Evaluation of Corporate Performance The Final Paper will involve applying the concepts learned in class to an analysis of a company using data from its annual report.
Evaluation of Corporate Performance
Using the concepts from this course, you will analyze the strengths and weaknesses of the company and write a report either recommending or not recommending the purchase of the company stock.
Research Tip: The Mergent database in the Ashford University Library contains company profiles and financial information for publicly traded companies and their competitors. To access this database enter the Ashford Library and select Find Articles and More in the top menu panel. Next, select Databases A-Z and go to section M for Mergent. For help with using Mergent, use Mergent Online Quick Tips.
For help with reading annual report access this handy guide (Links to an external site.)Links to an external site. from Money Chimp.
The completed report should include:
An introduction to the company, including background information.
Pro Forma financial statements (Balance Sheet and Income Statement) for the next fiscal year, assuming a 10 percent growth rate in sales and Cost of Goods Sold (COGS) for the next year.
Complete ratio analysis for the last fiscal year using at least two ratios from each of the following categories:
Liquidity
Financial leverage
Asset management
Profitability
Market value
Debt
Per-Share
Measures of relative value (P/E, P/B)
Activity
Cash Flow
A calculation of Return on Equity (ROE) using the DuPont system.
A synopsis of your findings, including your recommendations and rationale for whether or not to purchase stock from this company.
Evaluate the financial risks associated with operating internationally. If your chosen company does not operate internationally, evaluate what the financial risks could be if they were to expand internationally.
How Illiquidity different from insolvency? Show each scenario using two separate balance sheets for a commercial bank.
What is fractional reserve banking? Draw a balance sheet of a bank that engages in fractional reserve banking.
Create an example involving 4 separate banks and 4 separate people that depicts the money creation process inherent in fractional reserve banking through balance sheets. Assume that the initial injection of cash worth $500 is made by the first person in the first bank and that each bank maintains a 10% reserve ratio.
Draw a balance sheet for New Bank, which started its first day of operations with $6 million in capital. A total of $100 million in checkable deposits is received. The bank makes a $25 million commercial loan and lends another $25 million in mortgage loans. Required reserves are 8%.
The bank you own has the following balance sheet: Reserves: 50 million, Deposits: $500 million, Bank Borrowings: $25 million, Securities: $125 million, Loans: $400 million. Draw a balance sheet for this bank and calculate this bank’s capital or equity. What is the reserve ratio that this bank keeps?
Explain the argument that asymmetric information between depositors and bank managers justifies the need for an institution such as the FDIC.
What are open market operations? Explain how an open market purchase works. Now show the impact of an open market purchase of $500 million worth of bonds by the Fed on the balance sheets of the banking system. Assume a reserve ratio of 10%.
Now show the impact on the money supply of an open market sale by the Fed on the banking system worth $200 million, assume a reserve ratio of 8%.
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(example energy efficient boilers, heat pumps etc). Is there a real problem, can the company be successful. Key influencer for the customer. Is market large, bargaining power of suppliers. Recommendations for the business to be successful. Incentives are policy tools that sway purchase, retail stocking, and production decisions toward energy-efficient products. Incentives complement mandatory standards and labeling policies by accelerating market penetration of products that are more energy efficient than required by existing standards and by preparing the market for more stringent future mandatory requirements.
For this assignment, you will plan for an audit of the financial statements with a focus on revenue. First, identify the relevant business cycles that are related in accounting. Include a brief description of each business cycle. For the revenue cycle, include following the audit objectives that you feel are the most relevant and that you will use in accordance with management assertions:
Existence
Completeness
Accuracy or valuation
Rights and obligations
Presentation and disclosure
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Pro-forma Income Statement and Balance Sheet on United Parcel Service (UPS)
Based on your sales forecast, develop a simplified Pro-forma income statement and balance sheet and briefly discuss areas of importance. An abbreviated Pro-forma Income Statement and Balance Sheet are needed. You do not need to encompass all the variables but rather show sales, cost of goods sold or cost of services provides, and fixed costs. Other noteworthy items can be included if they are
significant. All references must be listed on the reference page
Use at least three (3) quality references Note: Wikipedia and other related websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length
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Explain or Compare and Contrast the five Currencies Explain, compare, and contrast the five “currencies” discussed in this chapter.
Explain or Compare and Contrast the five Currencies
Please be thorough and complete in your response. Your document should be a minimum of 500 words.
Your document will be in APA format using parenthetical citations to the textbook as well as two (02) other authoritative resources. Provide a References list at the end of your discussion board post. List all three (03) resources used in correct APA format.
Assignments of insufficient length or lacking the necessary parenthetical citations, References list, and/or authoritative resources will be penalized. Good luck with your written assignment. Please try to be thorough and complete.
Ensure that your assignment is complete, thorough, and in correct APA format. Upload only an MS Word document.
If the company wants to sell a new product that costs $43 wholesale while keeping the same markup structure, what will be the price of the new product? (Use the gross margin percentage and round final answer to 0 decimal places, e.g. 25,000.) Price of t
EXERCISE 3-25 (PART LEVEL SUBMISSION)
The following is Sandhill Company’s income statement for the past year.
Sales revenue $710,000
Cost of goods sold 426,000
Gross margin 284,000
Operating expenses 100,000 Operating income $184,000
Use at least three (3) quality references Note: Wikipedia and other related websites do not qualify as academic resources.
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Financial Institutions and Markets for Large Credit RAs, such as S&P, have come under increasing criticism in recent years for a number of reasons. First, the RAs maintain close relationships with the management of the companies they rate.
Financial Institutions and Markets for Large Credit RAs
These connections are characterized by frequent meetings, during which the RAs provide advice on actions companies should take to maintain current ratings. This practice fosters a familial atmosphere that interferes with independent, unbiased rating judgments. Furthermore, because the RAs are paid by the companies they rate, rather than the investors they are meant to protect, a clear conflict of interest exists.
Second, because the rating business is reputation based (why pay attention to a rating that is not recognized by others?), barriers to market entry are high and RAs are oligopolists (an oligopoly is a market dominated by just a few sellers). Thus, the RAs are somewhat immune to forces that apply to competitive markets and, to an extent, can set their rules.
Finally, in many instances, the debt markets (through lower bond prices) have recognized a company’s deteriorating the credit quality many months before a rating downgrade occurred. This fact has led many observers to suggest that, rather than rely on ratings, investors and regulators should use credit spreads to make judgments about credit risk. (Credit spreads reflect the difference in yields between interest rates on “safe” debt, such as Treasury securities, and rates on risky debt such as B-rated bonds.)
What do you think? To what extent are credit ratings valid? Do the criticisms of RAs have merit? Can the current credit rating system be improved? If so, how?
PLEASE MEET ALL THE REQUIREMENTS IN THE HIGHLIGHTED PORTION OF THE SCORING GUIDE.
Prepare a cash budget (4-5 pages) for a manufacturing company and a memo to new management (2-3 pages) that explains the purpose of a cash budget and its relationship to operational goals.
Introduction
This assessment will give you the opportunity to construct a complete budget for the manufacturing operations of a fictional company called the Spicer Corporation. In doing so, you will practice analyzing budget practices and techniques.
Demonstration of Proficiency
By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies through corresponding scoring guide criteria:
Competency 3: Apply appropriate budgeting techniques for planning, executing, and controlling.
Create a complete annual budget.
Competency 4: Apply quantitative models to create and manage budgets and forecasts and evaluate budget performance.
Create the sales budget.
Create the purchasing budget.
Create the payments budget.
Create the cash receipts budget..
Competency 5: Communicate in a manner that is professional and consistent with expectations for members of the business professions.
Communicate in a manner that is professional and consistent with expectations for members of the business professions.
Scenario
Cash budgets forecast cash needs to achieve operational goals, especially in terms of expected financing. For this assessment, you will act as a controller at a manufacturing company called the Spicer Corporation and your task will be to prepare a cash budget and an associated memo.
Your Role
You are a controller working for the vice president of finance at a manufacturing company called Spicer Corporation.
Requirements
The vice president has requested you create a cash budget (4–5 pages) for the coming year:
Use the Cash Budgeting Template [XLSX].
Include a supplement schedule for cash receipts for the coming year.
Assume management wants to maintain a minimum cash balance of $50,000.
When you complete the cash budget, include the component parts:
Sales budget.
Purchasing budget.
Payments budget.
Cash receipts budget.
In addition to the cash budget, the vice president has also requested that you prepare a memo to management (2–3 pages) that explains the purpose of a cash budget, its relationship to operational goals, and the process you performed to create it. As part of the memo, identify at least three key aspects of the current cash budget that management should note. For each key aspect, be sure to discuss how the overall cash budget will be impacted if there is a change in the expectation.
Use the Memo Template [DOC] to structure your memo.
Deliverable Format
Since the vice president of finance has requested these documents, you should make the cash budget and associated memo as clear, well-organized, and readable as possible. The vice president has requested the memo for management be 2–3 pages so that you have enough space to provide some scholarly and/or professional context.
Communication: Communicate in a manner that is scholarly, professional, and consistent with the needs and expectations of senior corporate leadership and other stakeholders. For this scenario, assume the vice president of finance expects original work, critical thinking, and scholarly sources. Your writing must be free of errors that detract from the overall message.
The memo is a professional document and should therefore follow the corresponding MBA Academic and Professional Document Guidelines, including single-spaced paragraphs.
Resources: Incorporate at least two resources that are scholarly and/or professional. So that your imaginary vice president of finance can locate more information about cash budgeting, include a reference page at the end of your report.
Budget length: According to template.
Memo length: Minimum of 2–3 pages, not including reference pages.
Font and font size: Times New Roman, 12 pt.
Faculty will use the scoring guide to review your
deliverable as if they were your immediate supervisor.
Review the scoring guide prior to developing and submitting your assessment.
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Large Credit Rating Agencies RAs Large credit rating agencies (RAs), such as S&P, have come under increasing criticism in recent years for a number of reasons.
Large Credit Rating Agencies RAs
First, the RAs maintain close relationships with the management of the companies they rate. These connections are characterized by frequent meetings, during which the RAs provide advice on actions companies should take to maintain current ratings. This practice fosters a familial atmosphere that interferes with independent, unbiased rating judgments. Furthermore, because the RAs are paid by the companies they rate, rather than the investors they are meant to protect, a clear conflict of interest exists.
Second, because the rating business is reputation based (why pay attention to a rating that is not recognized by others?), barriers to market entry are high and RAs are oligopolists (an oligopoly is a market dominated by just a few sellers). Thus, the RAs are somewhat immune to forces that apply to competitive markets and, to an extent, can set their rules.
Finally, in many instances, the debt markets (through lower bond prices) have recognized a company’s deteriorating the credit quality many months before a rating downgrade occurred. This fact has led many observers to suggest that, rather than rely on ratings, investors and regulators should use credit spreads to make judgments about credit risk. (Credit spreads reflect the difference in yields between interest rates on “safe” debt, such as Treasury securities, and rates on risky debt such as B-rated bonds.)
What do you think? To what extent are credit ratings valid? Do the criticisms of RAs have merit? Can the current credit rating system be improved? If so, how?
