Interested in a PLAGIARISM-FREE paper based on these particular instructions?...with 100% confidentiality?

Order Now

6016 assessment 2 • Calculate key financial ratios, operating cash flow, and the sustainable growth rate for a hypothetical company and use those calculations to evaluate the firm’s financial condition and performance. Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in sequence. By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment objectives: • Competency 1: Apply the theories, models, and practices of finance to the financial management of the firm. o Demonstrate the ability to complete a balance sheet, income statement, and cash flow statements. o Calculate operating cash flow. o Explain how operating cash flow compares to free cash flow. o Evaluate a firm’s overall financial condition and performance. Competency 4: Integrate financial analyses into general business management planning and decision making. o Demonstrate the ability to accurately calculate key financial ratios, including liquidity, activity, debt, and profitability. o Analyze a firm’s performance from both time-series and cross-sectional points of view. Competency Map Questions to Consider To deepen your understanding, you are encouraged to consider the question below and discuss it with a fellow learner, a work associate, an interested friend, or a member of the business community. What is the most important segment of a cash flow statement? Why? What common mistakes do organizations make when preparing or using the cash flow statement? What coaching might be needed to help nonfinance professionals understand the cash flow statement and its use? Resources Required Resources This following template will assist you in formatting and completing your assessment.: Financial Assessments Template [XLSX]. Suggested Resources The resources provided here are optional. You may use other resources of your choice to prepare for this assessment; However, you will need to ensure that they are appropriate, credible, and valid. They provide helpful information about the topics in this unit. The MBA-FP6016 – Finance and Value Creation Library Guide can help direct your research. The Supplemental Resources and Research Resources, both linked from the left navigation menu in your courseroom, provide additional resources to help support you. The following resources will provide assistance to complete the assessment. Assessment Problems – Helpful Tips. Excel Examples. The following text is designed to assist learners to master core concepts, solve financial problems, and analyze results. Boundless. (n.d.). Boundless finance. Retrieved from https://www.boundless.com/finance/textbooks/boundless-finance-textbook/ o Chapter 3, “Analyzing Financial Statements”, Note that Section 1 of this chapter covers balance sheets. Additional Resources for Further Exploration The following text is designed to assist learners to master core concepts, solve financial problems, and analyze results. Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2014). Corporate finance: Core principles and applications (4th ed.). New York, NY: McGraw-Hill. – Available from the bookstore o Read Chapter 2, “Financial Statements and Cash Flow,” pages 19–42. o Read Chapter 3, “Financial Statements Analysis and Financial Models,” pages 43–81. The text offers an introductory look at corporate finance. Welch, I. (2014). Corporate finance (3rd ed.). Retrieved from http://book.ivo-welch.info/ed3/ o Chapter 13, “From Financial Statements to Economic Cash Flows,” pages 386-430. Assessment Instructions Demonstrate your understanding of financial concepts by completing the following calculations related to Jones Inc. and then evaluating the firm’s financial condition and performance. To complete this assessment, use the information in the Financial Assessments Template, which is linked in the Resources under the Required Resources heading. Review the financial statements for Jones Inc. and the comparative financial ratios for the year-end review. Enter your calculations and written analysis directly into the template, and show or explain your work where appropriate. Problem 1. Calculate the firm’s 2015 financial ratios for liquidity, activity (asset management), leverage (debt), and profitability. Problem 2. Analyze the firm’s performance from both time-series and cross-sectional points of view using the key financial ratios provided in the template. Problem 3. Calculate the operating cash flow based on your review of the firm’s income statement. How does operating cash flow (OCF) compare to free cash flow (FCF)? Why is the free cash flow so meaningful to management and investors? Problem 4. Calculate the sustainable growth rate based on your calculations of return on equity (ROE) and assuming a 60 percent dividend-payout ratio. How can a company increase its sustainable growth rate? Problem 5. Evaluate the firm’s overall financial condition and performance based on your analysis and then address these questions: Is the company improving or deteriorating over this three-year period? How does your ratio analysis justify your interpretation?

6016 assessment 2

 

  • Calculate key financial ratios, operating cash flow, and the sustainable growth rate for a hypothetical company and use those calculations to evaluate the firm’s financial condition and performance.

Note: The assessments in this course build upon each other, so you are strongly encouraged to complete them in sequence.

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment objectives:

  • Competency 1: Apply the theories, models, and practices of finance to the financial management of the firm.
    • Demonstrate the ability to complete a balance sheet, income statement, and cash flow statements.
    • Calculate operating cash flow.
    • Explain how operating cash flow compares to free cash flow.
    • Evaluate a firm’s overall financial condition and performance.
  • Competency 4: Integrate financial analyses into general business management planning and decision making.
    • Demonstrate the ability to accurately calculate key financial ratios, including liquidity, activity, debt, and profitability.
    • Analyze a firm’s performance from both time-series and cross-sectional points of view.

Competency Map

Questions to Consider

To deepen your understanding, you are encouraged to consider the question below and discuss it with a fellow learner, a work associate, an interested friend, or a member of the business community.

  • What is the most important segment of a cash flow statement? Why?
  • What common mistakes do organizations make when preparing or using the cash flow statement?
  • What coaching might be needed to help nonfinance professionals understand the cash flow statement and its use?

Resources

Required Resources

This following template will assist you in formatting and completing your assessment.:

Suggested Resources

The resources provided here are optional. You may use other resources of your choice to prepare for this assessment; However, you will need to ensure that they are appropriate, credible, and valid. They provide helpful information about the topics in this unit. The MBA-FP6016 – Finance and Value Creation Library Guide can help direct your research. The Supplemental Resources and Research Resources, both linked from the left navigation menu in your courseroom, provide additional resources to help support you.

The following resources will provide assistance to complete the assessment.

The following text is designed to assist learners to master core concepts, solve financial problems, and analyze results.

  • (n.d.). Boundless finance. Retrieved from https://www.boundless.com/finance/textbooks/boundless-finance-textbook/
    • Chapter 3, “Analyzing Financial Statements”, Note that Section 1 of this chapter covers balance sheets.

Additional Resources for Further Exploration

The following text is designed to assist learners to master core concepts, solve financial problems, and analyze results.

  • Ross, S. A., Westerfield, R. W., Jaffe, J. F., & Jordan, B. D. (2014). Corporate finance: Core principles and applications (4th ed.). New York, NY: McGraw-Hill. – Available from the bookstore
    • Read Chapter 2, “Financial Statements and Cash Flow,” pages 19–42.
    • Read Chapter 3, “Financial Statements Analysis and Financial Models,” pages 43–81.

The text offers an introductory look at corporate finance.

  • Welch, I. (2014). Corporate finance (3rd ed.). Retrieved from http://book.ivo-welch.info/ed3/
    • Chapter 13, “From Financial Statements to Economic Cash Flows,” pages 386-430.
  • Assessment Instructions

Demonstrate your understanding of financial concepts by completing the following calculations related to Jones Inc. and then evaluating the firm’s financial condition and performance.

To complete this assessment, use the information in the Financial Assessments Template, which is linked in the Resources under the Required Resources heading. Review the financial statements for Jones Inc. and the comparative financial ratios for the year-end review. Enter your calculations and written analysis directly into the template, and show or explain your work where appropriate.

Problem 1. Calculate the firm’s 2015 financial ratios for liquidity, activity (asset management), leverage (debt), and profitability.

Problem 2. Analyze the firm’s performance from both time-series and cross-sectional points of view using the key financial ratios provided in the template.

Problem 3. Calculate the operating cash flow based on your review of the firm’s income statement.

  • How does operating cash flow (OCF) compare to free cash flow (FCF)?
  • Why is the free cash flow so meaningful to management and investors?

Problem 4. Calculate the sustainable growth rate based on your calculations of return on equity (ROE) and assuming a 60 percent dividend-payout ratio. How can a company increase its sustainable growth rate?

Problem 5. Evaluate the firm’s overall financial condition and performance based on your analysis and then address these questions:

  • Is the company improving or deteriorating over this three-year period?
  • How does your ratio analysis justify your interpretation?

 

Interested in a PLAGIARISM-FREE paper based on these particular instructions?...with 100% confidentiality?

Order Now