Explain how potential short-term financing source could help

Assignment Help Project Management

Reference no: EM133531822

Assignment: Project Proposal

Overview

To prepare for your report in Project Two, you must calculate the financial ratios needed to determine your chosen business's current financial health. Once you've calculated these ratios, you will use the results to analyze the business's current financial position. This will help you make decisions about how to improve or maintain their financial health. Pay close attention to working capital management. If liquidity is an issue, think about how the company will meet its short-term obligations.

Directions

For the company you chose in the Module Two Journal, open the following documents:

1. The balance sheet, income statement, and cash flow statement from the most recent fiscal quarter (from Mergent Online)

2. The Ratios Most Recent Fiscal Qtr worksheet in the Project Two Financial Formulas workbook.

• For example, if the most recent fiscal quarter available is the third quarter in 2022, you'll compare those results to the same financial calculations from the third quarter in 2021.

Use the documents to calculate key financial ratios.

Then open the following documents:

1. The balance sheet, income statement, and cash flow statement from the same fiscal quarter one year ago
2. The Ratios Same Fiscal Qtr 1 Year Ago worksheet

Use the documents to calculate the same financial ratios. Finally, compare those ratios and analyze your results.

Specifically, you must address the following criteria:

I. Financial Calculations. Calculate accurate financial formulas to assess the business's current financial health. Specifically, calculate the following formulas using the Ratios Most Recent Fiscal Qtr and the Ratios Same Fiscal Qtr 1 Year Ago worksheets in the Project Two Financial Formulas workbook:

1. Working capital
2. Current ratio
3. Debt ratio
4. Earnings per share
5. Price/earnings ratio
6. Total asset turnover ratio
7. Financial leverage
8. Net profit margin
9. Return on assets
10. Return on equity

II. Fiscal Quarter Comparison. Summarize the differences between the following:

1. The results from your financial calculations of the most recent fiscal quarter

2. The results of the same financial calculations of the same fiscal quarter from one year ago

• For example, if the most recent fiscal quarter available is the third quarter in 2022, you'll compare those results to the same financial calculations from the third quarter in 2021.

III. Comparison Analysis. Explain what your calculations and comparison show about the business's current financial health. Give examples to support your explanation for the following questions:

1. Do the results show the business is financially healthy or unhealthy? Which results indicate this?

2. What might be the causes of the business's financial success or failure?

3. Is more information needed to determine the business's financial health? If so, which pieces of information might still be needed?

IV. Short-Term Financing. Explain how potential short-term financing sources could help the business raise funds needed to improve its financial health. Base your response on the business's current financial information.

Reference no: EM133531822

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