Ciara Elliott-Compentecy 1 Reflection-FINCB571

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Management

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Apr 3, 2024

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1 Competency 1 Reflection Ciara Elliott University Of Phoenix FINCB/571 Daniel Pasternack

2 Competency 2 Reflection We are going to discuss the capital budgeting techniques and how they can benefit a company when using these tools and we will discuss the financial performance evaluation explaining the return on assets (ROA) and the price to earnings (PE) ratio. Capital Budgeting Techniques The Payback method and Net Present Value method are tow capital budgeting techniques, the payback method works well with the net present worth it takes in consideration the dollars declining worth over time. The payback method decides what amount of time it would take a company to see income of the first venture. When it comes to the Net Present Value (NPV) this brings the total net of the cash flow from the undertaking of the current worth variable. Its used to quantify the results of the whole invested project. This is beneficial to the company because it will help you understand where the money is going and the investment of the company to see the growth, its shows you where you could make the room for improvement and the quality of the company. Financial Performance Evaluation ROA and PE are financial metrics that are used to evaluate the financial health. When it comes to the return on assets known as ROA this a productivity ratio and it shows the results of the activities for the business or organization. When it comes to the price to earnings ratio known as PE is the valuation ratio and it shows the value of the proportions of the organization or business in the capital market. This looks over the growth, and risk of the company and its stock. A company that I am familiar with is Apple the phone company. Apples PE ratio is 26.61% as of

3 March 2024. The ROA as of December 2023 was 29.39%, this shows and helps me understand that their financial performance is effective. Their financial management is one of the factors that is contributing to the company to earn profit over the years. Apple is one of the most popular companies because of their products and the quality if the products that is what really helps the company and their financial gain. Conclusion Learning this information is so beneficial to the business aspect of owning or being apart of the business in general will help you know how to really understand the financial aspect. I never heard of the PE and ROA before so being able to do the research on it was fun because now this can help me with my law firm that I want to own one day. I never knew all the different things that go into the business and how it all ties together with each course but to know this piece will really help you understand how to financially handle the business. This has helped completely understand how to read the metrics when looking at business sites for things that you are researching.

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4 References https://www.macrotrends.net/stocks/charts/AAPL/apple/pe-ratio https://www.macrotrends.net/stocks/charts/AAPL/apple/roa

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