Strategic Corporate Finance

10/3/2016 SLP FIN501
Strategic Corporate Fin” rel=”nofollow”>inance (OCT2016FT1)
https://tlc.trident.edu/d2l/le/content/79164/viewContent/1882544/View?ou=79164 1/2
Module 1 SLP
THE TIME VALUE OF MONEY AND FINANCIAL STATEMENT
ANALYSIS
Conductin” rel=”nofollow”>ing Fin” rel=”nofollow”>inancial Ratio Analysis
Select a publicly traded U.S. company that has paid a dividend for at least the last
three years, and conduct a fin” rel=”nofollow”>inancial ratio analysis. You will be usin” rel=”nofollow”>ing this company
for other assignments in” rel=”nofollow”>in this course; thus, please spend adequate time locatin” rel=”nofollow”>ing a
company. Please consider reviewin” rel=”nofollow”>ing http://fin” rel=”nofollow”>inance.yahoo.com to locate a company.
The company must have data available for you to conduct a fin” rel=”nofollow”>inancial ratio analysis.
It’s important to select a company in” rel=”nofollow”>in an in” rel=”nofollow”>industry that has in” rel=”nofollow”>industry ratio numbers.
You cannot select a privately held company.
Calculate all the followin” rel=”nofollow”>ing ratios for the company for the past three years and
compare them to the appropriate in” rel=”nofollow”>industry benchmarks:
Liquidity ratios:
Current
Quick
Asset Management ratios:
Inventory turnover
Total assets turnover
Fixed assets turnover
Days sales outstandin” rel=”nofollow”>ing
Debt Management ratios:
EBITDA coverage
Timesin” rel=”nofollow”>interestearned
Total debt to total assets
Profitability ratios:
Return on common equity
Return on total assets
Listen
10/3/2016 SLP FIN501
Strategic Corporate Fin” rel=”nofollow”>inance (OCT2016FT1)
https://tlc.trident.edu/d2l/le/content/79164/viewContent/1882544/View?ou=79164 2/2
Privacy Policy | Contact
Basic earnin” rel=”nofollow”>ing power
Profit margin” rel=”nofollow”>in on sales
Market Value ratios:
Market/book
Price/earnin” rel=”nofollow”>ings
Price/cash flow
Create a table that contain” rel=”nofollow”>ins the ratios for the various years. Then analyze the
in” rel=”nofollow”>information. Look at the trends in” rel=”nofollow”>in the ratios and comment on how they compare to
the in” rel=”nofollow”>industry benchmarks. Which ratios are strong? Which ratios need
improvement? If you were a stock in” rel=”nofollow”>investor, would you buy the company’s common
stock? Why or why not? If you were a bond in” rel=”nofollow”>investor, would you buy the company’s
bonds? Why or why not?
SLP Assignment Expectations
You are expected to:
Describe the purpose of the report and provide a conclusion. An in” rel=”nofollow”>introduction and
a conclusion are important because many busy in” rel=”nofollow”>individuals in” rel=”nofollow”>in the busin” rel=”nofollow”>iness
environment may only read the first and the last paragraph. If those paragraphs
are not in” rel=”nofollow”>interestin” rel=”nofollow”>ing, they never read the body of the paper.
Answer the SLP Assignment question(s) clearly and provide necessary details.
Write clearly and correctly—that is, no poor sentence structure, no spellin” rel=”nofollow”>ing and
grammar mistakes, and no runon
sentences.
Provide citations to support your argument and references on a separate page.
(All the sources that you listed in” rel=”nofollow”>in the references section must be cited in” rel=”nofollow”>in the
paper.) Use APA format to provide citations and references.
Type and doublespace
the paper.
Whenever appropriate, please use Excel to show supportin” rel=”nofollow”>ing computations in” rel=”nofollow”>in an
appendix, present fin” rel=”nofollow”>inancial in” rel=”nofollow”>information in” rel=”nofollow”>in tables, and use the data computed to
answer followup
questions. In fin” rel=”nofollow”>inance, in” rel=”nofollow”>in addition to bein” rel=”nofollow”>ing able to write well, it’s
important to present in” rel=”nofollow”>information in” rel=”nofollow”>in a professional manner and to analyze fin” rel=”nofollow”>inancial
in” rel=”nofollow”>information. This is part of the assignment expectations and will be considered for
gradin” rel=”nofollow”>ing purposes.
10/3/2016 Background FIN501
Strategic Corporate Fin” rel=”nofollow”>inance (OCT2016FT1)
https://tlc.trident.edu/d2l/le/content/79164/viewContent/1882541/View?ou=79164 1/2
Module 1 Background
THE TIME VALUE OF MONEY AND FINANCIAL STATEMENT
ANALYSIS
The time value of money is an important, fundamental concept in” rel=”nofollow”>in fin” rel=”nofollow”>inance. Time
value of money refers to present value and future value. It is used in” rel=”nofollow”>in various areas
of fin” rel=”nofollow”>inance, in” rel=”nofollow”>includin” rel=”nofollow”>ing capital budgetin” rel=”nofollow”>ing, bond valuation, and stock valuation. It is very
important that you understand the time value of money so that you are prepared to
study more advanced topics in” rel=”nofollow”>in the future.
Time lin” rel=”nofollow”>ines are important to understand future value and present value problems. If
you are havin” rel=”nofollow”>ing difficulty understandin” rel=”nofollow”>ing a time value of money problem, start with a
time lin” rel=”nofollow”>ine. With an annuity due, the cash flows at the begin” rel=”nofollow”>innin” rel=”nofollow”>ing of the period. With an
ordin” rel=”nofollow”>inary annuity, the cash flows occur at the end of the period. If an annuity problem
doesn’t state if the cash flows occur at the begin” rel=”nofollow”>innin” rel=”nofollow”>ing or the end of the period, by
default the cash flows occur at the end of the period.
When cash flows contin” rel=”nofollow”>inue on forever, they are known as perpetuities. To fin” rel=”nofollow”>ind the
present value of a perpetuity, you simply divide the cash flow by the discount rate in” rel=”nofollow”>in
decimal notation.
Review these videos that focus on the time value of money:
Valuation of Money Podcast. (n.d.). Pearson Learnin” rel=”nofollow”>ing Solutions, New York, NY.
Valuation of Money Interactive Video. (n.d.). Pearson Learnin” rel=”nofollow”>ing Solutions, New York,
NY.
JohnFin” rel=”nofollow”>inance (2014). Compound Annual Growth Rate. Retrieved from

JohnFin” rel=”nofollow”>inance (2014). Present Value of a Perpetuity. Retrieved from

JohnFin” rel=”nofollow”>inance (2014). Present Value of a Growin” rel=”nofollow”>ing Perpetuity. Retrieved from
http://www.youtube.com/watch?v=ikRczqxal4
JohnFin” rel=”nofollow”>inance (2014). The Time Period in” rel=”nofollow”>in a Future Value of a Lump Sum. Retrieved
from http://www.youtube.com/watch?v=_TwPBazoywg
Review these website lin” rel=”nofollow”>inks that focus on the time value of money:
McCracken, M., (n.d.). The time value of money. Retrieved
from http://www.teachmefin” rel=”nofollow”>inance.com/timevalueofmoney.html
Getobjects.com (2002). Future value. Retrieved
from http://www.getobjects.com/Components/Fin” rel=”nofollow”>inance/TVM/fv.html
Listen
10/3/2016 Background FIN501
Strategic Corporate Fin” rel=”nofollow”>inance (OCT2016FT1)
https://tlc.trident.edu/d2l/le/content/79164/viewContent/1882541/View?ou=79164 2/2
Privacy Policy | Contact
Fin” rel=”nofollow”>inancial statement analysis is very important for securities analysts. Securities
analysts recommend to portfolio managers what stocks should be bought and sold.
Fin” rel=”nofollow”>inancial statement analysis in” rel=”nofollow”>involves analyzin” rel=”nofollow”>ing various fin” rel=”nofollow”>inancial ratios for a
company over time and comparin” rel=”nofollow”>ing those to the appropriate in” rel=”nofollow”>industry average. For
example, it is important for a company’s ROE to be in” rel=”nofollow”>increasin” rel=”nofollow”>ing over time and greater
than the in” rel=”nofollow”>industry average. Although it’s very important for a firm to have strong
liquidity, it’s a negative sign if a firm’s quick or current ratios are excessively high.
There are five main” rel=”nofollow”>in categories of ratios: liquidity, asset management, debt
management, profitability, and market value.
Review these videos that focus on some fin” rel=”nofollow”>inancial ratios:
JohnFin” rel=”nofollow”>inance (2014). DebttoEquity
Ratio. Retrieved
from http://www.youtube.com/watch?v=0GkYIUfpmQ
JohnFin” rel=”nofollow”>inance (2014). Times Interest Earned Ratio. Retrieved from

Review this website lin” rel=”nofollow”>ink which focuses on fin” rel=”nofollow”>inancial ratios:
NetMBA (n.d.). Fin” rel=”nofollow”>inancial ratios. Retrieved from
http://www.netmba.com/fin” rel=”nofollow”>inance/fin” rel=”nofollow”>inancial/ratios/
Optional Resources
Bookboon.com. (2008). Corporate Fin” rel=”nofollow”>inance. Retrieved from
http://bookboon.com/en/economicsandfin” rel=”nofollow”>inanceebooks
Welch, Ivo. (2014). Corporate Fin” rel=”nofollow”>inance (3rd Ed.). Chpts 2 and 13. Retrieved from
http://book.ivowelch.
in” rel=”nofollow”>info/ed3/toc.html

10/3/2016 SLP FIN501
Strategic Corporate Fin” rel=”nofollow”>inance (OCT2016FT1)
https://tlc.trident.edu/d2l/le/content/79164/viewContent/1882544/View?ou=79164 1/2
Module 1 SLP
THE TIME VALUE OF MONEY AND FINANCIAL STATEMENT
ANALYSIS
Conductin” rel=”nofollow”>ing Fin” rel=”nofollow”>inancial Ratio Analysis
Select a publicly traded U.S. company that has paid a dividend for at least the last
three years, and conduct a fin” rel=”nofollow”>inancial ratio analysis. You will be usin” rel=”nofollow”>ing this company
for other assignments in” rel=”nofollow”>in this course; thus, please spend adequate time locatin” rel=”nofollow”>ing a
company. Please consider reviewin” rel=”nofollow”>ing http://fin” rel=”nofollow”>inance.yahoo.com to locate a company.
The company must have data available for you to conduct a fin” rel=”nofollow”>inancial ratio analysis.
It’s important to select a company in” rel=”nofollow”>in an in” rel=”nofollow”>industry that has in” rel=”nofollow”>industry ratio numbers.
You cannot select a privately held company.
Calculate all the followin” rel=”nofollow”>ing ratios for the company for the past three years and
compare them to the appropriate in” rel=”nofollow”>industry benchmarks:
Liquidity ratios:
Current
Quick
Asset Management ratios:
Inventory turnover
Total assets turnover
Fixed assets turnover
Days sales outstandin” rel=”nofollow”>ing
Debt Management ratios:
EBITDA coverage
Timesin” rel=”nofollow”>interestearned
Total debt to total assets
Profitability ratios:
Return on common equity
Return on total assets
Listen
10/3/2016 SLP FIN501
Strategic Corporate Fin” rel=”nofollow”>inance (OCT2016FT1)
https://tlc.trident.edu/d2l/le/content/79164/viewContent/1882544/View?ou=79164 2/2
Privacy Policy | Contact
Basic earnin” rel=”nofollow”>ing power
Profit margin” rel=”nofollow”>in on sales
Market Value ratios:
Market/book
Price/earnin” rel=”nofollow”>ings
Price/cash flow
Create a table that contain” rel=”nofollow”>ins the ratios for the various years. Then analyze the
in” rel=”nofollow”>information. Look at the trends in” rel=”nofollow”>in the ratios and comment on how they compare to
the in” rel=”nofollow”>industry benchmarks. Which ratios are strong? Which ratios need
improvement? If you were a stock in” rel=”nofollow”>investor, would you buy the company’s common
stock? Why or why not? If you were a bond in” rel=”nofollow”>investor, would you buy the company’s
bonds? Why or why not?
SLP Assignment Expectations
You are expected to:
Describe the purpose of the report and provide a conclusion. An in” rel=”nofollow”>introduction and
a conclusion are important because many busy in” rel=”nofollow”>individuals in” rel=”nofollow”>in the busin” rel=”nofollow”>iness
environment may only read the first and the last paragraph. If those paragraphs
are not in” rel=”nofollow”>interestin” rel=”nofollow”>ing, they never read the body of the paper.
Answer the SLP Assignment question(s) clearly and provide necessary details.
Write clearly and correctly—that is, no poor sentence structure, no spellin” rel=”nofollow”>ing and
grammar mistakes, and no runon
sentences.
Provide citations to support your argument and references on a separate page.
(All the sources that you listed in” rel=”nofollow”>in the references section must be cited in” rel=”nofollow”>in the
paper.) Use APA format to provide citations and references.
Type and doublespace
the paper.
Whenever appropriate, please use Excel to show supportin” rel=”nofollow”>ing computations in” rel=”nofollow”>in an
appendix, present fin” rel=”nofollow”>inancial in” rel=”nofollow”>information in” rel=”nofollow”>in tables, and use the data computed to
answer followup
questions. In fin” rel=”nofollow”>inance, in” rel=”nofollow”>in addition to bein” rel=”nofollow”>ing able to write well, it’s
important to present in” rel=”nofollow”>information in” rel=”nofollow”>in a professional manner and to analyze fin” rel=”nofollow”>inancial
in” rel=”nofollow”>information. This is part of the assignment expectations and will be considered for
gradin” rel=”nofollow”>ing purposes.
10/3/2016 Background FIN501
Strategic Corporate Fin” rel=”nofollow”>inance (OCT2016FT1)
https://tlc.trident.edu/d2l/le/content/79164/viewContent/1882541/View?ou=79164 1/2
Module 1 Background
THE TIME VALUE OF MONEY AND FINANCIAL STATEMENT
ANALYSIS
The time value of money is an important, fundamental concept in” rel=”nofollow”>in fin” rel=”nofollow”>inance. Time
value of money refers to present value and future value. It is used in” rel=”nofollow”>in various areas
of fin” rel=”nofollow”>inance, in” rel=”nofollow”>includin” rel=”nofollow”>ing capital budgetin” rel=”nofollow”>ing, bond valuation, and stock valuation. It is very
important that you understand the time value of money so that you are prepared to
study more advanced topics in” rel=”nofollow”>in the future.
Time lin” rel=”nofollow”>ines are important to understand future value and present value problems. If
you are havin” rel=”nofollow”>ing difficulty understandin” rel=”nofollow”>ing a time value of money problem, start with a
time lin” rel=”nofollow”>ine. With an annuity due, the cash flows at the begin” rel=”nofollow”>innin” rel=”nofollow”>ing of the period. With an
ordin” rel=”nofollow”>inary annuity, the cash flows occur at the end of the period. If an annuity problem
doesn’t state if the cash flows occur at the begin” rel=”nofollow”>innin” rel=”nofollow”>ing or the end of the period, by
default the cash flows occur at the end of the period.
When cash flows contin” rel=”nofollow”>inue on forever, they are known as perpetuities. To fin” rel=”nofollow”>ind the
present value of a perpetuity, you simply divide the cash flow by the discount rate in” rel=”nofollow”>in
decimal notation.
Review these videos that focus on the time value of money:
Valuation of Money Podcast. (n.d.). Pearson Learnin” rel=”nofollow”>ing Solutions, New York, NY.
Valuation of Money Interactive Video. (n.d.). Pearson Learnin” rel=”nofollow”>ing Solutions, New York,
NY.
JohnFin” rel=”nofollow”>inance (2014). Compound Annual Growth Rate. Retrieved from

JohnFin” rel=”nofollow”>inance (2014). Present Value of a Perpetuity. Retrieved from

JohnFin” rel=”nofollow”>inance (2014). Present Value of a Growin” rel=”nofollow”>ing Perpetuity. Retrieved from
http://www.youtube.com/watch?v=ikRczqxal4
JohnFin” rel=”nofollow”>inance (2014). The Time Period in” rel=”nofollow”>in a Future Value of a Lump Sum. Retrieved
from http://www.youtube.com/watch?v=_TwPBazoywg
Review these website lin” rel=”nofollow”>inks that focus on the time value of money:
McCracken, M., (n.d.). The time value of money. Retrieved
from http://www.teachmefin” rel=”nofollow”>inance.com/timevalueofmoney.html
Getobjects.com (2002). Future value. Retrieved
from http://www.getobjects.com/Components/Fin” rel=”nofollow”>inance/TVM/fv.html
Listen
10/3/2016 Background FIN501
Strategic Corporate Fin” rel=”nofollow”>inance (OCT2016FT1)
https://tlc.trident.edu/d2l/le/content/79164/viewContent/1882541/View?ou=79164 2/2
Privacy Policy | Contact
Fin” rel=”nofollow”>inancial statement analysis is very important for securities analysts. Securities
analysts recommend to portfolio managers what stocks should be bought and sold.
Fin” rel=”nofollow”>inancial statement analysis in” rel=”nofollow”>involves analyzin” rel=”nofollow”>ing various fin” rel=”nofollow”>inancial ratios for a
company over time and comparin” rel=”nofollow”>ing those to the appropriate in” rel=”nofollow”>industry average. For
example, it is important for a company’s ROE to be in” rel=”nofollow”>increasin” rel=”nofollow”>ing over time and greater
than the in” rel=”nofollow”>industry average. Although it’s very important for a firm to have strong
liquidity, it’s a negative sign if a firm’s quick or current ratios are excessively high.
There are five main” rel=”nofollow”>in categories of ratios: liquidity, asset management, debt
management, profitability, and market value.
Review these videos that focus on some fin” rel=”nofollow”>inancial ratios:
JohnFin” rel=”nofollow”>inance (2014). DebttoEquity
Ratio. Retrieved
from http://www.youtube.com/watch?v=0GkYIUfpmQ
JohnFin” rel=”nofollow”>inance (2014). Times Interest Earned Ratio. Retrieved from

Review this website lin” rel=”nofollow”>ink which focuses on fin” rel=”nofollow”>inancial ratios:
NetMBA (n.d.). Fin” rel=”nofollow”>inancial ratios. Retrieved from
http://www.netmba.com/fin” rel=”nofollow”>inance/fin” rel=”nofollow”>inancial/ratios/
Optional Resources
Bookboon.com. (2008). Corporate Fin” rel=”nofollow”>inance. Retrieved from
http://bookboon.com/en/economicsandfin” rel=”nofollow”>inanceebooks
Welch, Ivo. (2014). Corporate Fin” rel=”nofollow”>inance (3rd Ed.). Chpts 2 and 13. Retrieved from
http://book.ivowelch.
in” rel=”nofollow”>info/ed3/toc.html

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