Investing in products and services should produce returns so that stockholders, stakeholders, and others are interested in the organization.
Using the company you chose in M1 Assignment 3 to analyze the financials:
Identify a new product or service—either recently rolled out or about to be rolled out
Analyze the quality of the company’s existing projects.
What is the return on equity earned by the company? Based upon this return, is the company picking good projects?
What is the return on capital earned by the company? Based upon this return, is the company picking good projects?
Discuss how the company financed the initiative and why it was perceived to be advantageous.
How sensitive has this company’s value been to changes in macro-economic variables such as interest rates, currency movements, inflation, and the economy?
How sensitive has this company’s operating income been to changes in the same variables?
How sensitive is the sector’s value and operating income to the same variables?
Write a 2-3-page paper in Word format (600 words minimum). Apply APA standards to citation of sources.
Proficient understanding of project financing; addressed tasks posed in the assignment. (18/28)
Analyzed the return on equity and return on capital earned by the company. Provided the conclusions about the quality of the company’s existing projects. (18/28)
Discussed the funding sources of the initiative. Analyzed the sensitivity of this company’s operating income from micro- and macroeconomic factors. (18/28)
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; displayed accurate spelling, grammar, and punctuation. (16/16)
Submission was on time, by Wednesday. Points deducted: 0
References provided. Points deducted: 0
Substantial: 600 words minimum. Points deducted: 0
Your introductory paragraph provided a roadmap for your paper. Your discussion of Wal-Mart’s new initiative – the making and selling of donuts along with pizza – is identified. What did the latest product cost? What was the return on equity and return on capital earned by the company for this product? Discuss how the company financed the initiative and why it was perceived to be advantageous. Every time a business makes a decision or explores a new venture, there will always be associated risks that the company must be willing to accept. Wal-Mart will look at their operating income to make sure that the new product decision would be successful and that they will not put the company in jeopardy. What do the free cash flows tell you? Analyze the sensitivity of this company’s operating income from micro- and macroeconomic factors. Resubmit and I will update your grade.