Step 5 – Comparative Risk Assessment
When the CFO returns your report with her suggestions, she attaches a note saying, “This is a LOT of information! Would you mind summarizing your findings by answering the following questions?” Show your calculations.
Question 13: The profit margin is an indication of pricing. Does one company price lower than the other? If so, which company?
Question 14: Does one company turn over assets faster than the other? If so, which one? This is an indication of supply chain management and product life.
Question 15: Does one company have more debt than the other? If so, which one?
Question 16: Does one company earn a greater return on shareholder investment? If so, which one?
Question 17: Are there any significant differences between companies in Balance Sheet ratios? Is one company more at risk, financially? If so, indicate which one.
The CFO continues, “Please also summarize the significant risks and important aspects of the business for both companies from the perspective of management and external auditors. Thanks again for going the extra mile for us!”
Submit your Comparative Risk Assessment Report and Calculations to the dropbox below. Be sure to show your calculations in Excel and provide a narrative analysis in PowerPoint. Your narrative analysis should summarize the results of your analysis and make recommendations for the benefit of company.
Before you submit your assignment, review the competencies below, which your instructor will use to evaluate your work. A good practice would be to use each competency as a self-check to confirm you have incorporated all of them in your work.
3.1 Identify numerical or mathematical information that is relevant in a problem or situation.
3.2 Employ mathematical or statistical operations and data analysis techniques to arrive at a correct or optimal solution.
3.3 Analyze mathematical or statistical information, or the results of quantitative inquiry and manipulation of data.
3.4 Employ software applications and analytic tools to analyze, visualize, and present data to inform decision-making.
10.1 Apply relevant microeconomics principles to support strategic decisions for the organization.
10.2 Analyze financial statements to evaluate and optimize organizational performance.