlue. “Humanity depends on compassion, and empathy, and our crewmembers took this to heart. They showed up and went above and beyond to keep our customers safe when they needed to travel. Despite a global pandemic, we continued to support our communities, crewmembers and the planet. With a focus on the future, we evolved our diversity, equity and inclusion strategy to support a more diverse pipeline. Meanwhile, we recognize we have more work to do in reaching our ambitious sustainability targets, so we set clear short-term milestones to hold us accountable along the way.”

October 12, 2021

The Social Impact Report outlines the JetBlue For Good pillars – community, youth and education and the environment – and highlights how the airline supported its communities and crewmembers through the most challenging time in the aviation industry’s history, and took meaningful actions to accelerate its journey to become more representative and inclusive in every aspect of its business. The Environmental Social Governance (ESG) Report outlines JetBlue’s work toward sustainable operations and travel solutions, and its sharpened focus on identifying, tracking, and responding to risks and opportunities shaping the future of its “Inbusiness.2020our

GOLD STUDENT CASE STUDY JETBLUE

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 126 ARTICLE JetBlue Releases Annual Social Impact and Environmental Social Governance Reports

JetBlue responded to pandemic-specifc needs in 2020 by donating both resources and fights to nonprofts to get much needed supplies and medical professionals to the areas in critical need. JetBlue took on these eforts in addition to its signature corporate responsibility programs focused on youth, education, the environment and increasing diversity within aviation and science, technology, engineering and math (STEM) felds.

Over the past 18 months, societal demands and stakeholder feedback spurred JetBlue to reexamine its relationships with its crewmembers, customers and the communities it serves, and in turn, strengthen shareholder value. Aligned with its long-term strategy, JetBlue reimagined its diversity, equity and inclusion (DEI) strategy to contribute to the airline’s long-term growth by starting with a concentrating on three areas – people, sourcing and brand.

One opportunity that emerged as a result COVID-19 pandemic was a renewed global spotlight on the importance of science. Despite a shift from traditional classrooms to virtual learning, JetBlue continued to introduce traditionally underrepresented students to the various possibilities within aviation. JetBlue and the organizations it partners with worked together to not only spark students’ interest in STEM, but also break down barriers that block or prevent underserved youth from advancing in these areas. As the eforts of many organizations to advance diversity, and racial and gender equity were severely impacted by the pandemic, the JetBlue Foundation issued an emergency granting cycle to help organizations like Aviation High School, Columbia Memorial Space Center, and the Latino Pilots Association continue their important work. Much like school classrooms need desks, chairs, textbooks and teachers, virtual classrooms also require resources to be efective. To help support the shift to virtual learning, JetBlue and its crew members volunteered more than 500 hours in virtual classrooms and activities, donated 160 refurbished laptops to ensure students passionate about STEM could continue their education from home, and engaged with 25 STEM-focused organizations via online programming, grants and in-kind support. Community JetBlue pivoted to support its community partners in creative ways and donated much needed supplies, such as blankets, pillows and amenity kits to organizations like the City of New York and its Department of Social Services to help clothe and care for the homeless and other vulnerable communities. JetBlue donated headphones to education partners, like Big Brothers Big Sisters of Broward County, to assist in virtual learning, and provided toiletry kits to local shelters. Dishware and cutlery were sent to local soup kitchens through a partnership with the United Way of Broward County, as well as local soup kitchens in Boston. Through its TrueBlue® loyalty program, JetBlue and its customers donated three million TrueBlue points to charities including Autism Speaks, Make-A-Wish®, Together We Rise and World Central Kitchen to assist with critical travel needs and fundraising eforts.

JetBlue For Good 2020 highlights Youth and Education

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GOLD STUDENT CASE STUDY JETBLUE

• Eliminate single-use plastics within service ware where possible. Where not possible, ensure plastic is recyclable.

Environment

JetBlue continued to take major steps in reducing its impact on the environment. Last summer, JetBlue became the frst airline to achieve carbon neutrality for all U.S. domestic fights by ofsetting carbon dioxide (CO2) emissions from jet fuel and fying with sustainable aviation fuel (SAF). Since 2008, JetBlue has ofset more than three million metric tons of CO2 emissions, the equivalent of taking 652,000 cars of the road for a year, and plans to continue ofsetting all domestic fying indefnitely.

• Maintain at least an 80 percent recycling rate for audited domestic fights.

JetBlue recognizes that ESG issues touch all parts of its business. To ensure the airline is appropriately identifying and managing potential ESG-related risks and opportunities, such as those associated with climate change, JetBlue has incorporated ESG considerations into core business functions starting at the top with its Board of Directors. JetBlue’s Board formed

• Decrease aircraft emissions 25 percent per available seat mile (ASM) by 2030 from 2015 levels, excluding ofsets.

GOLD STUDENT CASE STUDY JETBLUE

Ambitious ESG Targets and Governance

JetBlue accelerated its commitment to take critical and measurable steps toward reducing its contribution to climate change. JetBlue announced several environmental targets to help reach its goal to achieve net zero carbon emissions by 2040, including eforts to:

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JetBlue is currently fying on SAF from two diferent producers for fights at Los Angeles International Airport (LAX) and San Francisco International Airport (SFO). This began in 2020 with Neste, the world’s largest producer of renewable diesel and SAF refned from waste and residues, to fuel JetBlue’s fights from SFO. Neste’s SAF is produced from 100 percent renewable and sustainably sourced waste and residue materials.

Geraghty continued, “We’re facing climate change head-on to work toward a healthier planet, ensure our success and strengthen shareholder value. Despite a challenging year, we have sharpened our focus on ESG. Our experiences in 2020 only reinforced the importance of mitigating risks that threaten the health of our business.”

• Convert 40 percent of three main ground service equipment vehicle types to electric by 2025 and 50 percent by 2030.

• Convert 10 percent total jet fuel to blended sustainable aviation fuel by 2030.

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Mary Schlangenstein and Charlotte Ryan | May 16, 2022

an ESG Subcommittee to the Governance and Nominating Committee to ensure the Board is aware of JetBlue’s ESG strategy and has a comprehensive understanding of ESG matters.

ARTICLE JetBlue Goes Hostile With Reduced $3.3 Billion Spirit Bid

JetBlue also linked, for the frst time, key ESG targets to its senior leaders’ long term incentive plan (LTIP) compensation.

JetBlue Airways Corp. made a hostile $3.3 billion cash bid for Spirit Airlines Inc., appealing directly to shareholders in an efort to prevail over a rival ofer for the discount carrier by Frontier Group Holdings Inc. The JetBlue proposal is worth $30 a share, $3 less than its initial approach, which was spurned by Spirit’s board two weeks ago. The New York-based company said Monday it will pay the higher price should a “consensual transaction” be agreed. JetBlue’s latest ofer is a 77% premium to the value of Spirit’s closing price on Friday. Spirit shares climbed 8.4% to $18.40 at 9:35 a.m. in New York. JetBlue shares fell 2.5% and Frontier rose 4%. “This signals that the original JetBlue ofer was a serious one, as opposed to one just trying to scuttle the Spirit-Frontier deal,” said Savanthi Syth, a Raymond James Financial Inc. analyst. The move marks the latest twist in the takeover tussle for Miramar, Florida-based Spirit.

JetBlue For Good is JetBlue’s platform for social impact and corporate responsibility –Combining JetBlue’s corporate eforts with its customers’ and crewmembers’ passions, the common theme is Good JetBlue For Good. Giving back is part of JetBlue’s DNA and is core to its mission of inspiring humanity. Centered on volunteerism and service, JetBlue For Good focuses on the areas that are most important to the airline’s customers and crewmembers community, youth/education and the environment.

JetBlue believes in communicating transparently about climate change. The airline is commit ted to taking steps to address the emission of greenhouse gases (GHGs) from its fights and JetBlue empowers and inspires its customers and crewmembers to ofset GHG emissions when they fy. The airline is constantly looking for ways to enhance the sustainability of its travel through more fuel efcient technologies, increasing its usage of sustainable aviation fuel, and supporting the next generation of alternative energy aircraft.

GOLD STUDENT CASE STUDY JETBLUE

Letter to Shareholders

GOLD STUDENT CASE STUDY JETBLUE

He said the combination would in turn create “a true national low-fare competitor” to big four US carriers American Airlines Group Inc., Delta Air Lines Inc., United Airlines Holdings Inc. and leading discounter Southwest Airlines Co. A Frontier-Spirit Airlines combination, though not so big, would create the largest US deep discounter just as domestic leisure travel bounces back from the Covid-19 pandemic. Under the Frontier deal, investors in Spirit would receive 1.9126 Frontier shares and $2.13 in cash for each Spirit share. Frontier shareholders would own 51.5% of the combined company.

Hayes also sought to justify the bid in a letter to his own employees, saying that “by voting against the Frontier merger, Spirit shareholders can push the Spirit board back to the table to give us the information we need and negotiate a merger agreement with us, perhaps at our original price.”

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Spirit rejected JetBlue’s earlier unsolicited $3.6 billion proposal over concerns that antitrust issues would stop it from being consummated, and stuck with its agreement to be acquired by Denver-based Frontier for $2.9 billion. Spirit and Frontier didn’t immediately respond to requests for comment.

JetBlue is banking on the acquisition as its best shot at near-term growth, even though the deal would mean combining its own full-service product with a model based around ofering rock bottom prices and charging for every extra.

Spirit management’s proposed deal with Frontier, which includes stock, is “high risk and low value,” JetBlue said in a statement, urging investors to reject it at a meeting scheduled for June 10.

Spirit has said JetBlue’s bid could by compromised by a federal lawsuit against its alliance with American Airlines in the northeast US, and that its board didn’t consider fnancial details after determining it had little chance of gaining regulatory approval. Claims that the antitrust lawsuit against the Northeast Alliance with American could be a factor in the takeover bid “has no basis in fact or in law,” JetBlue said.

JetBlue set up a website -- www.JetBlueOfersMore.com -- and issued a letter to Spirit shareholders as part of its attempt to derail the Frontier deal, with Chief Executive Ofcer Robin Hayes arguing that his own proposal ofers more value, more certainty and more benefts for all stakeholders.

JetBlue took aim at Spirit’s links to Bill Franke, the self-proclaimed father of ultradiscounting whose Indigo Partners owns the majority of Frontier’s shares. Franke, who serves as Frontier’s chairman, led Spirit’s conversion to an ultradiscounter about 15 years ago, and in 2013 used proceeds from selling Indigo’s 17% stake in Spirit to purchase Frontier out of

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that JetBlue Airways does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of JetBlue Airways, (below). Of course, keep in mind that there are other factors to consider, too. Investors should note that institutions actually own more than half the company, so they can

ARTICLE What Is The Ownership Structure Like For JetBlue Airways Corporation? May 23, 2022

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bankruptcy and convert that carrier to the ultra-low-cost model.

Spirit’s board “is prioritizing its own self-interest and personal relationships with Frontier over its shareholders’ interests,” JetBlue claimed.

What Does The Institutional Ownership Tell Us About JetBlue Airways?

GOLD STUDENT CASE STUDY JETBLUE

Every investor in JetBlue Airways Corporation (NASDAQ:JBLU) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. We also tend to see lower insider ownership in companies that were previously publicly owned. With a market capitalization of US$3.3b, JetBlue Airways is rather large. We’d expect to see institutional investors on the register. Companies of this size are usually well known to retail investors, too. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let’s take a closer look to see what the diferent types of shareholders can tell us about JetBlue Airways.

A Spirit deal would give JetBlue, hounded by Wall Street analysts for much of its 23-year history over cost creep, access to an organization and management team highly focused on keeping operating expenses in check. JetBlue lost out in its only other takeover attempt when it was outbid by Alaska Air Group Inc. for Virgin America in 2016.

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General Public Ownership

Insider Ownership Of JetBlue Airways

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difcult for other shareholders to hold the board accountable for decisions.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the Whileownership.studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock’s expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

The general public, who are usually individual investors, hold a 20% stake in JetBlue Airways. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large

shareholders.GOLDSTUDENT CASE STUDY JETBLUE

While the precise defnition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Our data suggests that insiders own under 1% of JetBlue Airways Corporation in their own names. It’s a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own US$11m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

132 collectively wield signifcant power. We note that hedge funds don’t have a meaningful investment in JetBlue Airways. FMR LLC is currently the company’s largest shareholder with 12% of shares outstanding. In comparison, the second and third largest shareholders hold about 9.1% and 8.0% of the stock.

Now what It’s hard to say for sure what outcome JetBlue shareholders should be hoping for. In one sense, the Spirit deal is perhaps the clearest avenue for growth on the horizon for JetBlue, and there are no obvious alternative acquisition targets to pursue should Spirit combine with Frontier. But JetBlue is ofering a hefty price -- a premium of more than 50% to Spirit’s current share price. And because JetBlue is ofering all cash, there is a real risk it is spreading itself thin in

Though JetBlue ofered a premium price, Spirit has remained faithful to Frontier due to the target’s perception that a Frontier/Spirit deal would face an easier time winning regulatory approval than a tie up between Spirit and JetBlue. JetBlue in response has gone directly to Spirit shareholders, urging them to vote against the planned Frontier deal and instead tender their shares to JetBlue. On Thursday, Spirit reiterated its allegiance to Frontier. The airline said its board determined the JetBlue ofer is not in the interest of shareholders because of the “substantial regulatory hurdles” JetBlue would face. JetBlue responded with a statement criticizing the Spirit board, which it says, “continues to ignore the best interests of its shareholders by distorting the facts to distract from their fawed process and protect their inferior deal with Frontier.”

GOLD STUDENT CASE STUDY JETBLUE

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 133 ARTICLE Why JetBlue Shares Are Up Today By Lou Whiteman | May 19, 2022

So what Spirit and Frontier announced plans to merge back in February, but in April JetBlue stepped in with its own ofer to acquire Spirit. The airline industry is facing a shortage of pilots, which limits growth opportunities, and both Frontier and JetBlue are hoping to use mergers and acquisitions to bulk up.

On Friday, Spirit Airlines reiterated its support for its deal with Frontier and urged investors to reject JetBlue’s rival ofer.

Spirit is the most obvious near-term path to generate growth for JetBlue, but the proposal comes with a lot of risk. JetBlue is urging Spirit shareholders to force the board’s hand by rejecting the Frontier proposal. What happened Spirit Airlines (SAVE 3.15%) has once again rebuked a takeover overture from JetBlue Airways (JBLU 2.62%), despite JetBlue’s willingness to pay a higher price than Spirit merger partner Frontier Group Holdings (ULCC 1.13%). JetBlue investors appear pleased with the develop ment, sending shares of the airline up 5% on Thursday afternoon.

By Aditya Raghunath 6, 2022

Today I’ll analyze and compare American Airlines (AAL Get Rating) and JetBlue Airways (JBLU Get Rating) to determine which airline stock is currently a better investment.

American Airlines In Q4 of 2021, American Airlines reported revenue of $9.43 billion, compared to $4.03 billion in the year-ago period. However, it was still down 17% compared to the same period in 2019.

134 an uncertain economic climate where fuel and labor costs are soaring and consumer infation threatens to eat into demand.

On Thursday, at least, investors appear not to be too bothered by the prospects of Spirit ending up with Frontier. For investors that might mean anemic growth for the next few years. But it is defnitely also the safer path forward from here.

ARTICLE American Airlines vs. JetBlue: Which Stock Is a Better Buy?

| Apr

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Running an airline is a capital-intensive business which means companies have to raise debt to fund expansion plans. However, it is extremely difcult to make interest payments when revenue decelerates to a trickle. So, to keep operations running, airline companies may either restructure debt or raise equity capital, which burdens its fnancials or dilutes shareholder wealth.

While capacity declined by 13% in Q4, its unit revenue was down 4.2% due to cost pressures such as high fuel prices and rising interest expenses.

AAL Airline stocks such as American Airlines (AAL) and JetBlue (JBLU) have trailed the broader markets in the last year. The two companies are expected to report losses in 2022 due to lower capacity, higher unit costs, and macro-economic uncertainty.

American Airlines reported a pre-tax loss of $1.18 billion while its adjusted loss per share stood at $1.42 in Q4 of 2021. The company is expected to lose money in Q1 of 2022 as well, due to seasonal weakness coupled with the impact of

Omicron.GOLDSTUDENT CASE STUDY JETBLUE

After a tumultuous 24 months due to the coronavirus, the world is slowly limping back to normalcy. The pandemic decimated various companies, sectors, and economies, as borders were shut and lockdowns were imposed all over the world. The airline industry was among the worst-performing ones in the last two years, as travel came to a standstill.

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In Q1 of 2022, JetBlue estimates revenue to fall between 11% and 16% compared to the same period in 2019. Additionally, unit cost infation might increase by double digitals relative to 2019. The verdict Shares of American Airlines might seem attractive, especially given its forecast to report adjusted earnings between $4 and $6 per share with $50 billion in sales by 2024. However, the company has repeatedly missed consensus estimates in recent years. American Airlines also ended 2021 with a debt balance of $46 billion which includes lease liabilities. It would take the company multiple years of consistent profts to de-leverage its balance sheet.

While American Airlines is trading near consensus price target estimates, JetBlue Airways is trading at a 20% discount to 12-month average price targets right now. Further, its lower debt levels and narrower losses, make JetBlue a better bet.

GOLD STUDENT CASE STUDY JETBLUE

JetBlue In October 2021, JetBlue warned investors its revenue might decelerate in Q4 on a sequential basis due to delayed business travel recovery. These concerns were exacerbated when the Omicron variant was detected which led to the cancellation of travel plans and crew-related shortages. In Q4 of 2021, JetBlue saw its sales fall by almost 10% compared to Q4 of 2019, which was in line with its initial guidance. This allowed JetBlue to end the quarter with an adjusted EBITDA of $31 million which was again near the high end of management guidance. Comparatively, its adjusted net loss stood at $0.36 per share.

On the other hand, while still unproftable, JetBlue is on track to narrow its losses from $2.51 per share in 2021 to $0.18 per share in 2022. The competition in the airline sector is bound to gain momentum in the upcoming years. Budget airline companies such as JetBlue plowed in capital to expand their feets amid COVID-19 to gain market share on the rebound.

American Airlines has forecast its top-line to decline between 20% and 22% compared to Q1 of 2019 which might result in a pre-tax loss of over $2 billion.

Computer Science/Information Technology Corporate Business/Law

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Finance & Financial

If you’re a student or recent graduate, your fnance skills will help you get hired for these professions. Read on to learn about some of the top jobs for college graduates with a fnance degree.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 136 SESSION 5 BONUS Finance Financial Planning & Services Banking & Financial Support Services Investments & Securities Public Finance International Finance Financial Risk Management MBA Business FinTech Economics Accounting Financial Engineering Engineering/Mathematics/Statistics/Physics

If you’re intrigued by the fnancial markets, stocks, bonds, and other investment vehicles, and you also like to think about numbers, then a fnance major is worth considering.

Top Skills Finance Majors Have Finance majors develop analytical skills in order to dissect fnancial statements and appraise the fnancial standing of companies, municipalities, and other entities. They can assess the quantitative and qualitative dimensions of business problems and evaluate the fnancial implications of corporate and individual actions.

Graduates with a degree in fnance also acquire the ability to deal with spreadsheets and with other software used to process and represent fnancial data. They learn to present fnancial information to of Management Degree Options Best Jobs for Graduates With a Finance Degree Career Options for Finance Majors BY MIKE PROFITA

ARTICLE

Updated on March 15, 2021GOLD STUDENT BONUS ARTICLE

Financial planners must crunch numbers and apply principles of accounting in order to devise plans suitable for individual investors. They also need to inspire trust in people and promote their services. Therefore, fnance majors with strong interpersonal skills and persuasive abilities will be most likely to succeed in this profession.

Top 10 Jobs for Finance Majors

Salary and Employment Outlook: According to the Bureau of Labor Statistics (BLS), personal fnancial advisors earn an average salary of $87,850, and jobs are predicted to expand at a rate of 4% through 2029.

Here are some options to consider as you explore careers related to a fnance degree.

Salary and Employment Outlook: According to the BLS, fnancial analysts earn an average salary of $81,590, and jobs are predicted to grow at a faster than average rate of 5% through 2029.

Investor relations professionals must digest, interpret, highlight, and present information from fnancial statements.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM

137 clients and colleagues with varying levels of fnancial sophistication. An academic background in fnance can be applied to a broad range of careers in virtually every industry. Before arriving at a fnal career direction, consider your unique combination of skills, interests, values, and personality traits.

Best jobs for fnance degree majors

1. Financial Planner Finance majors learn about a variety of investment vehicles, and this knowledge can help fnancial planners to advise clients about how to manage their fnances. Finance majors can decipher trends in the securities markets and apply this perspective to their planning sessions.

2. Financial Analyst Financial analysts research stocks, bonds, companies, and industries to assist bankers, investors, and corporate fnance ofcers with mergers, acquisitions, and stock/bond oferings, as well as corporate expansions and restructuring. They can capitalize on their fnance major training as they dissect fnancial statements and other fnancial data.

Financial analysts build fnancial models and conduct complex quantitative analyses. Financial analysts also produce reports detailing their fndings and present their analyses to other members of the banking or fnance team.

3. Investor Relations Associate Finance majors with strong writing, organizational, and communication skills can thrive in this role. Investor relations professionals prepare and present fnancial information about their company or corporate clients to investors, analysts, and business media.

GOLD STUDENT BONUS ARTICLE

5. Actuary Actuaries play a leadership role in fnancially oriented businesses such as insurance, banking, rating agencies, and accounting frms. The fnance graduate with strong mathematical skills is ideally positioned to calculate the likelihood of various events and to assess the fnancial consequences for those outcomes. Just like the fnance major, actuaries manipulate software to perform calculations and represent their fndings. They present their recommendations to managers at their frm and convince others of the soundness of their decisions.

4. Budget Analyst Budget analysts apply principles of fnance to projects and proposals in the business, educational, governmental, and not-for-proft sectors. They analyze budgets and evaluate the fnancial impact of continuing ventures and new ventures.

6. Accountant

Finance majors learn to construct, interpret, and critique fnancial statements while completing the accounting component of their studies. Thus, they become capable of carrying out complex accounting work in fnancially oriented industries.

Salary and Employment Outlook: According to the BLS, actuaries earn an average salary of $108,350, and jobs are predicted to grow at a much faster than average rate of 19% through 2029.

The analytical and software tools developed through their fnance major training facilitate this

Salary and Employment Outlook: According to the BLS, budget analysts earn an average of $76,540, and jobs are predicted to grow by about 3% through 2029.

Students of fnance develop a number of accountancy skills as they learn to analyze business problems with precision and attention to detail, which prepares them for the world of accounting. Just like accountants, fnance majors learn to present fnancial information to clients and colleagues by using charts, graphs, and other visual aids.

Entry-level accounting jobs can be gateway jobs leading to corporate fnancial management positions, or leadership positions with non-profts and government agencies.

Salary and Employment Outlook: According to the BLS, accountants earn an average salary of $71,550, and jobs are predicted to grow at a rate of 4% through 2029.

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Salaryprocess.and

Budget analysts must have refned communication skills because they interview managers in order to gather information for proposals. They also train staf regarding the budget development processes for their organization. Finance majors develop the essential analytical and communication skills needed to become a successful budget analyst.

Employment Outlook: According to PayScale, early-career investor relations associates earn an average salary of $61,076.

7. Credit Analyst Credit analysts evaluate the fnancial standing of loan prospects and assess the risks involved with ofering them fnancing. Finance majors learn to appraise the fnancial viability of entities and interpret their fnancial records and data. The investigative mindset of a fnance major would enable the credit analyst to scrutinize the legitimacy of fnancial information furnished by clients.

Salary and Employment Outlook: According to the BLS, lawyers earn an average salary of $122,960, and jobs are predicted to grow by about 4% through 2029.

Finance majors with strong verbal skills and a sales orientation should consider a career as a commercial real estate agent. Commercial real estate agents analyze the business plans and fnancial status of clients in order to recommend appropriate spaces for their enterprises.

When listing a property, brokers must estimate the value of the property based on its fnancial potential for prospective buyers. Agents advise clients about options for fnancing property acquisitions and launching new businesses.

Salary: According to PayScale, business teachers earn an average salary of $41,654.

10. Business Teacher

Finance majors analyze trends in industries that can impact the ability of organizations to generate the income necessary to repay loans. They have the communication skills necessary for credit analysts to extract information from prospective clients and convey their analyses to colleagues.

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM 139GOLD STUDENT BONUS ARTICLE

Finance majors hone the communication and presentation skills that are essential to the teaching profession. Business teachers tap a broad knowledge of business as they instruct high school students about the fundamentals of accounting, management, marketing, and investments.

Salary: According to PayScale, commercial real estate agents earn an average salary of about $42,500.

Salary: According to the BLS, credit analysts earn a median salary of $73,650.

Research and analytical skills developed by fnance majors enable attorneys to prepare their cases. Presentation skills and knowledge of presentation software help attorneys to deliver arguments and prepare exhibits.

9. Commercial Real Estate Agent

Finance majors with a curiosity about the business world and an enthusiasm for business issues are well suited for this role. Individuals who earn advanced degrees in business can also pursue teaching jobs at junior and four-year colleges.

8. Attorney Lawyers in many areas of practice, including divorce, product liability, civil litigation, corporate, labor, and securities law, beneft from a knowledge of fnance. Attorneys who investigate fnancial irregularities must read and understand fnancial statements. Lawyers in civil cases need the skills to estimate appropriate compensation for settlements.

Rock The Street, Wall Street website • www.rockthestreetwallstreet.com

GOVERNMENT

GOLD STUDENT WORKBOOK | WWW.ROCKTHESTREETWALLSTREET.COM # GOLD STUDENT INTRODUCTION

So Money with Farnoosh Torabi • www.podcast.farnoosh.tv

Career Girls • www.careergirls.org Girls Who Invest • www.girlswhoinvest.org

Rock The Street, Wall Street LinkedIn Page • www.linkedin.com/company/rock-the-street-wall-street

Investopedia • www.investopedia.com Yahoo! Finance • fnance.yahoo.com

WEBSITES

Janet Yellen • www.home.treasury.gov/about/general-information/ofcials/janet-yellen Gender Policy Council • www.whitehouse.gov/gpc Women in Public Finance • www.wpfc.com/

RESOURCES GOLD STUDENT RESOURCES140

Napkin Finance • www.napkinfnance.com

RTSWS Internship & Job Portal • www.rockthestreetwallstreet.com/internship-job-portal

The College Investor • www.thecollegeinvestor.com/audio-show

The Fairer Cents: Women, Money and the Fight to Break Even • www.thefairercents.com NPR’s Planet Money • www.npr.org/sections/money

HERMONEY • www.hermoney.com/t/podcasts Money Nerds • www.themoneynerds.com

PODCASTS

MAKE SURE YOU DO THE FOLLOWING: • Register for RTSWS Spring Mentorship * Share with us any job shadowing / internship opportunities or job ofers you may receive. Whether it is this year or any following years, we always want to share in your success! • Join the Rock The Street, Wall Street Student and Financial Pro Networking Group | www.linkedin.com/groups/7029520/ • Check out our RTSWS Internship & Job Portal www.rockthestreetwallstreet.com/internship-job-portal • Check out resources on our RTSWS Connects page for students and alumnae | rockthestreetwallstreet.com/students-alumnae/ • Tell us your Student Story! We want to hear from you! Email us at: programs2@rockthestreetwallstreet.com CONGRATS! You successfully completed the Rock The Street, Wall Street Program! GIRLSROCKFINANCE

RTSWS GOLD STUDENT CURRICULUM 2022

Articles inside

ARTICLE: Careers in Finance

American Airlines vs. Jetblue

Lululemon vs. Nike

Group Refection

Bonus Material

Group Presentations

Post-Assessment

Think About It

New Investment Key Terms

Welcome & Norms

Agenda

Project: Financial Analysis for Janella

Bonus Material

Case Study

New Investment Key Term

Welcome & Norms

Agenda

Agenda

Bonus Material

Case Study

Welcome & Norms

Project: Financial Planning for Janella

Key Terms

Case Study

Cohort Norms

Pre-Assessment

Welcome & Norms

Agenda

Agenda

Yahoo! Finance