MBA 520 Accounting and Financial Analysis 16TW1, Final Submission: Financial Analysis and Projection Report

MBA 520 Accounting and Financial Analysis 16TW1, Final Submission: Financial Analysis and Projection Report

 

MBA 520 Final Project Guidelines and Rubric

 

Overview

Businesses and other organizations must regularly measure their financial performance and health in order to make operational and strategic decisions affecting

the organization’s future. Management professionals utilize income statements, balance sheets, cash flow statements, and a limitless variety of other reports and

techniques to evaluate an organization. They also work closely with professionals from departments across the organization—including marketing, human

resources, and operations—to ensure that the business runs smoothly and that financial decisions are not made in isolation.

 

For this project, you will use the accounting and finance skills you learned in the course to review the past and current financial performance and health of a

global, publicly traded company. Based on that analysis, you will create initial financial projections that forecast the company’s performance under different

scenarios and identify internal risks and opportunities in order to begin planning future activities.

 

This assessment addresses the following course outcomes:

 

 Assess organizations’ underlying financial performance and health by analyzing relevant financial statements, variances, ratios, and other financial

information

 Draw connections between accounting and financial information and the broader organizational context for making integrated business decisions

 Assess critical factors driving financial risks and opportunities for informing management priorities

 Forecast business performance under different assumptions about inputs and processes using simple financial models

 Evaluate the internal costs and benefits of business opportunities for their impact on budgeting and business decisions

 Communicate financial analyses clearly and coherently for persuading internal stakeholders of the validity of observations and conclusions

 

Prompt

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.

 

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.

 

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?

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? 

 

IV. Success Factors and Risks. Use this section to discuss the factors that may affect current and future performance. Specifically:

A. How do the organization’s financial and strategic priorities affect accounting procedures and business decisions? How might that affect business

success? For example, is management growth-oriented or efficiency-oriented? What is the organization’s approach to risk and short- versus longterm

planning

horizons?

 

 

B. How might the organization better capitalize on non-financial factors such as market share, reputation, human resources, physical facilities, or

patents? Support your response with relevant research and analysis. 

C. What are the most significant internal risks to the company’s financial performance? Give evidence to support your response. For example, is the

company vulnerable to technological changes or cyber-attacks? Loss of high-talent personnel? Production disruptions?  

 

V. Projections. Based on what you know about the organization’s financial health and performance, forecast its future performance. In particular, you

should:

A. Project the organization’s likely consolidated financial performance for each of the next three years. Support your analysis with an appendix

spreadsheet showing actual results for the most recent year, along with your projections and assumptions. Remember, your supervisor is

interested in fresh perspectives, so you should not just replicate existing financial statements, but should add other relevant calculations or

disaggregations to help inform decisions. 

B. Modify your projections for the coming year to show a best- and worst-case scenario, based on the potential success factors and risks you

identified. As with your initial projections, support your analysis with an appendix spreadsheet, specifying your assumptions and including

relevant calculations and disaggregations beyond those in existing financial reports. 

C. Discuss how your assumptions, forecasting methodology, and information gaps affect your projections. Why are your projections appropriate?

For example, are they consistent with the organization’s mission and priorities? Aggressive but achievable? How would changing your

assumptions change your projections?

 

VI. Business opportunities. In this section, discuss the incremental impact of a hypothetical, but reasonable, simple new investment project, such as a new

product or facility or a cost-cutting investment, as an initial step in thinking about the future. Be sure to address the following:

A. Based on your knowledge of this organization, what is a likely investment it would consider and why? Be sure to describe the basic features of

the investment as a foundation for considering its potential financial impact. 

B. Evaluate the approximate costs and benefits of the investment you identified, explaining how these would affect your spreadsheet projections

and business decisions. Estimates are sufficient, but should be grounded in common sense and insight into the organization. 

 

C. How does the potential investment affect budgeting and related business decisions? For example, does the investment involve significant cash

spending this coming year, followed by benefits in the following year? How might that affect short-term and long-term spending priorities? Does

the benefit outweigh the cost?

 

VII. Recommendations. What should you and your manager do next? Support your recommendations with evidence from your financial analysis. For

example, should the company pursue the new investment you identified? Implement process changes to decrease risks and/or improve performance? 

 

 

Milestones

Milestone One: Financial Performance and Health

In Module Three, you will submit your first milestone in which you will evaluate the organization’s recent financial performance and current financial health,

given its organizational context. This milestone will be graded with the Milestone One Rubric.

 

Milestone Two: Success Factors, Risk, and Projections

In Module Five, you will discuss factors that may affect current and future performance. You will then forecast future performance, based on what you know

about the organization’s financial health and performance. This milestone will be graded with the Milestone Two Rubric.

 

Milestone Three: Business Opportunities

In Module Seven, you will discuss the incremental impact of a hypothetical, but reasonable, simple new investment project, such as a new product or facility or a

cost-cutting investment, as an initial step in thinking about the future. This milestone will be graded with the Milestone Three Rubric.

 

Final Submission: Financial Analysis Projection Report

In Module Nine, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final product. It should

reflect the incorporation of feedback gained throughout the course. This submission will be graded with the Final Product Rubric.

 

 

Deliverables

 

Milestone Deliverable Module Due Grading

1 Financial Performance and Health Three Graded separately; Milestone One Rubric

2 Success Factors, Risk, and Projections Five Graded separately; Milestone Two Rubric

3 Business Opportunities Seven Graded separately; Milestone Three Rubric

 Final Submission: Financial Analysis

Projection Report

Nine Graded separately; Final Product Rubric

 

 

Final Product Rubric

Guidelines for Submission: Your financial analysis and projection report should be approximately 6–8 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

Executive Summary

 

Meets “Proficient” criteria, and

response is especially wellsuited

for

target

audience

 

Clearly and concisely

summarizes principal findings,

projections, and

recommendations with an eye

to persuading busy executives

to support ideas and read

further

Summarizes principal findings,

projections, and

recommendations with an eye

to persuading busy executives

to support ideas and read

further, but summary is

lengthy, lacks clarity, omits

critical details, or contains

inaccuracies

Does not summarize principal

findings, projections, and

recommendations with an eye

to persuading busy executives

to support ideas and read

further

5.33

Approach

 

Meets “Proficient” criteria, and

response is especially wellsuited

for

target

audience

 

Provides intended audience

with a solid, but brief, sense of

parameters of analysis and who

else would be consulted in

refining it 

Provides intended audience

with a sense of parameters of

analysis and who else would be

consulted, but response is

lengthy, lacks clarity, omits

critical details, or contains

inaccuracies

Does not provide intended

audience with a sense of

parameters of analysis and who

else would be consulted in

refining it

5.33

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

5.33

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

5.33

Financial:

Performance:

Income

 

Meets “Proficient” criteria, and

analysis and supporting

evidence are particularly wellsuited

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

3.6

Financial:

Performance: Cash

Flow

 

Meets “Proficient” criteria, and

analysis and supporting

evidence are particularly wellsuited

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

3.6

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

3.6

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

3.6

Financial: Health:

Growth

 

Meets “Proficient” criteria and

demonstrates extraordinary

insight into the connections

between financial and nonfinancial

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

5.33

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

3.6

Success Factors and

Risks: Priorities

 

Meets “Proficient” criteria, and

discussion of how priorities

inform management decisions

is especially nuanced

Determines how organization’s

financial and strategic priorities

affect accounting procedures

and business decisions and the

implications for business

success

Determines how organization’s

financial and strategic priorities

affect accounting procedures

and business decisions and the

implications for business

success, but response is

cursory or contains

inaccuracies or links between

priorities and business

decisions and procedures are

weak or illogical

Does not determine how

organization’s financial and

strategic priorities affect

accounting procedures and

business decisions and the

implications for business

success

5.33

Success Factors and

Risks: Non-Financial

Factors

 

Meets “Proficient” criteria and

demonstrates extraordinary

insight into the ways in which

non-monetary factors impact

business opportunities

Identifies how organization

might better capitalize on nonfinancial

factors,

supported

by

 

relevant

research

and

analysis

 

 

Identifies how organization

might better capitalize on nonfinancial

factors,

supported

by

 

research

and

analysis,

but

 

response

is

cursory,

contains

 

inaccuracies,

or

is

poorly

 

supported

 

Does not identify how

organization might better

capitalize on non-financial

factors, supported by research

and analysis

5.33

Success Factors and

Risks: Risks

 

Meets “Proficient” criteria and

provides especially nuanced

and well-supported insight into

the internal factors that are

most significant in driving

financial risk

Pinpoints most significant

internal risks to financial

performance, supported by

evidence

Pinpoints most significant

internal risks to financial

performance, supported by

evidence, but response is

cursory, contains gaps in

accuracy or logic, or evidence is

weak or irrelevant

Does not pinpoint most

significant internal risks to

financial performance,

supported by evidence

5.33

Projections: Likely

Performance

 

Meets “Proficient” criteria, and

projections are especially

nuanced and well-supported by

evidence and realistic

assumptions

Projects likely consolidated

financial performance for next

three years, supported by

spreadsheet showing actual

results for most recent year,

projections, and assumptions 

Projects likely consolidated

financial performance for next

three years, supported by

spreadsheet showing actual

results for most recent year,

projections, and assumptions,

but response contains

inaccuracies or faulty

assumptions or omits key

details

Does not project likely

consolidated financial

performance for next three

years, supported by

spreadsheet showing actual

results for most recent year,

projections, and assumptions 

5.33

Projections: Best

and Worst Case

 

Meets “Proficient” criteria and

demonstrates especially keen

insight into the range of

possible financial projections,

based on reasonable and

realistic assumptions

Modifies projections to show

best- and worst-case scenarios

for coming year based on

success factors and risks

identified, supported by

spreadsheet with assumptions

and relevant information

beyond existing financial

reports

Modifies projections to show

best- and worst-case scenarios

based on success factors and

risks identified, supported by

spreadsheet with assumptions

and additional information, but

response contains inaccuracies

or faulty assumptions or

additional information included

is not relevant

Does not modify projections to

show best- and worst-case

scenarios based on success

factors and risks identified,

supported by spreadsheet with

assumptions and information

beyond existing financial

reports

5.33

Projections: Discuss

 

Meets “Proficient” criteria and

demonstrates especially keen

insight into the sensitivity of

financial projections to

changing circumstances and

assumptions

Discusses how assumptions,

forecasting methodology, and

information gaps affect

projections and why

projections are appropriate

 

Discusses how assumptions,

methodology, and information

gaps affect projections and why

projections are appropriate,

but discussion is cursory or

illogical or contains

inaccuracies

Does not discuss how

assumptions, forecasting

methodology, and information

gaps affect projections and why

projections are appropriate

5.33

Business

Opportunities: Likely

Investment

 

Meets “Proficient” criteria, and

investment identified is

particularly well-aligned with

the needs, priorities, and goals

of the organization

Identifies likely investment to

consider and why, describing

its basic features as a

foundation for considering

potential financial impact

Identifies likely investment to

consider and why, describing

its basic features as a

foundation for considering

potential financial impact, but

response is cursory or contains

inaccuracies or justification for

why investment would be of

interest to organization is weak

Does not identify likely

investment to consider and

why, describing its basic

features as a foundation for

considering potential financial

impact

5.33

Business

Opportunities: Costs

and Benefits

 

Meets “Proficient” criteria, and

evaluation is based on realistic

estimates and is especially well

aligned with decision-making

needs 

Evaluates approximate costs

and benefits of investment

identified, explaining how

these would affect spreadsheet

projections and business

decisions

Evaluates approximate costs

and benefits of investment

identified, explaining how

these would affect spreadsheet

projections and business

decisions, but evaluation is

cursory or contains gaps in

accuracy or logic, or links to

business decisions are weak

Does not evaluate approximate

costs and benefits of

investment identified,

explaining how these would

affect spreadsheet projections

and business decisions

5.33

Business

Opportunities:

Implications

 

Meets “Proficient” criteria, and

discussion of budgeting

implications is particularly

nuanced and well aligned with

decision-making needs

Assesses implications of

potential investment for

budgeting and related business

decisions

Assesses the implications of

potential investment for

budgeting and related business

decisions, but evaluation is

cursory or contains

inaccuracies

Does not assess implications of

potential investment for

budgeting and related business

decisions

5.33

Recommendations

 

Meets “Proficient” criteria, and

response is especially wellsuited

for

target

audience

 

Recommends clear and

coherent next steps, based on

persuasive evidence from

financial analysis

Recommends next steps, based

on evidence from financial

analysis, but these are not

clear and coherent, or evidence

is not persuasive given

intended audience 

Does not recommend next

steps, based on evidence from

financial analysis

5.33

Articulation of

Response

Submission is free of errors

related to citations, grammar,

spelling, syntax, and

organization and is presented

in a professional and easy-toread

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

2.05

Earned Total 100%