Description

MF002-Financial Analysis

 

Overview

For this Performance Task Assessment, you will examine various financial reports of a publicly traded company and conduct a financial ratio analysis to understand a company’s financial position as compared to industry averages to demonstrate your ability to understand a company’s financial health and analyze ways to improve in areas revealed as being below industry average.

Assessment Submission Length: 4- to 6-page financial health assessment report (excluding title page and references) and financial ratio calculations in Excel

Instructions

To complete this Assessment, do the following:

• Ensure that all necessary information has been entered into the MF002_Assessment_Template_Part1 file. (As a reminder, refer to problem 4-23 on pages 143–144 of Fundamentals of Financial Management[Brigham & Houston, 2022]. Note that you will utilize the numbers provided in the problem but will not be answering any of the questions in this Assessment. All formulas are included in the MF002_Assessment_Template_Part1 file.)
• In the MF002_Assessment_Template_Part2 file, complete your work on the Assessment, using your Pre-Assessment submission as a starting point and incorporating any feedback, as appropriate.
• Be sure to adhere to the indicated assignment length.

Before submitting your Assessment, carefully review the rubric. This is the same rubric the assessor will use to evaluate your submission and it provides detailed criteria describing how to achieve or master the Competency. Many students find that understanding the requirements of the Assessment and the rubric criteria help them direct their focus and use their time most productively.

 

Financial Health Assessment: Barry Computer Company

For this Performance Task Assessment, you will act as a consultant hired by the operations director of the Barry Computer Company to do a financial analysis and comparison to the industry. You will conduct a financial ratio analysis to gain a good understanding of the company’s financial performance and will then write up an evaluation of the organization’s financial health, as well as your recommendations for how specific ratios can be improved within the next 3–5 years.

 

Part 1: Financial Information (2–3 pages, plus Excel spreadsheet)

• Calculate the following ratios for the Barry Computer Company using the Excel spreadsheet provided.

Ratio	Calculation
Current	Current Assets/Current Liabilities
Quick	Current Assets – Inventories/Current Liabilities
Days Sales Outstanding	Receivables/(Annual Sales/365)
Inventory Turnover	Sales/Inventories
Total Assets Turnover	Sales/Total Assets
Profit Margin	Net Income/Sales
ROA	Net Income/Total Assets
ROE	Net Income/Common Equity
ROIC	EBIT(1 – T)/Total Invested Capital
TIE	EBIT/Interest Charges
Debt/Total Capital	Total Debt/(Total Debt + Equity)
M/B	Market Price/Book Value
P/E	Price per Share/Earnings per Share
EV/EBITDA	(Market Value of Equity + Market Value of Total Debt + Market Value of Other Financial Claims – Cash and Equivalents)/EBITDA

 

• Analyze computations to determine which ratios are above and below their industry averages, and for each, provide a brief explanation as to why that might be the case.
• Evaluate the financial health of the organization, including in what areas the organization could improve.

 

Part 2: Recommendations (2–3 pages)

• For each ratiothat negatively falls outside the industry standards, develop at least one appropriate recommendation for the Barry Computer Company to improve financial performance over time (over the next 3–5 years to meet industry standards).
• Assess limitations of the exclusive use of ratio analysis for evaluating financial performance. In your assessment, describe any qualitative factors that could also complement the ratio analysis and play an important role in improving financial performance.

 

 

Instructions:-almost the same work just like the previous, you only have to do a 6 pages main paper (use the uploaded docx file) and the Excel calculation(use xlsx file). -also check all the necessary requirements from the RUBRIC file, – also uploaded 2 files from the ,,problem 4-23 on pages 143–144 of Fundamentals of Financial Management [Brigham & Houston, 2022]”. -use real life examples and APA formatted citations.

Ratio		Barry Computers	Industry Averages
Current	Current Assets/Current Liabilities	#DIV/0!	2.0X
Quick	Current Assets – Inventories/Current Liabilities	#DIV/0!	1.3X
Days Sales Outstanding	Receivables/(Annual Sales/365)	#DIV/0!	35	days
Inventory Turnover	Sales/Inventories	#DIV/0!	6.7X
Total Assets Turnover	Sales/Total Assets	#DIV/0!	3.0X
Profit Margin	Net Income/Sales	#DIV/0!	1.2%
ROA	Net Income/Total Assets	#DIV/0!	3.6%
ROE	Net Income/Common Equity	#DIV/0!	9.0%
ROIC	EBIT(1-T)Total Invested Capital	#DIV/0!	7.5%
TIE	EBIT/Interest Charges	#DIV/0!	3.0X
Debt/Total Capital	Total Debt/(Total Debt + Equity)	#DIV/0!	47.0%
M/B	Market Price/Book Value	#DIV/0!	4.2%
P/E	Price per Share/Earnings per Share	#DIV/0!	17.86%
EV/EBITDA	(Market Value of Equity + Market Value of Total Debt + Market Value of Other Financial Claims – Cash and Equivalents)/EBITDA	#DIV/0!	9.14%
Balance Sheet	Enter figures below
Cash
Receivables
Inventories
Total Current Assets
Net Fixed Assets
Total Assets
Accounts Payable
Other Current Liabilities
Notes Payable to Bank
Total Current Liabilities
Long-Term Debt		Shares Outstanding
Common Equity (36,100 shares)		36,100
Total Liabilities and Equity
Income Statement
Sales
Cost of Goods Sold
Materials
Labor
Heat, light, and power
Indirect Labor
Depreciation
Gross Profit
Selling Expenses
Gen. Admin Expenses
EBIT
Interest Expense
EBT		Tax Burden
Fed and State Income Taxes (25%)		25%
Net Income
Earnings per Share
Price per Share
Book Value (Common Equity/Shares)