2024 – Competencies In this project you will demonstrate your mastery of the following

 

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 are a financial analyst for the chosen business that you selected  during your Module Two Journal assignment. Your supervisor has  discovered last minute that your business’s board of directors is  looking for updates on the business’s financial health. Your supervisor  has asked you to write a report regarding the business’s current  financial health and the available financial options for improving the  business. You’ve also been asked to make recommendations as to which  options the business should choose to best support its financial health.  Your supervisor will then use your report to present to the business’s  board of directors, whose members all have varying levels of knowledge  in terms of finance.

Directions

Using the business you chose from the Project Two Business Options  List, create a report for your supervisor to share with the board of  directors during their presentation. Keep in mind that your report needs  to be easy for someone unfamiliar with finance to understand, as not  all of the board members for your business fully understand finance.

Using Mergent Online, locate the most recent quarterly financial  statements for your chosen company, and use these statements to support  your analysis throughout the project. Refer to the Project Two Financial  Assumptions document located in the Supporting Materials section for  the assumptions you need in order to analyze the three available  financial options outlined in the Financial Analysis section of the  project directions.

You are encouraged to use the Project Two Financial Analyst Report  template located in the What to Submit section to help complete this  project.

Specifically, you must address the following:

1. Financial Analysis: In this section of the report,  you will use the most recent quarterly financial statements for your  chosen business and the Project Two Financial Formulas spreadsheet  (located in the What to Submit section) to calculate appropriate  financial formulas for assessing the business’s financial health. You  will also analyze all three available financial options for improving  the business based on your calculations and the provided Project Two  Financial Assumptions document.
   1. Financial Calculations: Calculate accurate  financial formulas to assess the business’s current financial health.  Specifically, 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
   2. Working Capital Management: Explain the impact of working capital management on the business’s operations. Provide examples to support your claims.
   3. Bond Investment: Analyze the risks and benefits of  the business choosing to invest in a corporate bond, including the  necessary ethical considerations, appropriate calculations, and examples  to support your analysis.
   4. Capital Equipment: Analyze the risks and benefits  of the business choosing to invest in capital equipment, including the  necessary ethical considerations, appropriate calculations, and examples  to support your analysis.
   5. Capital Lease: Analyze the risks and benefits of  the business choosing to purchase a capital lease, including the  necessary ethical considerations, appropriate calculations, and examples  to support your analysis.
2. Financial Evaluation: In this section of the  report, you will evaluate the three available financial options for the  business and recommend which option(s) are the best for the business to  choose.
   1. Financing: Explain how a business finances its operations and expansion.
   2. Bond Investment: Assess the appropriateness of a  bond investment as a financing option for the business’s financial  health, using your financial analysis and other financial information to  your support claims.
   3. Capital Equipment: Assess the appropriateness of a  capital equipment investment as a financing option for the business’s  financial health, using your financial analysis and other financial  information to support your claims.
   4. Capital Lease: Assess the appropriateness of a  capital lease purchase as a financing option for the business’s  financial health, using your financial analysis and other financial  information to support your claims.
   5. Short-Term Financing: Explain how potential  short-term financing sources could help the business raise needed funds  for improving its financial health. Base your response on the business’s  current financial information.
   6. Future Financial Considerations: Describe the  business’s likely future financial performance based on its current  financial well-being and risk levels. Use financial information to  support your claims.
3. Financial Recommendations: In this section of the  report, you will recommend which financing option(s) are the best for  the business to choose depending on its financial health.
   1. Financial Recommendation(s): Recommend the most  appropriate financing option(s) based on the business’s financial  health, including a rationale for why the option(s) are best.

What to Submit

To complete this project, you must submit the following:

Financial Analysis Report
Submit your completed  report as a 3- to 5-page Word document with 12-point Times New Roman  font, double spacing, and one-inch margins. Or, you may use the provided  Project Two Financial Analyst Report template if you so choose to help you complete your report.

You will also need to submit the Excel files for your chosen  business’s balance sheet, income statement, and cash flow statement from  Mergent Online.

Spreadsheet: Project Two Financial Formulas
Use  this Excel spreadsheet to complete your calculations for the project.  You should have already completed parts of the spreadsheet for your  Project Two Milestone assignment.

All sources, including your Project Two Financial Formulas spreadsheet, should be cited according to APA style.

Supporting Materials

The following resources support your work on the project:

Document: Project Two Financial Assumptions
Use this document to help you complete this project.

Document: Project Two Business Options List
Use this document to select your chosen 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.

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.