Why the analysis of a statement of cash flows is important

Reference no: EM131520591

Assignment: Ratio Analysis and Recommendation

For this part of the course project, you will demonstrate your ability to evaluate the strengths and weaknesses of a company through financial analysis.

This is a two-part assignment. To complete this assignment, do the following:

Part 1: Cash Flow Analysis

Your client, Jennifer Logan, is a relatively inexperienced investor and is trying to make a decision whether to sell her investment in ABC Company or continue to hold her equity position in it. Ms. Logan has asked you to analyze to analyze ABC's cash flow statement and provide

a recommendation. Using ABC Company's Statement of Cash Flows, write an analysis and recommendation for Ms. Logan.

1. Download and read ABC Company's Statement of Cash Flows. (SEE ATTACHED)

2. Write a 3-4 page document for Ms. Logan that includes the following information:

1. Define and explain balance sheet, income statement, and statement of cash flows.

2. Describe how the statement of cash flows relates to the income statement and balance sheet.

3. Explain why the analysis of a statement of cash flows is important to investors.

4. Analyze and judge the cash flow from operating activities at ABC Company. Is ABC effective at utilizing funds within the company?

5. Analyze and explain the significance of each item from the investing section of the statement.

6. Analyze the cash flow from the financing section of the statement and describe why the dividends section is important to your client.

7. Summarize your analysis and give your opinion on how effective ABC Company is at managing its cash flow, from an investor's perspective. Also explain whether you think ABC Company has enough cash on hand to sustain it in the long term.

8. Recommend whether Ms. Logan should hold or sell her investment in ABC Company.

3. Adhere to professional formal and stylistic principles, and be sure to cite sources when necessary.

Part 2: Executive Summary

Write a 2-3 page executive summary of how the Federal Reserve's monetary policies may affect economic growth, both from a corporate and a personal finance perspective. In order to ensure that your response is complete, please be sure to include commentary on the following concepts:

• The banking industry
• TVM
• Personal and corporate saving rates
• Equity financing vs. debt financing
• Financial analysis.

Attachment:- Module_Project.rar

Reference no: EM131520591

Questions Cloud

Experience from leveraging female expatriates : Examine the major benefits that companies experience from leveraging female expatriates. Review the key success factors and techniques used in the expatriate.

Write two emails based on the scenario : Write TWO emails based on the scenario below. Scenario: You need to ask your manager for two weeks off to attend a wedding in Japan

Regarding health insurance plans : Various programs provide free or low-cost coverage to millions of families with limited income. Develop a scenario in which an individual or family is currently

Discuss the advantages in w ltd undertaking benchmarking : You have recently been appointed to lead the management accounting department of W Ltd, which is a small engineering company engaged in the manufacture.

Why the analysis of a statement of cash flows is important : Explain why the analysis of a statement of cash flows is important to investors. Analyze and judge the cash flow from operating activities at ABC Company.

Wondering the same thing for several weeks : "What's happened to Bob?" was the question asked Jack Otto, production supervisor, by one of his manufacturing workers, Clyde Fisher.

How newfound research synthesis skills help in real world : How can your newfound research synthesis skills help you in the "real world"

Explain the concept of the product portfolio : Pharmia plc is a drugs manufacturing company. It is operating in an intensively competitive market and prices are being forced down all over the world.

Calculate cost of proposed recommendations for three west : Calculate cost of the proposed recommendations for 3 West. Compute totals for each column. Calculate the new personnel budget. Compute totals for each column.

User Account

All Pages