Analyze financial and investment decisions that add value to the organization
Competencies
In this project, you will demonstrate your mastery of the following competencies:
Analyze financial and investment decisions that add value to the organization
Analyze financing options to maximize investor value
Scenario
You chose a business during your Module Two journal assignment. Imagine you are an analyst for that business. Your business’s board of directors wants updates on the business’s financial health. Your supervisor has asked you to write a report that includes the following:
The business’s current financial health
The available financial options for improving the business
Your recommendations about which options will support the business’s financial health
Your supervisor will present your report to the business’s board of directors. The board members have different levels of knowledge about finance. You must write the report so it is easy for all board members to understand.
Directions
Create a report for your supervisor to share with the board of directors during their presentation. Use the business you chose from the Project Two Business Options List. Use Mergent Online to find the most recent quarterly financial statements for your company. Use these statements to support your analysis during the project. Use the Project Two Financial Assumptions document for descriptions of the three financial options you will evaluate. Use the Project Two Financial Analysis Report template to complete this project.
Note: All documents and resources that are needed to complete this assignment are linked in the What to Submit and Supporting Materials sections.
Specifically, you must address the following rubric criteria:
Financial Analysis: For this section, you will start with calculating the financial formulas listed in Part A. Use the most recent quarterly financial statements from your chosen business and the Project Two Financial Formulas worksheet.
Financial Calculations: Accurately calculate financial formulas to figure out the business’s current financial health. You must calculate the following:
Working capital
Current ratio
Debt ratio
Earnings per share
Price/earnings ratio
Total asset turnover ratio
Financial leverage
Net profit margin
Return on assets
Return on equity
Working Capital Management: Explain the impact of working capital management on the business’s operations. Provide examples to support your claims.
Financing: Explain how a business finances its operations and expansion.
Short-Term Financing: Explain how potential short-term financing sources could help the business raise funds for improving its financial health. Base your response on the business’s current financial information.
Bond Investment: Discuss the risks and benefits of the business investing in a corporate bond. Include the necessary ethical factors, appropriate calculations, and examples to support your analysis. Use the Project Two Financial Assumptions document and the Bonds section of the Net Present Value (NPV) worksheet in the Project Two Financial Formulas workbook.
Capital Equipment: Discuss the risks and benefits of the business investing in capital equipment. Include the necessary ethical factors, appropriate calculations, and examples to support your analysis. Use the Project Two Financial Assumptions document and the Equipment section of the Net Present Value (NPV) worksheet in the Project Two Financial Formulas workbook.
Building: Discuss the risks and benefits of the business investing in a building. Include the necessary ethical factors, appropriate calculations, and examples to support your analysis. Use the Project Two Financial Assumptions document and the Building section of the NPV worksheet in the Project Two Financial Formulas workbook.
Financial Evaluation: In this section of the report, you will determine which of the three available investments are good financing options and describe the business’s likely future financial performance.
Bond Investment: Determine if the bond investment is a good financing option for the business’s financial health. Use your financial analysis and other financial information to your support claims.
Capital Equipment: Determine if the capital equipment investment is a good financing option for the business’s financial health. Use your financial analysis and other financial information to support your claims.
Building: Determine if the building investment is a good financing option for the business’s financial health. Use your financial analysis and other financial information to support your claims.
Future Financial Considerations: Describe the business’s likely future financial performance. Base your description on the business’s current financial well-being and risk levels. Use financial information to support your claims.
What to Submit
To complete this project, you must submit the following:
Financial Analysis Report
Submit your completed Project Two Financial Analysis Report.
You must also submit the Excel files for your chosen business’s balance sheet, income statement, and cash flow statement from Mergent Online.
Workbook: Project Two Financial Formulas
Use this Excel workbook to complete your calculations for the project. You should have already completed the Ratios worksheets for your Project Two Milestone assignment.
All sources should be cited according to APA style. This includes sources listed in your Project Two Financial Formulas workbook. Consult the Shapiro Library APA Style Guide for more information on citations.
Supporting Materials
The following resources support your work on the project:
Document: Project Two Financial Assumptions
This document contains descriptions of the three financial options you will evaluate.
Document: Project Two Business Options List
Use this document to select a business for this project.
Shapiro Library Resource: Mergent Online
Use this resource to help you complete this project.
Video: Mergent Online: Public Company Financials (4:46)
Watch this video from the Shapiro Library to learn more about how to access and use Mergent Online. This video shows information on the As Reported Currency page within the Company Financials tab. For the purposes of this course, however, the best way to see financial data is to click Standardized beneath the Company Financials tab. This will allow you to access the Standardized Annual Balance Sheet.
Shapiro Library FAQ: How Do I Cite a Company Profile From Mergent Online?
Use this resource to help answer any questions you have about citing from Mergent Online.
Project Two Rubric
Criteria Exemplary Proficient Needs Improvement Not Evident Value
Financial Analysis: Financial Calculations N/A Calculates accurate financial formulas to figure out the business’s current financial health (100%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include accurately calculating financial formulas to figure out the business’s current financial health (55%) Does not attempt criterion (0%) 6
Financial Analysis: Working Capital Management Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Explains the impact of working capital management on the business’s operations, providing examples to support the claims (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include explaining in more detail the impact of working capital management on the business’s operations or providing examples to support the claims (55%) Does not attempt criterion (0%) 8
Financial Analysis: Financing Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Explains how a business finances its operations and expansion (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include explaining in more detail how a business finances its operations and expansion (55%) Does not attempt criterion (0%) 8
Financial Analysis: Short-Term Financing Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Explains how potential short-term financing sources could help the business raise funds for improving its financial health, based on the business’s current financial information (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include explaining in more detail how potential short-term financing sources could help the business raise funds for improving its financial health, based on the business’s current financial information (55%) Does not attempt criterion (0%) 8
Financial Analysis: Bond Investment Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Discusses the risks and benefits of the business investing in a corporate bond, including the necessary ethical factors, appropriate calculations, and examples to support the analysis (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include discussing in more detail the risks and benefits of the business investing in a corporate bond, including the necessary ethical factors, appropriate calculations, and examples to support the analysis (55%) Does not attempt criterion (0%) 8
Financial Analysis: Capital Equipment Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Discusses the risks and benefits of the business investing in capital equipment, including the necessary ethical factors, appropriate calculations, and examples to support the analysis (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include discussing in more detail the risks and benefits of the business investing in capital equipment, including the necessary ethical factors, appropriate calculations, and examples to support the analysis (55%) Does not attempt criterion (0%) 8
Financial Analysis: Building Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Discusses the risks and benefits of the business investing in a building, including the necessary ethical factors, appropriate calculations, and examples to support the analysis (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include discussing in more detail the risks and benefits of the business investing in a building, including the necessary ethical considerations, appropriate calculations, and examples to support the analysis (55%) Does not attempt criterion (0%) 8
Financial Evaluation: Bond Investment Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Determines if the bond investment is a good financing option for the business’s financial health, using financial analysis and other financial information to support claims (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include determining if the bond investment is a good financing option for the business’s financial health, or using financial analysis and other financial information to support the claims (55%) Does not attempt criterion (0%) 9
Financial Evaluation: Capital Equipment Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Determines if the capital equipment investment is a good financing option for the business’s financial health, using financial analysis and other financial information to support claims (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include determining in more detail if the capital equipment investment is a good financing option for the business’s financial health, or using financial analysis and other financial information to support claims (55%) Does not attempt criterion (0%) 9
Financial Evaluation: Building Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Determines if the building investment is a good financing option for the business’s financial health, using financial analysis and other financial information to support claims (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include determining if the building investment is a good financing option for the business’s financial health, or using financial analysis and other financial information to support claims (55%) Does not attempt criterion (0%) 9
Financial Evaluation: Future Financial Considerations Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Describes the business’s likely future financial performance based on its current financial well-being and risk levels, using financial information to support claims (85%) Shows progress toward proficiency, but with errors or omissions; areas for improvement may include describing in more detail the business’s likely future financial performance based on its current financial well-being and risk levels, or using financial information to support claims (55%) Does not attempt criterion (0%) 6
Articulation of Response Exceeds proficiency in an exceptionally clear, insightful, sophisticated, or creative manner (100%) Clearly conveys meaning with correct grammar, sentence structure, and spelling, demonstrating an understanding of audience and purpose (85%) Shows progress toward proficiency, but with errors in grammar, sentence structure, and spelling, negatively impacting readability (55%) Submission has critical errors in grammar, sentence structure, and spelling, preventing understanding of ideas (0%) 8
Citations and Attributions Uses citations for ideas requiring attribution, with few or no minor errors (100%) Uses citations for ideas requiring attribution, with consistent minor errors (85%) Uses citations for ideas requiring attribution, with major errors (55%) Does not use citations for ideas requiring attribution (0%) 5
Total: 100%
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