Reference no: EM131262662 , Length: 2
Overview: Financial analysis involves examining historical data to gain information about the current and future financial health of a company. Financial analysis can be applied in a wide variety of situations to give business managers the information they need to make critical decisions. The ability to understand financial data is essential for any business manager.
For the final project, you will use this case study to prepare a financial analysis report for Home Depot Inc. You will include in your analysis the background calculations and managerial analysis for each of the following topics: time value of money, stock and bond valuation, and capital budgeting. You will also discuss macroeconomic variables that might impact the company's financial decision making and strategic objectives. These topics will be covered over four milestones to be submitted throughout the course before you submit the final project. Note that while these elements may seem separate and unrelated, together they will present a well-rounded view of the company's finances with regard to the topics.
For this milestone, you will submit a draft of the Time Value of Money section of the final project, along with your supporting explanations.
Prompt: Calculate time value of money figures and use the results to support your explanations of the present and future value of Home Depot Inc. Complete your calculations on the designated tab in the Final Project Student Workbook.
'Specifically, the following critical elements must be addressed:
1. Time Value of Money
A. Calculate the following time value of money figures:
1. Calculate the present value of the company based on the given interest rate and expected revenues over time.
2. Suppose the risk of the company changes based on an internal event. Recalculate the present value of the company.
3. Suppose that a potential buyer has offered to buy this company in five years. Based on the present value you calculated above, what would be a reasonable amount for which the company should be sold at that future time?
B. What are the implications of the change in present value based on risk? In other words, what does the change mean to the company, and how would you, as a financial manager, interpret it? Be sure to justify your reasoning.
C. Based on the future value of the company that you calculated, and being mindful of the need to effectively balance portfolio risk with return, what recommendation would you make about purchasing the company as an investment at that price? Be sure to substantiate your reasoning.
Guidelines for Submission: Your paper must be submitted as ato 3-page Microsoft Word document, not including your calculations, which should be completed in the Final Project Student Workbook. Use double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style.
Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions.
Attachment:- Workbook.xlsx
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: Calculate time value of money figures and use the results to support your explanations of the present and future value of Home Depot Inc. Complete your calculations on the designated tab in the Final Project Student Workbook.
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