For The CFO Project: Choose A Company From The Fortune 500 L ✓ Solved

For The Cfo Project Choose A Company From The Fortune 500 List Athtt

For the CFO project, choose a company from the Fortune 500 list (at ) as the subject of your analysis and report. Choose a company, such that: · It is not a Fortune 100 company · It is not a bank or financial services company (including brokers and investment banks) · It is not a holding company · It is not Kimberly Clark Your mission is to develop a comprehensive report to your CEO based on the topics covered in the course. Your task is to analyze the company in this context and provide recommendations. You decide how each topic should be addressed, and include research to make/support your strategy/policy recommendations. Your report should include an assessment of your company's corporate governance "readiness" and provide suitable recommendations to ensure compliance with the Sarbanes-Oxley Act of 2002 and new regulations published by the regulatory bodies. In the spirit of a Forensic Financial Analysis, You should conduct an analysis of the firm's financial statements and policies as a risk management exercise for the benefit of the company CEO. Look for any "bodies" buried in the statements and associated notes, as well as the types of information disclosed to the public (e.g., pro forma earnings). Your goal here is to identify any areas where the firm is vulnerable to SEC action (fraud or otherwise) and report these to the CEO as a preemptive risk mitigation action. The text Financial Shenanigans should be used as a reference to guide your approach in this area. I recognize this is a difficult task, given the short exposure to forensics financial analysis and the restricted information available to you. Do the best job you can. For your Corporate Governance Assessment, you are should assess the integrity and rigor of the firm's corporate governance structure (Board, Audit Committee, stock options policies, pension fund policy, etc.) to identify any weaknesses you can find and provide recommendations to strengthen governance policy. The corporate governance readings and recommended text, Building Public Trust: The Future of Corporate Reporting provide a good framework for your analysis and research. I recognize this is a tall order, given the complexity of the task and your limited access to relevant information; however there are a number of databases UMUC subscribes to that can be of use to you. In addition to the article databases, such as ABI/INFORM and Business Source Complete, we have: 1. D & B Key Business Ratios provides business ratios for industries in areas of solvency, efficiency and profitability searchable by industry name and SIC code with reports that can by printed in spreadsheet format. 2. Business and Company Resource Center has industry rankings, financial data, and investment reports including company profiles, products and brand information, investment reports, statistics, company financial overviews, financial ratios, and business events and trends. Some sources from 1985 to the present. 3. Business and Industry has business, finance, strategy, planning, marketing, and international business journal articles from 1994 to the present. 4. Mergent Online has directory data, financial information from 1991 to the present, histories for companies worldwide, and industry reports for the North American, Asian, and European regions from 2003 to the present. Corporate and municipal bond, UIT, and dividend information. Comparative industry financial information and ratios. You may also use topic areas covered in lecture notes in the course schedule as target areas for improvement in your company. Your report should be between 15-20 double-spaced pages, not including attachments. See the course schedule for the submission date. NOTE: Your CFO project is due the last day of the course. It is worth 30% of your grade. Try to submit it early. I may review it and ask for a resubmission. If it is submitted on the last day of class, this option will not be available. The report should be a minimum of 4000 words, not counting titles, references, abstract, long quotations and appendices. Organize your paper with interior titles addressing each of the topics. Try to organize your work as below. A table of contents would add value. Your mission is to develop a comprehensive report to your CEO based on the topics covered in the course. Your task is to analyze the company and provide recommendations. 1. Provide an executive summary. It is not an introduction. You should include an overview of the report, the general methodology, and the main findings and the recommendations. 2. Forensic Financial Analysis. This is the main section of your paper. You will be mainly graded on this section. a. Review the firm’s financial statements and do a ratio analysis of selected areas. Analyze the company based on the topics covered in this course. A general comparison to other firms in the industry through ratio analysis should be completed. b. Conduct an analysis of the firm as a risk management exercise for the benefit of the company CEO. Look for any "bodies" buried in the statements and associated notes, as well as the types of information disclosed to the public (e.g., pro forma earnings). c. Identify any areas where the firm is vulnerable to SEC action (fraud or otherwise) and report these to the CEO as a preemptive risk mitigation action. The book Financial Shenanigans can be used as a reference to guide your approach in this area. : You should review such items as: 1. Shifting Financing Cash Flows to the Operating Section 2. Shifting Normal Operating Cash Flows to the Investing Section 3. Inflating Operating Cash Flow Using Acquisitions or Disposals 4. Boosting Operating Cash Flow Using Unsustainable Activities 3. Complete a meaningful horizontal analysis of the firm’s recent performance with three years of data and two year-to-year changes of comparison. Be sure to provide a qualitative commentary. 4. Include a Corporate Governance Assessment of your company's corporate governance "readiness.†Assess the integrity and rigor of the firm's corporate governance structure (Board, Audit Committee, stock options policies, pension fund policy, etc.) to identify any weaknesses you can find and provide recommendations to strengthen governance policy. Note stories about your company in the media dealing with governance questions. 5. Provide suitable recommendations to ensure compliance with the Sarbanes-Oxley Act of 2002 and new regulations published by the SEC and other regulatory bodies. 6. Provide overall recommendations and a conclusion. 7. Provide a reference page. Make sure that you include some strictly academic references from academic journals.

Sample Paper For Above instruction

Executive Summary

This report evaluates XYZ Corporation’s financial health and governance frameworks to advise the CEO on potential risks and areas for improvement. Using forensic financial analysis, our approach involved detailed ratio analysis, risk assessment, and comparison with industry peers. Key findings suggest some discrepancies in cash flow classifications and potential vulnerabilities related to disclosures of pro forma earnings. Recommendations include strengthening internal controls, enhancing transparency, and aligning governance policies with Sarbanes-Oxley requirements.

Forensic Financial Analysis

Our review of XYZ Corporation’s financial statements revealed inconsistencies in cash flow reporting, with an apparent shift of operating cash flows into investing activities, which may inflate true operational performance. Ratio analysis shows declining profitability ratios compared to industry averages, possibly indicating underlying risks. An analysis of disclosures identified areas where the company might be vulnerable to SEC scrutiny, particularly in the use of pro forma earnings that exclude certain expenses, potentially misrepresenting financial health.

Horizontal Analysis

Over the three-year period, XYZ showed fluctuating revenues and net income, with a downward trend in profit margins. This qualitative analysis suggests increased operational costs and strategic restructuring during this period.

Corporate Governance Assessment

Although XYZ’s board composition appears adequate, deficiencies in the transparency of stock options policies and pension fund management were noted. Media reports highlighted governance concerns that warrant review and policy tightening to prevent conflicts of interest.

Regulatory Compliance Recommendations

To meet Sarbanes-Oxley standards, recommended actions include adopting more rigorous internal audit procedures, establishing independent audit committees, and improving disclosure processes for financial reporting. These steps will mitigate regulatory risks and improve investor confidence.

Conclusion

Addressing identified financial reporting vulnerabilities and strengthening corporate governance will prepare XYZ Corporation for regulatory compliance and safeguard against SEC interventions. Continuous monitoring and policy updates are essential for maintaining integrity and transparency.

References

• Graham, J. R., Harvey, C. R., & Rajgopal, S. (2005). The economic implications of corporate financial reporting. Journal of Accounting and Economics, 40(1-3), 3-73.
• Dechow, P. M., & Dichev, I. D. (2002). The quality of accruals and earnings: The role of accruals in predicting future cash flows. The Accounting Review, 77(s), 35-58.
• Healy, P. M., & Wahlen, J. M. (1999). A review of earnings management literature and its implications for research. Journal of Accounting Literature, 16, 1-38.
• Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports by Howard M. Schilit & Jeremy Perler.
• Building Public Trust: The Future of Corporate Reporting. Financial Executives International (FEI), 2012.