nike company 3

COURSE PROJECT/CHECKPOINT ASSIGNMENT

Each student will be assigned a company ( Nike )for which they will conduct a financial analysis. Included in the analysis will be the following items:

  • Background Information/Environmental Scan
  • DuPont Identity
  • Current Ratio
  • Quick Ratio
  • Inventory Holding Period
  • Average Collection Period
  • Debt Ratio
  • Free Cash Flow
  • Market Value Added
  • Economic Value Added
  • Dividend Yield
  • Required Rate of Return based on the Capital Asset Pricing Model

After calculating the above items, the student will make a recommendation to buy, sell, or hold the company’s common stock at its current price. The recommendation should be based on the calculations required plus any other information about the company that the student believes pertinent.

In a separate section of the paper, the student will describe a situation in which his/her company would make use of capital budgeting. No calculations are required. This section of the paper would be about one to two pages describing the process that the company would make use of for analyzing the capital budgeting situation.

In a third section of the paper, the student should describe how the company would use cost-volume-profit analysis for one of its products. No calculations are necessary; just provide an explanation of how the process works. This section of the paper should be one to two pages.

Grading for the analysis will be based on the following:

  • Environmental Scan/Background 20 points
  • Ratio Calculations 15 points
  • Free Cash Flow Calculations 8 points
  • Market Value Added? Economic Value Added 7 points
  • Capital Budgeting Discussion 15 points
  • Cost-Volume-Profit Analysis Discussion 15 points
  • Conclusions 10 points
  • Quality of Writing and Sources 10 points

Extra credit is not applicable or available in this course.

Rubric for Company Analysis

BUS 311, Financial Management

Critical Assignment

The critical assignment for BUS 311, Financial Management is one of a series of assignments designed to demonstrate that students have achieved the learning outcomes established for the majors in the College of Business and Management.

The specific objective of this critical assignment is to assure that students have a sufficient level of accounting and finance skills to conduct financial analyses of an organization. These exercises will provide students with the opportunity to integrate and implement theory to practice and will prepare students to develop a comprehensive business plan in the capstone course during the final year of study.

For the purpose of this exercise, students will choose a company for which they will conduct an environmental scan and a financial analysis. The analysis of the company should culminate with students recommending that the company is “excellent,” “healthy,” or “ill.” Students will be evaluated based on correctness of the calculations, the insight of the analysis, and the quality of the discussion relating to the requirements.

Before performing the financial analysis, students will prepare an environmental scan, which will discuss the various forces with which an organization must contend to assure that its business model has a chance for success.

The specific calculations should include:

  • DuPont Identity
  • Current Ratio
  • Quick Ratio
  • Inventory Holding Period
  • Average Collection Period
  • Debt Ratio
  • Dividend Yield
  • Required Rate of Return based on the Capital Asset Pricing Model
  • Free Cash Flow
  • Market Value Added
  • Economic Value Added

Additionally, students will be expected to prepare an executive summary of the process of capital budgeting, using an example that is specific to the company that is being analyzed. An executive summary of cost-volume-profit analysis is also required, using an example that is specific to the company that is being analyzed.

The written paper is to be typed double–spaced, 1’ margins, Times New Roman and 12-point font, with correct spelling and grammar, proper citation, references, with a cover page and organized with headings. The instructor’s approval of the topic is required.

The following Library resources and websites could assist students in conducting the research to do the Critical Assignment:

Lynn Library Sources:

Business majors can also avail themselves of all Lynn University Library databases (Links to an external site.) and the business specific databases (Links to an external site.) such as: ABI/Inform, Business Insights: Essentials, Passport by Euromonitor, and Statista.

Directions to access:

Go to Lynn University Website: www.lynn.edu (Links to an external site.)

Click the Libraries Tab

Click Databases

Click on the « All Subject » dropdown= Business http://lynnlibrary.libguides.com/az.php?s=43296 (Links to an external site.)

Websites:

www.zacks.com (Links to an external site.)

www.bloomberg.com/markets/rates/index.html (Links to an external site.)

www.moodys.com (Links to an external site.)

www.bondsonline.com (Links to an external site.)

www.federalreserve.gov (Links to an external site.)

www.morningstar.com (Links to an external site.)

http://finance.yahoo.com/ (Links to an external site.)

http://www.gurufocus.com/ (Links to an external site.)

https://www.google.com/finance (Links to an external site.)

Student Learning Outcomes:

Students will be able to:

  1. Conduct an environmental scan, indicating future prospects for a company. (SLO 3.3, SLO 7.4, SLO 12.3) (20% of grade for project)
  2. Calculate and interpret financial ratios to ascertain the overall health of a company. (SLO 1.2, SLO 6.1, SLO 13.4) (15% of grade for project)
  3. Determine and explain free cash flow to assess the cash position for a company. (SLO 6.2, SLO 10.4, SLO 13.4) (8% of grade for project)
  4. Determine and explain the market value added and economic value added to ascertain whether a company is creating or destroying value. (SLO 6.2, SLO 13.4) (7% of grade for project)
  5. Specifically describe the capital budgeting process, in particular the net present value method in order to demonstrate the importance of the timing and risks associated with cash flows. (SLO 6.3, SLO 6.5, SLO 10.4, SLO 13.3, SLO 13.4) (15% of grade for project)
  6. Specifically describe cost-volume-profit analysis for the company to assure the understanding of the elements of operating income. (SLO 1.5, SLO 11.6, SLO 13.3, SLO 13.4) (15% of grade for project)
  7. Make a recommendation that the company’s financial condition is: “excellent”, “healthy”, or “ill”. (SLO 13.3, SLO 13.4) (10% of grade for project)
  8. Demonstrate proficient writing skills (SLO 13.6) (10% of grade for project)