Financial Performance

Imagine you are a newly hired manager at a publicly traded, global corporation of your choosing. (Your instructor must approve your choice. You may also choose
a non-publicly traded organization, if your instructor verifies that the organization has sufficient financial information available to complete the project.)
You have been asked 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 supervisor is particularly interested in a fresh perspective on what your analysis reveals about potential risks and opportunities, as
well as recommendations for next steps. Because you will eventually need to convince internal stakeholders, including senior management, of the feasibility and
desirability of your suggested activities, it is important that you justify your projections and recommendations, explaining how they were informed by existing
information and modeling different scenarios.
Your financial analysis and projection report will include several financial tables, along with a comprehensive narrative describing the organization’s context,
financial performance and health, and your analytical approach and conclusions. Your report should be geared toward an executive audience with basic
accounting and finance knowledge and should be well organized, clear, concise, convincing, and free of distracting errors. 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.
Specifically, your financial analysis and projection report must include the following critical elements:
I. Executive Summary. Clearly and concisely summarize your principal findings, projections, and recommendations with an eye to persuading busy executives
to support your ideas and to read further. [MBA-520-06]
II. Approach. Provide your intended audience with a solid, but brief, sense of the parameters of your analysis and who else you would consult in refining it
further and why. Remember, your goal is to convince readers of the validity of your observations, while recognizing limitations that affect business
decisions. [MBA-520-06]
III. Financial Performance and Health. In this section, you will evaluate the organization’s recent financial performance and current financial health, given its
organizational context. 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? [MBA-520-02]
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? [MBA-520-02]
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? [MBA-520-01]
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? [MBA-520-
01]
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? [MBA-520-01]
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? [MBA-520-01]

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