Principle of Finance Week 5-1 Assignment

9/26/21, 9:26 AM Module Five Activity Guidelines and Rubric - FIN-320-T1991 Principles of Finance 21EW1

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Module Five Activity Guidelines and Rubric

Overview

Working capital management is cri�cal to an organiza�on’s ability to meet its short-term obliga�ons. When proposing new projects

or investment ideas for corpora�ons, it is cri�cal to consider working capital red flags such as excess credit use by the business or a

low cash balance. Managing such issues early on can help corpora�ons acquire a compe��ve advantage in the marketplace.

Prompt

Using the business you selected for Project Two, complete the calcula�ons for determining working capital, and describe their

relevance in assessing financial health.

Specifically, you must address the following rubric criteria:

Financial Statement(s): Explain the various financial statement(s) needed to calculate a business’s working capital and how

each financial statement is used. Provide examples to support your claims.

Working Capital’s Role: Discuss how effec�ve working capital management supports a healthy business.

Working Capital Interpreta�on: Use the appropriate formula to calculate working capital, then discuss the business’s current

financial liquidity posi�on.

For example, does the business have sufficient working capital on hand to address bills to suppliers? Will there be

poten�al cash inflow at the end of the year?

Working Capital Management Direc�on: Discuss the current direc�on of the business regarding working capital

management.

Keep in mind that financial statements reflect a specific moment or period of �me and the value of the business’s

working capital during that period. To get a be�er understanding of the direc�on in which a business is going, use

the business’s balance sheets from Mergent Online to compare the business’s value today against its value from one

year ago.

Guidelines for Submission

Your submission should be a 2 to 3-page Word document with 12-point Times New Roman font, double spacing, and one-inch

margins. Any sources should be cited according to APA style.

Module Five Ac�vity Rubric

Criteria Proficient (100%) Needs Improvement (70%) Not Complete (0%) Value

Financial

Statement

Explains the various financial

statement(s) needed to

calculate a business’s

working capital and how

each statement is used

Shows progress toward

proficiency, but with errors

or omissions; areas for

improvement may include

explaining in more detail the

various financial statement(s)

needed to calculate a

business’s working capital

and how each statement is

Does not a�empt criterion 15



FIN-320-T1991 Principles of Finance 21EW1 TM

9/26/21, 9:26 AM Module Five Activity Guidelines and Rubric - FIN-320-T1991 Principles of Finance 21EW1

https://learn.snhu.edu/d2l/le/content/842676/viewContent/14795439/View 2/3

used

Working Capital’s

Role

Discusses how effec�ve

working capital management

supports a healthy business

Shows progress toward

proficiency, but with errors

or omissions; areas for

improvement may include

discussing in more detail

how effec�ve working

capital management

supports a healthy business

Does not a�empt criterion 20

Working Capital

Interpreta�on

Uses the appropriate formula

to calculate working capital

and discusses the business’s

current financial liquidity

posi�on

Shows progress toward

proficiency, but with errors

or omissions; areas for

improvement may include

discussing in more detail the

business’s current financial

liquidity posi�on or using the

appropriate formula to

calculate the working capital

Does not a�empt criterion 20

Working Capital

Management

Direc�on

Discusses the current

direc�on of the business

regarding working capital

management

Shows progress toward

proficiency, but with errors

or omissions; areas for

improvement may include

discussing in more detail the

current direc�on of the

business regarding working

capital management

Does not a�empt criterion 25

Ar�cula�on of

Response

Clearly conveys meaning

with correct grammar,

sentence structure, and

spelling, demonstra�ng an

understanding of audience

and purpose

Shows progress toward

proficiency, but with errors

in grammar, sentence

structure, and spelling,

nega�vely impac�ng

readability

Submission has cri�cal errors

in grammar, sentence

structure, and spelling,

preven�ng understanding of

ideas

20

Total: 100%

9/26/21, 9:26 AM Module Five Activity Guidelines and Rubric - FIN-320-T1991 Principles of Finance 21EW1

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