Principle of Finance Week 7 Assignment

10/9/21, 9:53 AM Project Two Guidelines and Rubric - FIN-320-T1991 Principles of Finance 21EW1

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Project Two Guidelines and Rubric

Competencies

In this project, you will demonstrate your mastery of the following competencies:

Analyze financial and investment decisions that add value to the organiza�on

Analyze financing op�ons 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 op�ons for

improving the business. You’ve also been asked to make recommenda�ons as to which op�ons 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.

Direc�ons

Using the business you chose from the Project Two Business Op�ons List, create a report for your supervisor to share with the

board of directors during their presenta�on. 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 Assump�ons document located in the Suppor�ng

Materials sec�on for the assump�ons you need in order to analyze the three available financial op�ons outlined in the Financial

Analysis sec�on of the project direc�ons.

You are encouraged to use the Project Two Financial Analyst Report template located in the What to Submit sec�on to help

complete this project.

Specifically, you must address the following:

1. Financial Analysis: In this sec�on 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 sec�on) to calculate

appropriate financial formulas for assessing the business’s financial health. You will also analyze all three available financial

op�ons for improving the business based on your calcula�ons and the provided Project Two Financial Assump�ons

document.

A. Financial Calcula�ons: Calculate accurate financial formulas to assess the business’s current financial health.

Specifically, you must calculate the following:

Working capital

Current ra�o

Debt ra�o

Earnings per share

Price/earnings ra�o

Total asset turnover ra�o

Financial leverage

Net profit margin



FIN-320-T1991 Principles of Finance 21EW1 TM

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Net profit margin

Return on assets

Return on equity

B. Working Capital Management: Explain the impact of working capital management on the business’s opera�ons.

Provide examples to support your claims.

C. Bond Investment: Analyze the risks and benefits of the business choosing to invest in a corporate bond, including

the necessary ethical considera�ons, appropriate calcula�ons, and examples to support your analysis.

D. Capital Equipment: Analyze the risks and benefits of the business choosing to invest in capital equipment, including

the necessary ethical considera�ons, appropriate calcula�ons, and examples to support your analysis.

E. Capital Lease: Analyze the risks and benefits of the business choosing to purchase a capital lease, including the

necessary ethical considera�ons, appropriate calcula�ons, and examples to support your analysis.

2. Financial Evalua�on: In this sec�on of the report, you will now determine if the three available financial op�ons in the

Project Two Financial Assump�ons document are appropriate for the business, considering the analysis you did in the first

sec�on. You will also explain financing and describe the business's likely future performance.

A. Financing: Explain how a business finances its opera�ons and expansion.

B. Bond Investment: Assess the appropriateness of a bond investment as a financing op�on for the business’s financial

health, using your financial analysis and other financial informa�on to your support claims.

C. Capital Equipment: Assess the appropriateness of a capital equipment investment as a financing op�on for the

business’s financial health, using your financial analysis and other financial informa�on to support your claims.

D. Capital Lease: Assess the appropriateness of a capital lease purchase as a financing op�on for the business’s financial

health, using your financial analysis and other financial informa�on to support your claims.

E. Short-Term Financing: Explain how poten�al 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 informa�on.

F. Future Financial Considera�ons: Describe the business’s likely future financial performance based on its current

financial well-being and risk levels. Use financial informa�on to support your claims.

3. Financial Recommenda�ons: In this sec�on of the report, you will recommend which financing op�on(s) are the best for the

business to choose depending on its financial health.

A. Financial Recommenda�on(s): Recommend the most appropriate financing op�on(s) based on the business’s financial

health, including a ra�onale for why the op�on(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 calcula�ons 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.

Suppor�ng Materials

The following resources support your work on the project:

Document: Project Two Financial Assump�ons

Use this document to help you complete this project.

Document: Project Two Business Op�ons List

Use this document to select your chosen business for this project.

Shapiro Library Resource: Mergent Online

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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. Although this video shows

informa�on on the ‘As Reported Currency’ page within the Company Financials tab, for the purposes of this course, the best op�on

for loca�ng financial data can be accessed by clicking on ‘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 ques�ons you have about ci�ng from Mergent Online.

Project Two Rubric

Criteria Exemplary Proficient Needs Improvement Not Evident Value

Financial Analysis:

Financial

Calcula�ons

N/A Calculates accurate

financial formulas to

assess the business’s

current financial

health (100%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include calcula�ng

more accurate

financial formulas to

assess the business’s

current financial

health (55%)

Does not a�empt

criterion (0%)

6

Financial Analysis:

Working Capital

Management

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Explains the impact

of working capital

management on the

business’s

opera�ons, providing

examples to support

the claims (85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include explaining in

further detail the

impact of working

capital management

on the business’s

opera�ons or the

examples provided

to support the claims

(55%)

Does not a�empt

criterion (0%)

6

Financial Analysis:

Bond Investment

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Analyzes the risks

and benefits of the

business choosing to

invest in a bond,

including the

necessary ethical

considera�ons,

appropriate

calcula�ons, and

examples to support

the analysis (85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include analyzing

more

comprehensively the

risks and benefits of

the business

choosing to invest in

a bond, including the

necessary ethical

considera�ons,

appropriate

Does not a�empt

criterion (0%)

8

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calcula�ons, and

examples to support

the analysis (55%)

Financial Analysis:

Capital Equipment

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Analyzes the risks

and benefits of the

business choosing to

invest in capital

equipment, including

the necessary ethical

considera�ons,

appropriate

calcula�ons, and

examples to support

the analysis (85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include analyzing

more

comprehensively the

risks and benefits of

the business

choosing to invest in

capital equipment,

including the

necessary ethical

considera�ons,

appropriate

calcula�ons, and

examples to support

the analysis (55%)

Does not a�empt

criterion (0%)

8

Financial Analysis:

Capital Lease

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Analyzes the risks

and benefits of the

business choosing to

purchase a capital

lease, including the

necessary ethical

considera�ons,

appropriate

calcula�ons, and

examples to support

the analysis (85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include analyzing

more

comprehensively the

risks and benefits of

the business

choosing to purchase

a capital lease,

including the

necessary ethical

considera�ons,

appropriate

calcula�ons, and

examples to support

the analysis (55%)

Does not a�empt

criterion (0%)

8

Financial

Evalua�on:

Financing

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Explains how a

business finances its

opera�ons 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

opera�ons and

expansion (55%)

Does not a�empt

criterion (0%)

7

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Financial

Evalua�on: Bond

Investment

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Assesses the

appropriateness of a

bond investment as a

financing op�on for

the business’s

financial health,

using financial

analysis and other

financial informa�on

to support the claims

(85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include assessing

more

comprehensively the

appropriateness of a

bond investment as a

financing op�on for

the business’s

financial health or

be�er using financial

analysis and other

financial informa�on

to support the claims

(55%)

Does not a�empt

criterion (0%)

8

Financial

Evalua�on: Capital

Equipment

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Assesses the

appropriateness of a

capital equipment

investment as a

financing op�on for

the business’s

financial health,

using financial

analysis and other

financial informa�on

to support the claims

(85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include assessing

more

comprehensively the

appropriateness of a

capital equipment

investment as a

financing op�on for

the business’s

financial health or

be�er using financial

analysis and other

financial informa�on

to support the claims

(55%)

Does not a�empt

criterion (0%)

8

Financial

Evalua�on: Capital

Lease

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Assesses the

appropriateness of a

capital lease

purchase as a

financing op�on for

the business’s

financial health,

using financial

analysis and other

financial informa�on

to support the claims

(85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include assessing

more

comprehensively the

appropriateness of a

capital lease

purchase as a

financing op�on for

the business’s

financial health or

be�er using financial

analysis and other

Does not a�empt

criterion (0%)

8

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financial informa�on

to support the claims

(55%)

Financial

Evalua�on: Short-

Term Financing

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Explains how

poten�al short-term

financing sources

could help the

business raise

needed funds for

improving its

financial health,

based on the

business’s current

financial informa�on

(85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include explaining in

further detail how

poten�al short-term

financing sources

could help the

business raise

needed funds for

improving its

financial health,

based on the

business’s current

financial informa�on

(55%)

Does not a�empt

criterion (0%)

7

Financial

Evalua�on: Future

Financial

Considera�ons

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Describes the

business’s likely

future financial

performance based

on its current

financial well-being

and risk levels (85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include describing in

further detail the

business’s likely

future financial

performance based

on its current

financial well-being

and risk levels (55%)

Does not a�empt

criterion (0%)

6

Financial

Recommenda�on(s)

Exceeds proficiency

in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

Recommends the

most appropriate

financing op�on(s)

based on the

business’s financial

health, including a

ra�onale for why the

op�on(s) are best

(85%)

Shows progress

toward proficiency,

but with errors or

omissions; areas for

improvement may

include

recommending more

comprehensively the

most appropriate

financing op�on(s)

based on the

business’s financial

health, including a

ra�onale for why the

op�on(s) are best

(55%)

Does not a�empt

criterion (0%)

7

Ar�cula�on of Exceeds proficiency Clearly conveys Shows progress Submission has 8

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Response in an excep�onally

clear, insigh�ul,

sophis�cated, or

crea�ve manner

(100%)

meaning with correct

grammar, sentence

structure, and

spelling,

demonstra�ng an

understanding of

audience and

purpose (85%)

toward proficiency,

but with errors in

grammar, sentence

structure, and

spelling, nega�vely

impac�ng readability

(55%)

cri�cal errors in

grammar, sentence

structure, and

spelling, preven�ng

understanding of

ideas (0%)

Cita�ons and

A�ribu�ons

Uses cita�ons for

ideas requiring

a�ribu�on, with few

or no minor errors

(100%)

Uses cita�ons for

ideas requiring

a�ribu�on, with

consistent minor

errors (85%)

Uses cita�ons for

ideas requiring

a�ribu�on, with

major errors (55%)

Does not use

cita�ons for ideas

requiring a�ribu�on

(0%)

5

Total: 100%

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