Interactive Assignment |Legit essays
Posted: February 16th, 2023
Using the same publicly traded company you used in the Environmental Scanning Interactive Assignment (ExxonMobil), and the downloadable Operating Budget Template Download Operating Budget Template, research the company online by accessing the Mergent University of Arizona Global Campus Library online database which offers company financials, descriptions, history, property, subsidiaries, officers and directors. Also, access the Business Insights: Global University of Arizona Global CampusLibrary online database which offers information on global companies, and industries. It includes SWOT reports, market share data, financial reports, case studies, business news, and company comparison charts. (View the Getting Started With MergentLinks to an external site. and Business Insights: GlobalLinks to an external site.documents for suggested methods of searching University of Arizona Global Campus Library databases generally as well as specific advice for searching these two databases). You can always conduct research using credible online sources of corporate financial information, just be sure that wherever you obtain financial information that you cite your source.
For this Interactive Assignment, you are going to look at the financial statements for the company you selected and, using the previous quarter’s financial data, interpret the data and propose a budget for the next Quarter based on your current and previous analysis of company performance. Complete the budget template using this Operating Budget Template Download Operating Budget Template:
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- List your current sales, discounts and allowances, net sales, margins, operating costs, and earning before and after taxes.
- Choose a minimum of two financial ratios (below) and include in your analysis.
- Prepare the next quarter’s budget based on your interpretation of past data.
Include at least two of the following types of relevant financial ratios in your analysis. Review the online article Analyze Investments Quickly With RatiosLinks to an external site. (Elmerraji, 2017) and Chapter 5 in the Abraham’s textbook to help with this portion of the budget:
- Profitability Ratio
- Liquidity Ratio
- Solvency Ratio
- Valuation Ratio
- Leverage Ratio
(NOTE: Incorporate the feedback you receive from your instructor and peers and save your work. It will be part of your Strategic Plan Final Project for this course).
Initial Post: In your initial post, provide a brief description of your company and provide a summary of your Operating Budget along with a rationale that supports suggested budgetary changes. Attach your Operating Budget Template to your initial post for review by your instructor and your peers.
SOLUTION
When analyzing a company’s financial statements, it is essential to consider the income statement, balance sheet, and cash flow statement. The income statement shows a company’s revenues, expenses, and net income over a particular period. The balance sheet provides a snapshot of a company’s financial position, including its assets, liabilities, and equity, at a specific point in time. The cash flow statement shows the inflows and outflows of cash and cash equivalents over a particular period.
To prepare a budget, it is necessary to analyze the previous quarter’s financial data to identify trends and make informed assumptions about future performance. A budget typically includes projected revenues, expenses, and cash flow for the upcoming quarter. It is essential to consider factors such as market conditions, competition, and economic trends when preparing a budget.
In terms of financial ratios, profitability ratios measure a company’s ability to generate profits relative to its revenue, liquidity ratios measure a company’s ability to meet its short-term obligations, solvency ratios measure a company’s ability to meet its long-term obligations, valuation ratios measure a company’s stock market value, and leverage ratios measure a company’s use of debt to finance its operations.
When choosing financial ratios to include in an analysis, it is essential to consider the company’s industry and specific circumstances. For example, a company in a capital-intensive industry may have a higher leverage ratio than a company in a service industry, and this does not necessarily indicate poor financial health.
In conclusion, conducting financial analysis and budgeting requires a deep understanding of a company’s financial statements, industry, and market conditions. It is crucial to use reliable sources of financial data and apply critical thinking and analytical skills when interpreting the information.
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