7-1 Project Two: Comparison Analysis

Scenario

the choice of business in Module Two journal assignment. Imagine as an analyst for that business, Disney World. The board of directors wants updates on the business's financial health. The supervisor has asked of you to write a report that includes the following:

• The business's current financial health
• The available financial options for improving the business
• The recommendations about which options will support the business's financial health

The supervisor will present the report to the business's board of directors. The board members have different levels of knowledge about finance. You must write the report so it is easy for all board members to understand.

Directions

Create a report for the supervisor to share with the board of directors during their presentation. Use the Project Two Financial Assumptions document for descriptions of the three financial options you will evaluate. Use the business that was chosen from the Project Two Business Options List. Use the Mergent Online to find the company's most recent quarterly financial statements. Use these statements to support your analysis during the project. Use the Project Two Financial Analysis Report template to complete this project.

1. Financial Analysis: For this section, calculate the financial formulas listed in Part A. Use the most recent quarterly financial statements from your chosen business and the Project Two Financial Formulas worksheet.
   1. Financial Calculations: Accurately calculate financial formulas to determine the business's current financial health. It would help if you calculated the following:
2. • 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
3. • Working Capital Management: Explain the impact of working capital management on the business's operations. Provide examples to support the claims.

3. 1. Financing: Explain how a business finances its operations and expansion.
   2. Short-Term Financing: Explain how potential short-term financing sources could help the business raise funds for improving its financial health. Base any response on the business's current financial information.
   3. Bond Investment: Discuss the risks and benefits of the business investing in a corporate bond. Include the necessary ethical factors, appropriate calculations, and examples to support the analysis. Use the Project Two Financial Assumptions document and the Bonds section of the Present Net Value (NPV) worksheet in the Project Two Financial Formulas workbook.
   4. Capital Equipment: Discuss the risks and benefits of the business investing in capital equipment. Include the necessary ethical factors, appropriate calculations, and examples to support the analysis.
   5. Capital Lease for Building: Discuss the risks and benefits of a business purchasing a capital lease. Include the necessary ethical factors, appropriate calculations, and examples to support your analysis. Use the Project Two Financial Assumptions document and the Building section of the NPV worksheet in the Project Two Financial Formulas workbook.
4. Financial Evaluation: In this section of the report, you will explain financing. You will also evaluate which of the three available finance options is the best.
   • Bond Investment: Determine if the bond investment is a good financing option for the business's financial health. Use your financial analysis and other financial information to your support claims.
   1. Capital Equipment: Determine if the capital equipment investment is a good financing option for the business's financial health. Use your financial analysis and other financial information to support your claims.
   2. Capital Lease for Building: Determine if the capital lease building purchase is a good financing option for the business's financial health. Use your financial analysis and other financial information to support your claims.
   3. Future Financial Considerations: Describe the business's likely future financial performance. Base your description on the business's current financial well-being and risk levels. Use financial information to support your claims.