...Introduction Financial analysis (also referred to as financial statement analysis or accounting analysis) refers to an assessment of the viability, stability and profitability of a business, sub-business or project. It is defined as “The process of evaluating businesses, projects, budgets and other finance-related entities to determine their suitability for investment.” Typically, financial analysis is used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When looking at a specific company, the financial analyst will often focus on the income statement, balance sheet, and cash flow statement. In any organization, the two important financial statements are the Balance sheet & Profit and loss account of the business. Balance sheet is a statement of the financial position of an enterprise at a particular point of time. Profit and loss account shows the net profit or net loss of a company for a specified period of time. When these statements of the last few year of any organization are studied and analyzed, significant conclusions may be arrived regarding the changes in the financial position, the important policies followed and trends in profit and loss etc. Analysis of financial statement is necessary because it help in depicting the financial position on the basis of past and current records. Analysis of financial statement help in making the future decision and strategies. Therefore...
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...There are significant differences between investing and trading. Investment considers longer holding periods whereas trading focus on only short-term holdings (Chong, 2012). An investment in Nordstrom is an investment in growth fund versus a value fund. Growth funds tend to experience faster than average growth in regards to earnings, revenues, or cash flow. The expectation is that growth funds have the potential for higher returns however these funds may also represent greater risk in comparison to value funds; these funds generally perform better when stock prices are rising and underperforming the market as stock prices fall. Investing in Nordstrom could require a higher tolerance for risk and an investment on time (“Growth Investing” 2015). For an investment in Nordstrom our investor falls into two profiles: growth profile and aggressive profile. The growth profile is fitting for an investor with patience seeking investments with an expectation that that investment will grow above the average rate in comparison to the industry or to the overall market. An emphasis is placed on equity investments primarily designed to attain growth over a long period of time. Less of an emphasis is placed on fixed income investments, cash and cash equivalents. These investors generally do not require cash from their own investment account but like their investment to grow faster in comparison to the inflation understanding that the investment value may vary occasionally and these investors...
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...1. Response to CEO, "Shifting of staff from less important projects to Financial Project” : Working within Zarif Fiction Corporation, finance department requires well versed and well trained staff in finance related projects including terminology and expertise. The level of knowledge and skill required for finance department is something that can’t simply be handed to any staff member working outside financial department or less important projects. Though staff in other departments requires relevant experience, it’s not directly related to projects handled in financial department and don’t meet the qualifications to handle such projects with professionalism. More specifically, the duties and responsibilities of the CEO include the following: To lead, in conjunction with the Board, Company’s long and short term plans in accordance the development of the Company’s strategy. The Company is appropriately organized and staffed and to have the authority to hire and terminate staff as necessary to enable it to achieve the approved strategy. Appropriately organized and staffed and to have the authority to hire and terminate staff as necessary to enable it to achieve to ensure that expenditures annual budget of the Company. The principal risks of the Company and to ensure that these risks are being monitored and managed. To communicate effectively with shareholders, employees, Government authorities, other stakeholders and the public, effective internal controls...
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...Financial Analysis Team Project Overview: Your team works for a major mutual fund management company. Your boss is the lead fund manager for a technology investment fund specializing in an area set forth below. Your task is to develop a professional, 10- to 15-minute (maximum) presentation dealing with investment in the technology area of your fund. Because the fund company is paying you "top dollar" to guide investment decisions, your boss expects your presentation to be "top quality." At a minimum, this means that your presentation will make use of computer presentation technology (PowerPoint slides and/or the Internet), appropriate handouts, etc., to present an overview of investment opportunities and strategy in your technology area. Remember, your presentation is to be directed at a fund manager who makes buy/sell decisions based on your recommendations, not at a class. This means that, although there are questions listed below to guide you, your presentation should not be a series of answers to the questions. Instead, it should be a professional presentation dealing with the knowledge and information needed to guide investment policy. Any presenter who makes a statement such as, "The second question we had to answer was ...," will earn a 10-point deduction for his/her team on this project. Deliverable: The team will prepare a 15 slide (max) PowerPoint presentation that emphasizes charts and graphs, keeping text to a minimum. A two-page (max) narrative will be...
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...Performance Evaluation 2. – Part 1 The owner of General Mills was Cadwallader C. Washburn. He created the Minneapolis Milling Company back in the year 1856 for leasing the rights to the operators, and 10 years later, the first flourmill was built under his instruction close to the falls of St. Anthony, which is by the Mississippi River in Minneapolis. Back in the 1860’s General Mills had only two flour grinders using better quality ingredients, which led the way for other competitors to follow. Dating back closer to our age, during the 1960’s General Mills came out with such products as Play-Doe, Easy Bake Ovens, and Nerf balls just for kids. The company was founded by Illinois Congressman Robert Smith, who leased power rights to mills operating along the west side of the Saint Anthony Falls on the Mississippi River. Cadwallader C. Washburn acquired the company shortly after its founding and hired his brother, William D. Washburn to assist in the company's development. General Mills operates in three different business categories. The three include U.S. retail, international, and convenience stores and foodservice. The industry that General Mills is a part of is the “food consumer products” as it’s shown on fortune 500. General Mills Inc. is a manufacturer and marketer of branded consumer foods sold through retail stores. They supply branded and unbranded food products to the foodservice and commercial baking industries. As for their revenues, GM managed to reach a net sales...
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...Acer Incorporated Financial Statement Analysis Project Company History: Acer Incorporated was called "the region's most impressive technology company" in a 1996 article in The Economist. The company also ranks among the world's ten biggest manufacturers of individual components like keyboards, monitors, and CD-ROM drives, and is America's ninth-largest personal computer producer. By 1995, the company was producing four million PCs annually, 25 percent of them OEMs (products sold under other companies' labels). Under the guidance of Chairman and CEO Stan Shih, Acer used ground-breaking strategies to bounce back from a US $22.7 million loss in 1991, earning US $205 million on sales of US $3.2 billion in 1994. Shih hoped to increase Acer's global sales to US $15 billion by 1999, by which time the company would operate as a "federation" of local manufacturing, assembly, and marketing units. http://www.fundinguniverse.com/company-histories/Acer-Inc-Company-History.html Business Origins: Acer Incorporated is Taiwan's leading exporter and the world's fifth largest computer manufacturer. The company designs, manufactures, and sells computer hardware and software products; it ranks among the world's largest manufacturers of individual components such as keyboards, motherboards, set-up boxes, storage drives, monitors, CD-ROM drives, keyboards, printers, scanners, and software. Acer's nearly 30 years of growth results primarily from its business of manufacturing and assembling...
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...Financial Project Bruce Evans Dr. Mohamad S. Haj-Mohamadi MAT 104 – Algebra with Applications February 12, 2012 Strayer University Financial Project Explain how much additional money you would need to add to your monthly payment to pay off your loan in 20 years instead of 25. Considering the housing bust of 2008 and the current state of the U.S. economy, this is a situation that far too many of us have found ourselves facing. To premise, when considering paying off a simple interest loan or mortgage before its maturity date, one must also understand that your Principal and Interest (P&I) payment is still based on the original amount financed at the original interest rate. Paying monies over and above P&I will subsequently reduce the term in which you finance the loan; yet, without penalty. If your current P&I is $706.12 at 5.75% fixed for 30 years and you want to pay off your mortgage five years early, then you would need to pay $143.40 over and above your current P&I payment. Explain whether or not it would be reasonable to do this if you currently meet your monthly expenses with less than $100 left over. It is neither reasonable nor feasible to consider paying additional monies to pay off your mortgage before its maturity date if it will cost you more than an additional $100 per month and you have less than $100 per month in discretionary income. Identify the highest interest rate...
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...Financial Project Five years ago I bought a house for $171,000. I made a down payment of $35,000 therefore taking out a loan for $136,000. I am now five years into a 30 year loan that has a 5.6% fixed interest rate and would like to pay more. After receiving a bank statement I found I have a $121,259.44 balance left on my loan. I have been thinking about switching jobs or picking up a part time job since I am just making enough money to cover my expenses and I want to pay off my loan faster. I have also given thought to refinancing my house and whether it is worth it. Is paying a little extra monthly, therefore reducing my loan by five years (option 1), worth it? Should I refinance instead (option 2)? I did my research and what I found surprised me. Currently I have twenty five years left on my mortgage but I would like to pay it off in twenty. Since I am tight on money I had to find exactly how much extra money I would need to pay every month to shorten my loan to 240 payments or twenty years. If I pay an extra $90 a month towards my principle, I will shorten my loan to twenty years and save about $23,914 in interest. This is very reasonable because before I would have paid about $104,310 solely in interest over the remaining life of the loan. I believe it is a waste to pay so much of the loan directly towards interest, by paying an extra $90 per month I am able to drop this total interest to about $80,397. I can easily see myself working couple hours a week to pay this...
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...31 STEVE JOBS AND APPLE, INC. Todd A. Finkle, Gonzaga University Michael L. Mallin, The University of Toledo CASE DESCRIPTION The primary issues in this case involve business startup and management, and are appropriate for entrepreneurship and management courses. A secondary issue demonstrates how personal drive and motivation are critical components of successfully managing and growing a business, thereby making this case appropriate for discussion on the topic of strategic management. The case chronicles the life and passion of entrepreneur, Steve Jobs – illustrating the rise, fall, and current state of the Apple Computer Company. The case has a difficulty level 2 and is designed to be covered within one (75 minute) class period. The required preparation time is about 2 hours. It is appropriate for small business, entrepreneurship, or management classes. The purpose of this case is to illustrate to students how individual passion, determination, and innovation is a critical element in business start up success and also to stimulate critical thinking in terms of future direction for a company in a struggling economy. CASE SYNOPSIS The Apple Computer Company is arguably one of the most innovative technology companies to emerge in the last three decades. Apple, Inc. is responsible for bringing to market such products as the Macintosh computer and laptop, iPod and iTunes, and most recently, the iPhone. The success of the company can be traced primarily to a...
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...Financial Project Algebra with Applications – MAT 104 August 07, 2011 Currently you’ve meet your monthly expenses with nothing left over in order to pay the loan off in 20 years its best if you don’t refinance to reduce the cost per month. The method I used is to calculate the monthly payment if you start with the present loan balance, interest rate equals the number of payments. Then compare it with your recent payment; the difference will let you know if you can afford or it not. In order to refinance your loan, you’ll start it all over again then compare the results. The recommended course of action are as follows paying the current loan balance at the interest rate over 20 years there would be a difference left over. And it’s less reasonable to refinance if you’re paying more per month to reduce the cost. Paying for 25 years and if you choose to refinance the loan the more money you will have to pay each month. So the best option in this case is to go ahead and pay the loan within 20 years without financing. Paying additional to go ahead and pay the loan off quicker. The formula used was C = (P(r/12) / (1-(1+[r/12])^(-m). To avoid any incorrect calculations I referred to my financial calculator and performed a few steps and came up with the current loan balanced of 125,911.86 at 5.6% over 20 years, the payment would be 887.13 leaving a difference of 106.38. It would be unreasonable to refinance and pay an extra 106.38 per month to reduce...
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...------------------------------------------------- Financial Project Five years ago, I bought a house for $171,000, with a down payment of $30,000, which meant I took out a loan for $144,000. My interest rate was 5.75% fixed. I am now contemplating making a change to what I have already committed to. At present I see that there are two options that I can consider to make a change. The first would be to pay off the remaining principle in 20 years instead of 25 years. The second is to see if refinancing could be a consideration. Based off of my findings, I would choose one of the changes or just continue paying the loan as is. The first thing that I did was to check my bank statement and this is what I found: Escrow payment | $261.13 | Principle and Interest payment | $822.84 | Total payment | $1083.97 | Current Loan Balance | $130794.68 | Currently I am able to make my monthly payments as well as pay my other bills for my house. Although, I am left with a little less than a $100 to live off of each month, I would still like to see if it is possible for me to add to my monthly payments to pay off my house in 20 years. To solve my dilemma, I used the periodic payment method. I found out that I would have to add $95.45 to my monthly payment to pay off my loan in 20 years. I think that it would be unreasonable to try to pay off the loan in 20 years versus 25 years due to my current financial standing. To reach the add-on figure of $95.45, I used the periodic payment...
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...Assignment 2: Financial Project Coming up with a plan to eliminate five years off of a home loan, in my opinion, the first thing to do is verify where you are on the schedule, and change one variable to measure its effect. The variable to be changed would be reducing the remaining amount of time on your loan from 25 years to 20. Next I would gather all the specific information on my loan, then change the amount of time left on my loan and determine the monthly principal and interest payment. The loan was originally for $141,000. The interest rate was 5.75% fixed. The principal and interest payment is $822.84. After sixty payments the remaining principal balance is $130,794.68. The new mortgage payment for principal and interest to reduce the remaining years left on the loan from 25 years to 20 is $919.29. Next, add that to the $261.13 escrow for taxes and insurance, and then the total monthly payment is $1,180.42. This would be a monthly increase of $95.44. The formula I used is: PMT = (240, 5.75/12, 130.794.68) where 240 = the number of remaining monthly payments, 5.75/12= the monthly interest cost, and $130,794.68 is the current principal. This would leave less than $5.00 to manage its monthly spending. This would make paying off the mortgage five years faster a bad idea because of the normal everyday unexpected things that happen in life. In order to identify the highest interest rate you could refinance at in order to pay the current balance off in 20 years...
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...Financial Policy Project - Air Arabia and Gulf Airlines Name University Introduction The project is based on the financial analysis of the two companies from the airline industry. The first company is Air Arabia and the second company is Gulf Airline. Air Arabia which was established by the King of Sharjah in the year 2003 is known as the best economic mode of air travelling in the United Arab Emirates. The company continued to provide economic and valued services to its customers through the last decade and has been successful in penetrating the Air traffic business. The company did not limit its operation only to the Arab countries but also expanded its business operations to the Europe and other parts of the world. The Air Arabia destinations not the Arab countries but also reached the European destinations like Casablanca and the Cairo. The company believes in expanding its business operations and for this reason, it has established its subsidiaries airlines in the other Arab countries as well. The company is performing air travelling operations through its subsidiaries companies in Egypt and Morocco as well. The company today operates its flight to 88 destinations across the globe. The company planes lands on the destinations ranging from Arabia, Middle East, Asia to Europe and Africa. The company believes in offering comfortable and reliable journey for its passengers at the lowest possible fares and with this business strategy, millions of passengers have travelled...
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...The Financial Project Clifford Brown Course: Math 104 Professor: Bonnie Kegan Strayer University November 13, 2012 The purpose of this assignment is to explain what financial adjustments would need to be made in order to achieve a shorter amortization on the loan in question. The loan that we will discuss is based on the following information: Current balance is $112,242.47 The principle payment is $706.12 The Escrow payment is $211.13 The total payment 917.25 To address the subject we will use a series of questions. The first question is: How much money will need to be added to the current monthly payment in order to pay the loan of in 20 years instead of 25 years? The current payment on the loan is $706.12, and the new payment would be $788.03, therefore the answer to this question is $81.91. The next concern would be whether or not it would be reasonable to make such a change in ones existing mortgage if you had less than $100.00 left with the mortgage as it currently is now. This question requires us to evaluate whether or not we could carry out our daily routines with a modest $18.09 left over every month. Under these circumstances I find that it would be a poor choice to become committed to any such arrangement. However, one could sacrifice and make additional payments on less frequent intervals. This would mean that we should evaluate another approach to solve the issue of paying the loan off early. Often time’s people refinance their mortgages at lower...
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...1) From the consolidation perspective, what would be the likely overall effect of adopting IFRS on the company’s financial statements? From the consolidation perspective, the likely overall effect of adopting IFRS on the company’s financial statements would preserve and strengthen the company’s global financial competitiveness. Moreover, it will simplify the accounting and consolidation process significantly and reduce financial reporting costs. 2) What potential effect would arise if Klugen were to select the option under IFRS 3 to value non-controlling interest at the proportionate share of its subsidiaries’ net identifiable assets? For business combination, the buyer can control without buying all of the equity, the remaining , so-called the non-controlling, equity interests are measure either at fair value or at the non-controlling interests’ proportionate share of its subsidiaries’ net identifiable assets. Under IFRS 3, the potential effect would arise is that it will result in benefits for users by improving comparability and will increase the relevance of information provided. Moreover, it identifies and evaluates the main costs and benefits for users. 3) Do you believe that an impairment of goodwill would be more likely under IFRS or under U.S. GAAP? Why or why not? There is a difference in goodwill impairment measurement. Under U.S GAAP, two-step approach is used. It looks to the reporting unit. However, under IFRS, one-step approach is used. It is based...
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