Rubic Print Format Course Code Class Code FIN 650

Rubic Print Formatcourse Codeclass Codefin 650fin 650 O500benchmark

Rubic_Print_Format course Code Class Code FIN-650 FIN-650-O500 Benchmark - Mini Case 6 30.0 Criteria Percentage Unsatisfactory (0.00%) Less than Satisfactory (74.00%) Satisfactory (79.00%) Good (87.00%) Excellent (100.00%) Comments Points Earned Content 100.0% Question A 30.0% Answer to question A is not included. Answer to question A is incomplete or incorrect. Answer to question A is included but lacks explanation and relevant supporting details. Answer to question A is complete and includes relevant supporting details. Answer to question A is extremely thorough and supported with substantial relevant details. Question B 30.0% Answer to question B is not included. Answer to question B is incomplete or incorrect. Answer to question B is included but lacks explanation and relevant supporting details. Answer to question B is complete and includes relevant supporting details. Answer to question B is extremely thorough and supported with substantial relevant details. Financial Decisions (C. 3..0% Recommendations for proposed financial decisions based on analysis of capital structure and capital budgeting techniques are not included. Recommendations for proposed financial decisions based on analysis of capital structure and capital budgeting techniques are incomplete or incorrect. Recommendations for proposed financial decisions based on analysis of capital structure and capital budgeting techniques are included but lack explanation and supporting details and examples. Recommendations for proposed financial decisions based on analysis of capital structure and capital budgeting techniques are complete and include supporting details and examples. Recommendations for proposed financial decisions based on analysis of capital structure and capital budgeting techniques are extremely thorough and include substantial supporting details and examples. Mechanics of Writing (includes spelling, punctuation, grammar, language use) 10.0% Surface errors are pervasive enough that they impede communication of meaning. Inappropriate word choice or sentence construction is used. Frequent and repetitive mechanical errors distract the reader. Inconsistencies in language choice (register) or word choice are present. Sentence structure is correct but not varied. Some mechanical errors or typos are present, but they are not overly distracting to the reader. Correct and varied sentence structure and audience-appropriate language are employed. Prose is largely free of mechanical errors, although a few may be present. The writer uses a variety of effective sentence structures and figures of speech. Writer is clearly in command of standard, written, academic English. Total Weightage 100% RATIO ANALYSIS RATIO ANALYSIS Note: change the column names to your industry and selected companies RATIOS [INDUSTRY/INDEX] [COMPANY #1] [COMPANY #2] ANALYSIS Profitability Ratios (%) Gross Margin EBITDA Margin Operating Margin Pre-Tax Margin Effective Tax Rate Financial Strength Quick Ratio Current Ratio LT Debt to Equity Total Debt to Equity Interest Coverage Valuation Ratios Price/Earnings Ratio Price to Sales P/S Price to Book P/B Free Cash Flow per Share Management Effectiveness (%) Return On Assets Return On Investment Return On Equity Efficiency Receivable Turnover Inventory Turnover Total Asset Turnover Free Cash Flow/Net Income What is Ratio Analysis? Briefly explain and cite your resources: Based on the ratio analysis above, in which company would you be willing to invest and why? FIN-550 Module One Activity Guidelines and Rubric Overview For this task, analyze the financial health of two competitors in the same industry based on their ratios, using the provided Excel spreadsheet template. Then, complete your analysis by writing a short synopsis of your findings in the space below the analysis. Prompt Follow these steps to analyze the financial health of two competitors. Use the Module One Activity Template to complete this task. Select two companies operating in the same industry; for example, Macy’s and Dillard’s Inc. The companies have to be in the same business in order for the ratios to be valuable to your analysis. Complete the spreadsheet, providing the following: — Ratio Research: Use the Excel spreadsheet template to analyze the selected company ratios (Profitability, Financial Strength, Valuation, Management Effectiveness, Dividends, and Efficiency) for both of the competitors. To complete this part, you can use the website Morningstar in the module resources to obtain the ratios. You can also use the SEC Edgar Company Filings resource to obtain the ratio from annual reports. Note: The ratios have to be from the same time period, the same year for both competitors. For training on how to use Excel, visit the SNHU Atomic Learning video training site or search YouTube to view appropriate Excel training videos. — Industry Ratios: In order to analyze ratios for the companies, you need to obtain the ratios for the Industry the competitors operate in. Industry values for the ratios can be found in the index column of the Morningstar Valuation page. If no index value is available, put the five-year averages for both companies in the industry column and use these figures for the industry comparison of your ratio analysis. — Ratio Analysis: Compare the two companies based on their ratios. Use the last column in the template to detail how each company is doing in relation to the ratios. Explain the significance of how the company ratios compare to the industry and each other. — Summary: Finish by answering the questions below the analysis section of your Excel spreadsheet. o Briefly explain what a ratio analysis is in 1-2 paragraphs. Cite your resources. o Based on the ratio analysis, in which company would you be willing to invest and why? Note: This is a theoretical exercise. You should not be investing according to this analysis. Rubric Guidelines for Submission: Complete and submit the Excel Worksheet template provided. Critical Elements Exemplary Proficient Needs Improvement Not Evident Value Ratio Research Provides accurate data for all the required company ratios in the categories of profitability, financial strength, valuation, management effectiveness, dividends, and efficiency (100%) Provides data for required company ratios in the categories of profitability, financial strength, valuation, management effectiveness, dividends, and efficiency, but some of the data is missing or inaccurate (70%) Does not provide data for any of the required ratios in the categories of profitability, financial strength, valuation, management effectiveness, dividends and efficiency (0%) 10 Industry Ratios Provides accurate data for all the industry ratios in the categories of profitability, financial strength, valuation, management effectiveness, dividends, and efficiency (100%) Provides data for the industry ratios in the categories of profitability, financial strength, valuation, management effectiveness, dividends, and efficiency, but some of the ratios are missing or inaccurate (70%) Does not provide data for any of the industry ratios in the categories of profitability, financial strength, valuation, management effectiveness, dividends and efficiency (0%) 10 Ratio Analysis Provides a detailed analysis for each ratio that demonstrates a complex grasp of each company’s position when compared to each other and the industry (100%) Provides a detailed analysis for each ratio that provides an accurate assessment of each company’s position when compared to each other and the industry (90%) Provides an analysis for each ratio, but the analysis lacks detail, is incomplete, or demonstrates an inaccurate understanding of each company’s position when compared to each other and the industry (70%) Does not provide a ratio analysis (0%) 35 Summary Provides an accurate and complete definition of ratio analysis as well as a thorough and cogent, detailed explanation of which company they would invest in and why that is supported by the financial data Provides an accurate and complete definition of ratio analysis as well as an appropriate explanation of which company they would invest in and why, supported by the financial data (90%) Provides a definition of ratio analysis and an explanation of which investment they would choose and why, but the definition is inaccurate or incomplete, or the explanation of which investment they would choose and why lacks detail, is incomplete or inaccurate or not supported by the financial data Does not provide a definition of financial analysis or a selected investment and explanation (0%) %) (70%) Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy to read format (100%) Submission has no major errors related to citations, grammar, spelling, syntax, or organization (90%) Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas (70%) Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas (0%) 10 Total 100% Mini Case 6 Assume you have just been hired as a business manager of PizzaPalace, a regional pizza restaurant chain. The company’s EBIT was $50 million last year and is not expected to grow. The firm is currently financed with all equity, and it has 10 million shares outstanding. When you took your corporate finance course, your instructor stated that most firms’ owners would be financially better off if the firms used some debt. When you suggested this to your new boss, he encouraged you to pursue the idea. As a first step, assume that you obtained from the firm’s investment banker the following estimated costs of debt for the firm at different capital structures: Percent Financed with Debt, 0% — .0% ...0 If the company were to recapitalize, then debt would be issued and the funds received would be used to repurchase stock. PizzaPalace is in the 40% state-plus-federal corporate tax bracket, its beta is 1.0, the risk-free rate is 6%, and the market risk premium is 6%. 1. Using the free cash flow valuation model, show the only avenues by which capital structure can affect value. 2. What is business risk? What factors influence a firm’s business risk? 3. What is operating leverage, and how does it affect a firm’s business risk? Show the operating break-even point if a company has fixed costs of $200, a sales price of $15, and variable costs of $10.