Strayer JWI531 Assignments Latest 2021 January (Full)

JWI531 FINANCIAL MANAGEMENT II

Assignment 1

Enterprise Risk Management and Moat Strength

Congratulations! You have just gotten the opportunity of a lifetime to work as a senior financial advisor for Warren Buffett. You will be responsible for conducting financial analyses on two companies Mr. Buffett is reviewing, AMD and Intel, and providing recommendations for action to the CFOs of those companies.

Instructions

In this assignment, you will evaluate several risk scenarios and make recommendations on how to position the company for success by putting in place “reasonable” protections against downsides. To prepare for the assignment: (1) download and review the latest annual reports for both companies from the Investor Relations page of each company’s website; (2) read the Shareholder Letter and the Risks section carefully, and (3) read the Morningstar Analyst Reports with particular emphasis on the Moat and Risk sections.

A. Complete the Assignment 1 Worksheet to create risk profiles for both companies. The guidance for this is found on pages 24-29 of The CFO Guidebook.

B. Summarize your Analysis and Recommendations by addressing the following questions:

i. Where is each company in its corporate lifecycle (startup, growth, maturity, or decline)?

Explain.

ii. Based on your review of the analysts’ reports and the 10-K reports, which company appears to have more risk? Why?

iii. Which categories of risk pose the greatest threat to each organization? Why?

iv. Which company has the stronger economic moat? Explain.

v. For the company that has the weaker economic moat, what two risk factors should they prioritize to improve their risk mitigation and strengthen their competitive advantage?

Make specific reference to the applicable risk management tools discussed on pages 30- 63The CFO Guidebook.

Submission Requirements

A. Complete and submit the Assignment 1 Worksheet component of the Workbook, along with your written work for Part B, through the assignment link in Blackboard.

B. Format your written responses for Analysis and Recommendation as follows:

• Typed, double-spaced, professional font (size 10-12), including headings and subheadings (to identify main topics and subtopics), with one-inch margins on all sides.

• References must be included and provide appropriate information that enables the reader to locate the original source.

o Application and analysis of course materials and resources is expected.

o At least one additional source beyond the course materials must be cited to support your analysis and recommendations.

• Include a cover page containing the title of the assignment, your name, the professor’s name, the course title, and the date.

• The maximum length is 4 pages, excluding your cover page, completed worksheets, and reference list

JWI531 FINANCIAL MANAGEMENT II

Assignment 2

Performance Management and Valuation

The risk analysis work you did in the first assignment was a great start. It helped to paint a picture of where AMD and Intel are in their corporate lifecycles, the threats and opportunities each faces, and the defensibility of their economic moats – a metaphor that Buffett loves to use.

In this assignment, you will continue your analysis by comparing key performance management metrics of our two companies, identifying areas of relative strength and weakness, and suggesting ways that each company could improve, thereby increasing its valuation. To do this, you will examine trends in order to identify variances and comparisons to: (1) establish benchmarks, (2) identify best practices, and (3) look for signs of superior performance. This analysis is critical in determining the value of each company, as well as evaluating whether potential acquisition or merger opportunities exist which could create greater value and synergies than those of operating the companies as separate entities.

Instructions

To prepare, reread the Morningstar Analyst’s Report and the most recent annual reports for both companies with a particular focus on the Income Statement and Statement of Cash Flows.

A. Complete the Assignment 2 Worksheet to compare key performance metrics and ratios for both companies in order to see how performance can be impacted by manipulating certain financial levers. The guidance for this is found on pages 78-100 of The CFO Guidebook.

B. Summarize your Analysis and Recommendations by answering the following questions:

i. Performance Metrics:

a. Which company is a more efficient generator of income?

b. Which company is growing faster?

c. Using financial health ratios, which company is more profitable?

d. Which company has stronger valuation ratios?

e. Overall, which is the better run company and why?

ii. Merger Synergies:

a. If there was an acquisition, which company is the most likely acquirer? Why?

b. Would you recommend a merger or acquisition to increase the moat strength of the combined companies? Why or why not?

• If you support a merger or acquisition, identify 3 performance metrics that could be improved by a merger and explain how they would be improved. Guidance for this is found on pages 101-110 of The CFO Guidebook.

• If you do not support a merger or acquisition, explain your rationale and why the value of each company is best preserved/increased by remaining separate. The guidance for this is found on pages 111-117 of The CFO Guidebook.

Submission Requirements

A. Complete and submit the Assignment 2 Worksheet component of the Workbook, along with your written work for Part B, through the assignment link in Blackboard.

B. Format your written responses for Analysis and Recommendation as follows:

• Typed, double-spaced, professional font (size 10-12), including headings and subheadings (to identify main topics and subtopics), with one-inch margins on all sides.

• References must be included and provide appropriate information that enables the reader to locate the original source.

o Application and analysis of course materials and resources is expected.

o At least one additional source beyond the course materials must be cited to support your analysis and recommendations.

• Include a cover page containing the title of the assignment, your name, the professor’s name, the course title, and the date.

• The maximum length is 4 pages, excluding your cover page, completed worksheets, and reference list.

JWI531 FINANCIAL MANAGEMENT II

Assignment 3

Forecasting

In the first two assignments, you looked at: (1) how AMD and Intel are positioned to take advantage of opportunities and manage risks, and (2) how well each is currently managing their performance. As part of this analysis, you identified potential areas for improvement and considered whether a merger or acquisition could strengthen their financial performance.

Based on your insights and recommendations, Buffett is now asking for an assessment of what the future holds for these businesses. In order to deliver this, you must be able to accurately forecast cash flows (the money that comes in and the money that goes out). Like any predictions about the future, these forecasts require the collection and analysis of reliable data, including leading indicators in the broader economy as well as the market forces that impact competitive dynamics. This analysis will enable you to make smarter decisions about how to plan for the future in order to maximize returns, minimize risks, and beat the competition.

Instructions

For this assignment, you will continue to use the published data from the most recent annual reports you have been studying, as well as analyst reports and other resources available on the Internet.

A. Complete the Assignment 3 Worksheet to assemble and assess your forecasts of working capital. The guidance for this is found on pages 131-163 of The CFO Guidebook.

B. Summarize your Analysis and Recommendations by addressing the following questions:

i. Which metrics/trends are most critical for forecasting future performance and for budgeting?

To answer this, you must include an analysis of both past trend performance AND the applicability and reliability of key forecast indicators. In your response, consider:

a. Which company has the stronger income statement? Explain.

b. Which company has the stronger cash flows? Explain.

c. Which company has the stronger operating performance? Explain.

ii. Why are the metrics/trends in the data sets above so critical? How reliable are they as predictors of future performance?

iii. Based on the data you have analyzed, which metrics would you focus on to improve the performance of the weaker company against the stronger one? Why?

a. How would you do this? What specific financial tools would you apply? Why?

b. What would “realistic” improvement look like?

c. How would you measure success?

v. If you were given the opportunity to join either of these two companies as the new CFO, which one would you pick, and why? In considering your answer to this question, the majority of your compensation plan will be tied to the improvements you can help to drive. Therefore, you should not base your decision on which company is currently performing better, but on which company’s performance – and valuation – has the greatest potential for growth.

Submission Requirements

A. Complete and submit the Assignment 3 Worksheet component of the Workbook, along with your written work for Part B, through the assignment link in Blackboard.

B. Format your written responses for Analysis and Recommendation as follows:

• Typed, double-spaced, professional font (size 10-12), including headings and subheadings (to identify main topics and subtopics), with one-inch margins on all sides.

• References must be included and provide appropriate information that enables the reader to locate the original source.

o Application and analysis of course materials and resources is expected.

o At least one additional source beyond the course materials must be cited to support your analysis and recommendations.

• Include a cover page containing the title of the assignment, your name, the professor’s name, the course title, and the date.

• The maximum length is 4 pages, excluding your cover page, completed worksheets, and reference list.