Accounting and financial analysis

MBA 520 Milestone One Guidelines and Rubric This milestone assignment covers Modules One, Two and Three. After reviewing your chosen company’s organization context, you will conduct a financial analysis of the company’s financial statements for the last three consecutive years. Your analysis should include the review and interpretation of data from the following financial statements: the income statement, the balance sheet, statement of cash flow, and statement of retained earnings. Based on the review of the financial statements, assess the organization’s financial performance and financial health. Provide support for your assessment. Prompt: As a newly-hired manager at a company of your choosing, your first task is to review the company’s past and current financial performance and health and make initial financial projections in order to begin planning for the upcoming year. Your report will include several financial tables, along with a comprehensive narrative describing the organization’s context, financial performance, and health. Note that, in addition to the organization’s financial statements and website, other authoritative news sources—such as annual reports and external sites like Bloomberg.com—may offer insights that facilitate analysis or provide information on the organization’s priorities, challenges, and geographic distribution. In particular, you must cover:

A. Organizational Context 1. What key features of the organization (e.g., major products or services, customers, location, etc.) help set the boundaries for business

decisions? In other words, what key goods or services does your organization provide, for whom, where, and why? 2. How is the company organized and managed (e.g., by product groups, geographic region, function, etc.)? How does that affect

accounting and financial information and subsequent business decisions? B. Recent Financial Performance

1. Assess what the organization’s consolidated income statements for the last three years say about its financial performance. Use relevant indicators, graphs, and spreadsheets to support your narrative. (Include all spreadsheets in an appendix.) For example, what do the amounts and year-to-year changes in revenue, operating income, net profit or loss, and Earnings Before Interest, Taxes, Depreciation, and Amortization tell you? Do any items stand out?

2. Assess what the organization’s consolidated cash flow statements for the same time period say about its financial performance. Use relevant indicators, graphs, and spreadsheets to support your narrative. For example, what do the amounts and year-to-year changes in cash from operating activities, cash from investing, cash from financing, and total cash flow tell you? Do any items stand out?

3. Assess the organization’s underlying financial performance. Support your answer with the analysis above and relevant research. For example, is recent performance substantially affected by unusual events such as a major acquisition or spin-off? Is the business thriving or struggling in its industry? How do you know?

C. Current Financial Health

1. Assess how the organization is capitalized and what that tells you about its financial health. Support your response with relevant graphs, spreadsheets, and indicators such as “cash and cash equivalents,” total debt, shareholders’ equity, current ratio, debt/equity ratio, and Days Sales Outstanding (DSO). For example, does the organization have enough cash for payroll and other bills? Does it have the right mix of debt versus equity (stock)? How do you know?

2. Does the organization have the right amount of cash and other resources (e.g., key people, technologies, reputation, physical assets, etc.) to fuel future growth? What does this suggest for business decisions? For example, if it has too much cash, should it pay a large dividend, repurchase its own shares, or reinvest the excess funds?

3. Assess the financial value of the company using relevant indicators. What does your assessment imply for future business health and performance? For example, what is the business’s current market value? What is its price-to-earnings ratio? What do these suggest about investor perceptions of the business’s future?

Rubric Guidelines for Submission: Your Financial Performance and Health report should be approximately 2–4 pages long (excluding title page, spreadsheets and graphs, and references list). It should be double spaced, with 12-point Times New Roman font and one-inch margins, and should use the latest guidelines for APA formatting for references and citations. Please also include your name, course name, and submission date on the title page. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions.

Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value

Financial: Context: Key Features

Meets “Proficient” criteria and draws particularly insightful connections between organization’s financial and non- financial features and business decisions

Describes how key features of organization help set boundaries for business decisions

Describes how key features of organization help set boundaries for business decisions, but response is cursory, contains inaccuracies, or links to decision making are weak or illogical

Does not describe how key features of organization help set boundaries for business decisions

15

Financial: Context: Organized

Meets “Proficient” criteria and demonstrates especially keen insight into relationships between organization’s structure, how financial information is recorded, and impact on business decisions

Analyzes how company is organized and managed and effect on accounting and financial information and subsequent business decisions

Analyzes how company is organized and effect on accounting and financial information and decisions, but response is cursory, contains inaccuracies, or links between organizational structure, finance, and decision making are weak or illogical

Does not analyze how company is organized and managed and effect on accounting and financial information and subsequent business decisions

15

Financial: Performance: Income

Meets “Proficient” criteria, and analysis and supporting evidence are particularly well-suited to drawing meaningful conclusions about financial performance

Assesses what consolidated income statements for last three years say about financial performance, supported by relevant indicators, graphs, and spreadsheets

Assesses what consolidated income statements say about financial performance, supported by indicators, graphs, and spreadsheets, but response is cursory, contains inaccuracies, or support is not relevant

Does not assess what consolidated income statements for last three years say about financial performance, supported by relevant indicators, graphs, and spreadsheets

9.5

Financial: Performance: Cash

Flow

Meets “Proficient” criteria, and analysis and supporting evidence are particularly well-suited to drawing meaningful conclusions about financial performance

Assesses what consolidated cash flow statements for the same time period say about financial performance, supported by relevant indicators, graphs, and spreadsheets

Assesses what consolidated cash flow statements say about financial performance, supported by indicators, graphs, and spreadsheets, but response is cursory or contains inaccuracies or support is not relevant

Does not assess what consolidated cash flow statements for the same time period say about financial performance, supported by relevant indicators, graphs, and spreadsheets

9.5

Financial: Performance:

Underlying

Meets “Proficient” criteria, and assessment is especially nuanced and well supported by relevant analysis and research

Assesses underlying financial performance, supported by analysis and relevant research

Assesses underlying financial performance, supported by analysis and research, but response is cursory, contains gaps in accuracy or logic, or is poorly supported by analysis and research

Does not assess underlying financial performance, supported by analysis and relevant research

9.5

Financial: Health: Capitalized

Meets “Proficient” criteria and analysis and supporting evidence are particularly well suited to drawing meaningful conclusions about financial health

Assesses how organization is capitalized and what that says about financial health, supported by relevant graphs, spreadsheets, and indicators

Assesses how organization is capitalized and what that says about financial health, supported by graphs, spreadsheets, and indicators, but response is cursory or contains inaccuracies or support is not relevant

Does not assess how organization is capitalized and what that says about financial health, supported by relevant graphs, spreadsheets, and indicators

9.5

Financial: Health: Growth

Meets “Proficient” criteria and demonstrates extraordinary insight into the connections between financial and non- financial resources, resource management strategies, and business decisions related to growth

Determines whether organization has right amount of cash and other resources to fuel future growth and what this suggests for business decisions

Determines whether organization has right amount of cash and other resources to fuel future growth and what this suggests for business decisions, but response is cursory or contains inaccuracies or links between different types of resources and business decisions are weak or illogical

Does not determine whether organization has right amount of cash and other resources to fuel future growth and what this suggests for business decisions

15

Financial: Health: Financial Value

Meets “Proficient” criteria, and assessment and supporting evidence are particularly well suited to drawing meaningful conclusions about future financial health and performance

Assesses financial value of company and what it implies for future health and performance using relevant indicators

Assesses financial value of company and what it implies for future health and performance using relevant indicators, but assessment is cursory or contains inaccuracies or links to future health and performance are weak or illogical

Does not assess financial value of company and what it implies for future health and performance using relevant indicators

9.5

Articulation of Response

Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to-read format

Submission has no major errors related to citations, grammar, spelling, syntax, or organization

Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas

Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas

7.5

Earned Total 100%

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