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School
University of Texas, Rio Grande Valley *
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Course
AUDITING
Subject
Accounting
Date
Nov 24, 2024
Type
jpeg
Pages
1
Uploaded by LieutenantResolve12096
4.
Detailed
coursework
instructions
You
have
to
produce
a
2000-word
report
and
an
Excel
spreadsheet
showing
you
can
apply
the
valuation
tools
discussed
in
the
course
to
perform
a
corporate
valuation
exercise.
You
are
required
to
address
the
following
issues
in
your
assignment:
1.
Evaluate
your
corporation's
return
and
risk
profile
and
examine
the
sources
of
risk.
Critically
analyse
your
findings
and
make
recommendations.
2.
Analyse
the
capital
structure
of
your
corporation.
Estimate
the
cost
of
debt
and
the
required
return
on
equity
for
your
corporation
using
the
approaches
presented
in
the
lectures.
Calculate
the
Weighted
Average
Cost
of
Capital
(WACC).
3.
Payout
policy.
Report
on
what
the
payout
policy
has
been
for
your
corporation
over
the
past
three
years.
It
may
include
a
dividend
or
buyback
programme
as
a
means
of
rewarding
shareholders.
Critically
analyse
the
payout
policy
adopted
by
your
corporation
(dividend
payout
ratio
vs
retained
earning
ratio
and
so
on),
and
discuss
if
and
how
this
affects
the
valuation
models
you
are
using
for
your
equity
asset
valuation.
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Related Questions
Choose one publicly-traded company that you will use for your research paper. You will research and monitor this company during the course. Your research should include all of the following :
Corporate Governance Analysis
Stockholder Analysis
Capital Structure Choices
Valuation – This is qualitative in nature. Research the previous annual reports to assist you with valuation. Sites, such as Yahoo Finance are also useful for these valuations.
Suggestions for Improving the Company in the Future
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Learning about Financial Planning Designations.
Please research Financial Planning designations in general and specifically each of these 3 Financial Planning designations -
CFP®
ChFC®
AFC ®
Based on what you find include in your email what is involved in earning each of the 3 listed designations above?
What main areas do they cover?
In addition to the test needed for the designation, how many hours of experience do you need to receive each credential?
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Below you have the three types of financial management decisions. Match each type of decision to a business transaction that would be relevant.
Capital budgeting
A. Deciding whether to issue new equity and use the proceeds to retire outstanding debt
Capital structure
B. Deciding whether to expand a manufacturing plant
Working capital management
C. Modifying the firm's credit collection policy with its customers
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Write five to seven bullet points outlining the responsibilities of a financial analyst. Write in complete sentences.
Financial Management Decisions: Use an example to discuss the importance of analyzing and managing finances to help make business decisions.
Consider the bullet points you outlined in the previous section. Then write a brief paragraph that answers the following questions. Use examples to support your claims.
How do these responsibilities help inform management decisions?
What would happen if management didn’t have this information?
Accounting Principles: Explain how to use accounting principles to analyze a business’s financial health. Give examples to support your claims.
Write a brief paragraph that explains how financial analysts use accounting principles to analyze a business’s financial health. In your paragraph, also answer the following questions:
What accounting information…
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List the three statements and explain in detail what information each statement presents.
explain the various ways that managers can use these financial statements.
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XYZ is considering the option to invest excess cash in short-term financial instruments. XYZ wishes to have access to the investments as quickly as possible in order to pay bills and meet employee payroll and have a return on their investment. Briefly discuss which factors you would be focusing on under each of the six (6) steps. Briefly describe the research tools available including the CCH Answer Connect and CCH Accounting Research.
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Describe the responsibilities of a financial analyst.
Write five to seven bullet points outlining the responsibilities of a financial analyst. Write in complete sentences.
Use an example to discuss the importance of analyzing and managing finances to help make business decisions.
How do these responsibilities help inform management decisions?
What would happen if management didn’t have this information?
Consider the bullet points you outlined in the previous section. Then write a brief paragraph that answers the following questions. Use examples to support your claims.
Explain how to use accounting principles to analyze a business’s financial health. Give examples to support your claims.
What accounting information do financial analysts use?
What would happen if that information was not available or was not accurate?
Write a brief paragraph that explains how financial analysts use accounting principles to analyze a business’s financial health. In your paragraph, also answer…
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A. Operating expenses are a function of:
a. The cost of equity and the cost of debt
b. The interest rates on debt and the amount of debt
c. Design(s) of the value propositions, the skill level and processes for spending money to operate the company, and the loan term bond yield + the equity risk premium + risks specific to the company
d. Design(s) of the value propositions, processes used to produce the value proposition(s), and the skill level and processes for spending money to operate the company
B. Which of the following is most closely associated with margin as a %?
a. Sales revenue
b. The processes used to produce the company’s value proposition(s)
c. The proportion of debt and equity in the company’s capital structure
d. The average operating assets of the company
C. Which of the following is most closely associated with asset utilization?
a. The cost of equity
b. Expenses
c. Operating assets…
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Mastery Problem: Financial Statement Analysis
Question Content Area
Liquidity and Solvency Measures
Your friend, another accountant, has bet you that with your knowledge of accounting and just the computations for common analytical measures, you can figure out many aspects of a company's financial statements. You take the bet!
Match each computation to one of the liquidity and solvency measures in the table. (Hint: Begin by looking for simple computations and identifying the amounts in those computations. Look for other measures that use those amounts.)
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TRUE OR FALSE: Read each sentence carefully and determine whether the statement True or False. Write your
answers in the space provided before the number.
1. Financial statement analysis uses computational and analytical techniques to evaluate the company's
risks, performance, financial health, and future prospects with the objective of making economic decisions.
2. Return on asset is an operational efficiency ratio.
3. Profitability ratios measure the ability of the company's assets to generate sales.
4. Gross profit margin provides an indication of the company's average pricing policy
5. Given equal gross profit margin, the company with the lower operating income margin has higher
operating expenses as a percentage of sales and has leaner operations.
Written Works
Below are the comparative Statement of Comprehensive Income & Statement of Financial Position of
Ellane Company & Lanie Company:
Statement of Comprehensive Income
Ellane Company
2013
Melanie Company
2014
2013
2014
Net Sales…
arrow_forward
Mastery Problem: Financial Statement Analysis
Liquidity and Solvency Measures
Your friend, another accountant, has bet you that with your knowledge of accounting and just the computations for common analytical measures, you can figure out many aspects of a company's financial statements. You take the bet!
Match each computation to one of the liquidity and solvency measures in the table. (Hint: Begin by looking for simple computations and identifying the amounts in those computations. Look for other measures that use those amounts.)
Liquidity and Solvency Measures
Computations
Working capital
$3,095,000 – $900,000
Current ratio
$3,095,000 ÷ $900,000
Quick ratio
$1,866,000 ÷ $900,000
Accounts receivable turnover
$8,280,000 ÷ [($714,000 + $740,000) ÷ 2]
Number of days' sales in receivables
[($714,000 + $740,000) ÷ 2] ÷ ($8,280,000 ÷ 365)
Inventory turnover
$4,100,000 ÷ [($1,072,000 + $1,100,000) ÷ 2]
Number of days' sales in inventory…
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Mastery Problem: Financial Statement Analysis
Liquidity and Solvency Measures
Your friend, another accountant, has bet you that with your knowledge of accounting and just the computations for common analytical measures, you can figure out many aspects of a company's financial statements. You take the bet!
Match each computation to one of the liquidity and solvency measures in the table. (Hint: Begin by looking for simple computations and identifying the amounts in those computations. Look for other measures that use those amounts.)
Liquidity and Solvency Measures
Computations
Working capital
$3,095,000 – $860,000
Current ratio
$3,095,000 ÷ $860,000
Quick ratio
$1,866,000 ÷ $860,000
Accounts receivable turnover
$8,250,000 ÷ [($714,000 + $740,000) ÷ 2]
Number of days' sales in receivables
[($714,000 + $740,000) ÷ 2] ÷ ($8,250,000 ÷ 365)
Inventory turnover
$4,100,000 ÷ [($1,072,000 + $1,100,000) ÷ 2]
Number of days' sales in inventory…
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Which of the following BEST describes Financial Condition Analysis (FCA)?
Group of answer choices
it mainly uses financial information in analysis
it is a daily assessment of financial performance
it evaluates the costs and benefits of financial analysis
it assesses the impact of socioeconomic/organizational factors on financial condition
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