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531 – Assignment 1 (1202) Page 1 of 3
JWI 531: Financial Management II
Assignment 1
© Strayer University. All Rights Reserved. This document
contains Strayer University confidential and proprietary
information and may
not be copied, further distributed, or otherwise disclosed, in
whole or in part, without the expressed written permission of
Strayer
University. This document is subject to change based on the
needs of the class.
Assignment 1: Enterprise Risk Management and Moat Strength
Due Week 3, Sunday (18% of final grade)
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 companies Mr. Buffett is
reviewing, and providing recommendations for action to the
CFOs of those companies. The names of
these companies will be provided by your professor in the first
week of the course.
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-
63 of The CFO Guidebook.
531 – Assignment 1 (1202) Page 2 of 3
JWI 531: Financial Management II
Assignment 1
© Strayer University. All Rights Reserved. This document
contains Strayer University confidential and proprietary
information and may
not be copied, further distributed, or otherwise disclosed, in
whole or in part, without the expressed written permission of
Strayer
University. This document is subject to change based on the
needs of the class.
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:
-spaced, professional font (size 10-12),
including headings and subheadings (to
identify main topics and subtopics), with one-inch margins on
all sides.
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.
your name, the professor’s name,
the course title, and the date.
, excluding your cover page,
completed worksheets, and
reference list.
531 – Assignment 1 (1202) Page 3 of 3
JWI 531: Financial Management II
Assignment 1
© Strayer University. All Rights Reserved. This document
contains Strayer University confidential and proprietary
information and may
not be copied, further distributed, or otherwise disclosed, in
whole or in part, without the expressed written permission of
Strayer
University. This document is subject to change based on the
needs of the class.
RUBRIC
Weight: 18% of
Course Grade
Assignment 1:
Enterprise Risk Management and Moat Strength
CRITERIA Unsatisfactory Low Pass Pass High Pass Honors
1. Complete the
assignment
worksheet
Weight: 30%
Did not submit
worksheet or had
fewer than 60%
correct data sets
entered.
Submitted
worksheet had
between 60%
and 69% correct
data sets.
Submitted
worksheet had
between 70%
and 79% correct
data sets.
Submitted
worksheet had
between 80%
and 89% correct
data sets.
Submitted
worksheet had
90% or higher
correct data sets.
2. Present
synopsis of
data
Weight: 30%
Synopsis was
missing,
incomplete,
inaccurate, or did
not align with
data.
Synopsis was
overly simplistic;
restated the
data, but did not
provide a
coherent
overview.
Synopsis was
good; provided
general snapshot
of key data, but
did not focus on
the most critical
elements.
Synopsis was
very good;
focused on the
most critical
elements with
only minor
elements
unclear/missing.
Data synopsis
was excellent;
accurately
highlighted key
data presented in
both annual
reports and third-
party sources.
3. Present and
defend sound
recommended
finance
strategies
Weight: 30%
Recommended
strategies were
missing,
superficial,
and/or were not
supported by
data and
analysis. No
options were
presented.
Recommended
strategies were
basic or were not
supported by
data and
analysis or tied
to desired
outcomes. Made
minimal
reference to
options, and did
not explain why
these were not
recommended.
Recommended
strategies were
good, but lacked
clarity on how
they could be
implemented to
drive outcomes.
Addressed other
options, but was
unclear why
these were not
chosen.
Presented and
defended very
good finance
strategies; solid
connection to
core finance
principles and to
real-world
circumstances.
Very good
consideration of
viable options
with good
rationale for why
options were not
chosen.
Presented and
defended
excellent finance
strategies;
exemplary
connection to core
finance principles
and to real-world
circumstances.
Excellent
consideration of
viable options with
very clear
rationale for why
options were not
chosen.
4. Include
appropriate
citations and
use
professional
writing
standards
Weight: 10%
No citations
provided and/or
references to
course materials
were missing or
did not support
key content in
submission;
numerous writing
mistakes.
Included some
citations and
references to
course materials,
but failed to cite
for several key
references;
contained
distracting
grammatical or
formatting errors.
Citations and
references to
both course
materials and
additional
sources were
properly
documented;
contained some
grammatical and
formatting errors.
Citations and
references to
both course
materials and
additional
sources were
properly
documented;
contained minor
grammatical and
formatting errors.
Citations and
references to both
course materials
and additional
sources were
properly
documented; free
from grammatical
and formatting
errors; adhered to
maximum length.
Assignment 1SAMPLE COMPANYRisk Ranking
(pg. 26)Risk Name
(10-K Annual Report, Other)Description of the risk Risk Profile
(Pg. 28)Mitigation Plan
(Pg 30)1 - highest severity/frequency (on the list on my
table)License RenewalsForecasts of revenue are based on
customers renewing their software license contracts. If price
increases, customer service drops, or competition increases,
then renewals and revenue will decrease.Financial Risk. Could
also be partly operational, strategic, industry, or brandTake
internal actions to mitigate the risk. This risk cannot be
accepted or transferred. Internal actions include enuring that
our pricing reflects market competition and customer
expectations, that our products are meeting requirements, that
our customer service is providing the highest level support, that
we identify clients that are at risk of not renewing and actions
are taken.Amazon Risk Ranking
(pg. 26)Risk Name
(10-K Annual Report, Other)Description of the risk Risk Profile
(Pg. 28)Mitigation Plan
(Pg 30)WalmartRisk Ranking
(pg. 26)Risk Name
(10-K Annual Report, Other)Description of the risk Risk Profile
(Pg. 28)Mitigation Plan
(Pg 30)
&"Calibri Bold,Bold"&14&K000000&A
&"Calibri,Regular"&K000000&D
&"Calibri,Regular"&K000000&F
&"Calibri,Regular"&K000000&P
Instructions
1. The purpose of this template is to gather data that will be
analyzed and discussed in the Assignment Part B submission.
Insert the name of the company in the "Company 1 or Company
2" headings so we know which company is being reviewed.
2. The template uses the terminology in the CFO Guidebook
chapter on Risks.
3. Risks of the company are disclosed in the annual 10-K report
section Item 1A Risk Factors. Use the risks in the 10-K as your
basis for your template. You can also get additional risks from
the Morningstar Analyst Report, or from news articles about the
company. Try to narrow down the laundry list of risks to a few
unique (only applies to one company but not the other) and
major risks.
4. There is no "magic" number of risks to be included in your
template. Try to aim for 3-5 risks per company to compare and
analyze. Pick the risks.
5. You can delete extra rows, or add rows. You can also change
the font size and the column widths. Keep the headings
standard. While not a requirement, if you believe an additional
column is required to better describe/classify your risks, then
add it.
6. While not a requirement, you can copy/paste the Excel
completed table as a picture to your Word document if it makes
it easier to reference in your analysis and recommendations.
Assignment 2COMPANY 1 NAME HERECOMPANY 2 NAME
HEREMorningstar Analyst
Report2017201820172018ValuationPrice/SalesPrice/EarningsPr
ice/BookEarnings Yield %GrowthRevenue %Operating income
%Net Income %Financial HealthQuick Ratiointerest
CoverageDebt/EquityProfitabilityROAROEROICNet margin %
&"Calibri Bold,Bold"&14&K000000&A
&"Calibri,Regular"&K000000&D
&"Calibri,Regular"&K000000&F
&"Calibri,Regular"&K000000&P
Instructions
1. The purpose of this template is to gather data that will be
analyzed and discussed in the Assignment Part B submission.
Insert the name of the company in the "Company 1 or Company
2" headings so we know which company is being reviewed.
2. The template uses the ratio terminology in the CFO
Guidebook. We have also provided you with a Course Ratio
Checklist you can use to understand what the ratios mean and
how they are calculated. Please use Current Year ratios as the
base ratios. For example, the most recent full year.
3. Ratios for the companies are included in the Morningstar
analyst report provided in the course. Some ratios are also
provided in the 10-K Annual Report, from online sources, or
can be calculated - but for this exercise you can use the
Morningstar analyst report as you primary source.
4. Do not delete ratios from the table. There is no requirement
to add extra ratios, unless your believe there are othe ratios that
best helps you describe the performance impacting the valuation
of the companies. More is not necessarily better - we are
looking for quality over quantity.
5. The ratios in this execrcise are based on historical
performance. When comparing the ratios of the two companies
side-by-side, you will notice differences. One company may
seem to have performed better - we are looking for your insight
for that difference in performance.
6. You can also change the font size and the column widths.
Keep the headings standard. While not a requirement, if you
believe an additional column is required to better
describe/classify your risks, then add it.
7. While not a requirement, you can copy/paste the Excel
completed table as a picture in your Word document if it makes
it easier to reference in your analysis and recommendations.
Assignment 3COMPANY 1 NAME HERECOMPANY 2 NAME
HEREMorningstar Analyst Report Data20172018Forecast
(optional)20172018Forecast (optional)Income
StatementRevenue (Bil)Operating Income (Bil)Net Income
(Bil)Operating PerformanceGross Margin %Operating Margin
%Net Margin %Days Sales OutstandingDays InventoryDays
PayablesReceivables TurnoverInventory TurnoverFixed Asset
TurnoverTotal Asset Turnover
&"Calibri Bold,Bold"&14&K000000&A
&"Calibri,Regular"&K000000&D
&"Calibri,Regular"&K000000&F
&"Calibri,Regular"&K000000&P
Instructions
1. The purpose of this template is to gather data that will be
analyzed and discussed in the Assignment Part B submission.
Insert the name of the company in the "Company 1 or Company
2" headings so we know which company is being reviewed.
2. You will be reviewing the financial data from various years
looking for trends.
3. The template uses the ratio terminology in the CFO
Guidebook. We have also provided you with a Course Ratio
Checklist you can use to understand what the ratios mean and
how they are calculated.
4. Ratios for the companies are included in the Morningstar
analyst report provided in the course. Some ratios are also
provided in the 10-K Annual Report, from online sources, or
can be calculated - but for this exercise you can use the
Morningstar analyst report as you primary source.
5. Do not delete ratios from the table. There is no requirement
to add extra ratios, unless your believe there are othe ratios that
best helps you describe the performance impacting the forecast
of the companies. More is not necessarily better - we are
looking for quality over quantity.
6. When comparing the forecasts of the two companies side-by-
side, you will notice differences. One company may seem to
have better trends - we are looking for your insight of the
difference in performance.
7. You can also change the font size and the column width.
Keep the headings standard.
8. While not a requirement, you can copy/paste the Excel
completed table as a picture in your Word document if it makes
it easier to reference in your analysis and recommendations.

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531 – Assignment 1 (1202) Page 1 of 3 JWI 531 Financial M.docx

  • 1. 531 – Assignment 1 (1202) Page 1 of 3 JWI 531: Financial Management II Assignment 1 © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class. Assignment 1: Enterprise Risk Management and Moat Strength Due Week 3, Sunday (18% of final grade) 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 companies Mr. Buffett is reviewing, and providing recommendations for action to the
  • 2. CFOs of those companies. The names of these companies will be provided by your professor in the first week of the course. 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:
  • 3. 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- 63 of The CFO Guidebook.
  • 4. 531 – Assignment 1 (1202) Page 2 of 3 JWI 531: Financial Management II Assignment 1 © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class. 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: -spaced, professional font (size 10-12), including headings and subheadings (to
  • 5. identify main topics and subtopics), with one-inch margins on all sides. 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. your name, the professor’s name, the course title, and the date. , excluding your cover page, completed worksheets, and reference list. 531 – Assignment 1 (1202) Page 3 of 3 JWI 531: Financial Management II
  • 6. Assignment 1 © Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class. RUBRIC Weight: 18% of Course Grade Assignment 1: Enterprise Risk Management and Moat Strength CRITERIA Unsatisfactory Low Pass Pass High Pass Honors 1. Complete the assignment worksheet Weight: 30%
  • 7. Did not submit worksheet or had fewer than 60% correct data sets entered. Submitted worksheet had between 60% and 69% correct data sets. Submitted worksheet had between 70% and 79% correct data sets. Submitted worksheet had between 80%
  • 8. and 89% correct data sets. Submitted worksheet had 90% or higher correct data sets. 2. Present synopsis of data Weight: 30% Synopsis was missing, incomplete, inaccurate, or did not align with data. Synopsis was
  • 9. overly simplistic; restated the data, but did not provide a coherent overview. Synopsis was good; provided general snapshot of key data, but did not focus on the most critical elements. Synopsis was very good; focused on the most critical elements with
  • 10. only minor elements unclear/missing. Data synopsis was excellent; accurately highlighted key data presented in both annual reports and third- party sources. 3. Present and defend sound recommended finance strategies Weight: 30%
  • 11. Recommended strategies were missing, superficial, and/or were not supported by data and analysis. No options were presented. Recommended strategies were basic or were not supported by data and analysis or tied to desired outcomes. Made
  • 12. minimal reference to options, and did not explain why these were not recommended. Recommended strategies were good, but lacked clarity on how they could be implemented to drive outcomes. Addressed other options, but was unclear why these were not chosen.
  • 13. Presented and defended very good finance strategies; solid connection to core finance principles and to real-world circumstances. Very good consideration of viable options with good rationale for why options were not chosen. Presented and defended
  • 14. excellent finance strategies; exemplary connection to core finance principles and to real-world circumstances. Excellent consideration of viable options with very clear rationale for why options were not chosen. 4. Include appropriate citations and use
  • 15. professional writing standards Weight: 10% No citations provided and/or references to course materials were missing or did not support key content in submission; numerous writing mistakes. Included some citations and references to
  • 16. course materials, but failed to cite for several key references; contained distracting grammatical or formatting errors. Citations and references to both course materials and additional sources were properly documented; contained some grammatical and
  • 17. formatting errors. Citations and references to both course materials and additional sources were properly documented; contained minor grammatical and formatting errors. Citations and references to both course materials and additional sources were properly
  • 18. documented; free from grammatical and formatting errors; adhered to maximum length. Assignment 1SAMPLE COMPANYRisk Ranking (pg. 26)Risk Name (10-K Annual Report, Other)Description of the risk Risk Profile (Pg. 28)Mitigation Plan (Pg 30)1 - highest severity/frequency (on the list on my table)License RenewalsForecasts of revenue are based on customers renewing their software license contracts. If price increases, customer service drops, or competition increases, then renewals and revenue will decrease.Financial Risk. Could also be partly operational, strategic, industry, or brandTake internal actions to mitigate the risk. This risk cannot be accepted or transferred. Internal actions include enuring that our pricing reflects market competition and customer expectations, that our products are meeting requirements, that our customer service is providing the highest level support, that we identify clients that are at risk of not renewing and actions are taken.Amazon Risk Ranking (pg. 26)Risk Name (10-K Annual Report, Other)Description of the risk Risk Profile (Pg. 28)Mitigation Plan (Pg 30)WalmartRisk Ranking (pg. 26)Risk Name (10-K Annual Report, Other)Description of the risk Risk Profile
  • 19. (Pg. 28)Mitigation Plan (Pg 30) &"Calibri Bold,Bold"&14&K000000&A &"Calibri,Regular"&K000000&D &"Calibri,Regular"&K000000&F &"Calibri,Regular"&K000000&P Instructions 1. The purpose of this template is to gather data that will be analyzed and discussed in the Assignment Part B submission. Insert the name of the company in the "Company 1 or Company 2" headings so we know which company is being reviewed. 2. The template uses the terminology in the CFO Guidebook chapter on Risks. 3. Risks of the company are disclosed in the annual 10-K report section Item 1A Risk Factors. Use the risks in the 10-K as your basis for your template. You can also get additional risks from the Morningstar Analyst Report, or from news articles about the company. Try to narrow down the laundry list of risks to a few unique (only applies to one company but not the other) and major risks. 4. There is no "magic" number of risks to be included in your template. Try to aim for 3-5 risks per company to compare and analyze. Pick the risks. 5. You can delete extra rows, or add rows. You can also change the font size and the column widths. Keep the headings standard. While not a requirement, if you believe an additional column is required to better describe/classify your risks, then add it. 6. While not a requirement, you can copy/paste the Excel completed table as a picture to your Word document if it makes it easier to reference in your analysis and recommendations. Assignment 2COMPANY 1 NAME HERECOMPANY 2 NAME HEREMorningstar Analyst Report2017201820172018ValuationPrice/SalesPrice/EarningsPr
  • 20. ice/BookEarnings Yield %GrowthRevenue %Operating income %Net Income %Financial HealthQuick Ratiointerest CoverageDebt/EquityProfitabilityROAROEROICNet margin % &"Calibri Bold,Bold"&14&K000000&A &"Calibri,Regular"&K000000&D &"Calibri,Regular"&K000000&F &"Calibri,Regular"&K000000&P Instructions 1. The purpose of this template is to gather data that will be analyzed and discussed in the Assignment Part B submission. Insert the name of the company in the "Company 1 or Company 2" headings so we know which company is being reviewed. 2. The template uses the ratio terminology in the CFO Guidebook. We have also provided you with a Course Ratio Checklist you can use to understand what the ratios mean and how they are calculated. Please use Current Year ratios as the base ratios. For example, the most recent full year. 3. Ratios for the companies are included in the Morningstar analyst report provided in the course. Some ratios are also provided in the 10-K Annual Report, from online sources, or can be calculated - but for this exercise you can use the Morningstar analyst report as you primary source. 4. Do not delete ratios from the table. There is no requirement to add extra ratios, unless your believe there are othe ratios that best helps you describe the performance impacting the valuation of the companies. More is not necessarily better - we are looking for quality over quantity. 5. The ratios in this execrcise are based on historical performance. When comparing the ratios of the two companies side-by-side, you will notice differences. One company may seem to have performed better - we are looking for your insight for that difference in performance. 6. You can also change the font size and the column widths. Keep the headings standard. While not a requirement, if you
  • 21. believe an additional column is required to better describe/classify your risks, then add it. 7. While not a requirement, you can copy/paste the Excel completed table as a picture in your Word document if it makes it easier to reference in your analysis and recommendations. Assignment 3COMPANY 1 NAME HERECOMPANY 2 NAME HEREMorningstar Analyst Report Data20172018Forecast (optional)20172018Forecast (optional)Income StatementRevenue (Bil)Operating Income (Bil)Net Income (Bil)Operating PerformanceGross Margin %Operating Margin %Net Margin %Days Sales OutstandingDays InventoryDays PayablesReceivables TurnoverInventory TurnoverFixed Asset TurnoverTotal Asset Turnover &"Calibri Bold,Bold"&14&K000000&A &"Calibri,Regular"&K000000&D &"Calibri,Regular"&K000000&F &"Calibri,Regular"&K000000&P Instructions 1. The purpose of this template is to gather data that will be analyzed and discussed in the Assignment Part B submission. Insert the name of the company in the "Company 1 or Company 2" headings so we know which company is being reviewed. 2. You will be reviewing the financial data from various years looking for trends. 3. The template uses the ratio terminology in the CFO Guidebook. We have also provided you with a Course Ratio Checklist you can use to understand what the ratios mean and how they are calculated. 4. Ratios for the companies are included in the Morningstar analyst report provided in the course. Some ratios are also provided in the 10-K Annual Report, from online sources, or can be calculated - but for this exercise you can use the Morningstar analyst report as you primary source. 5. Do not delete ratios from the table. There is no requirement
  • 22. to add extra ratios, unless your believe there are othe ratios that best helps you describe the performance impacting the forecast of the companies. More is not necessarily better - we are looking for quality over quantity. 6. When comparing the forecasts of the two companies side-by- side, you will notice differences. One company may seem to have better trends - we are looking for your insight of the difference in performance. 7. You can also change the font size and the column width. Keep the headings standard. 8. While not a requirement, you can copy/paste the Excel completed table as a picture in your Word document if it makes it easier to reference in your analysis and recommendations.