If you were a CFO with no business ethics and wanted to manage earnings up to beat a quarterly estimate, what are two ways you could do that. Explain why an unscrupulous manager would choose to use your two methods. What are the journal entries involved in your earnings management or manipulations?

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Zoom Financial

Problem 1. Business Strategy Analysis

(i) Briefly summarize Zoom’s strategy for driving new customer acquisitions. [4 points]

(ii) List one key success factor and one significant risk associated with Zoom’s strategy for driving new customer acquisitions. [6 points]
1. Key success factor
2. Significant risk

Problem 2. Accounting Analysis
(i) Summarize how Zoom recognizes revenue associated with subscription agreements. [3 points]

(ii) Assume that instead of using its current accounting policies for subscription revenue, Zoom instead recognized revenue when it has the right to invoice under a subscription agreement. Estimate the Revenue that Zoom would have reported for the fiscal year ended January 31, 2021. [6 points]

(iii) Summarize how Zoom accounts for ‘sales and marketing’ costs. [3 points]

(iv) Assume that instead of using its current accounting policy for ‘sales and marketing’ costs, Zoom instead took the portion these costs that are expensed as incurred and capitalized these costs in the fiscal year incurred and then amortized these costs on a straight-line basis over the subsequent two fiscal years. Estimate the Income from operations that Zoom would have reported for fiscal year ended January 31, 2021. [6 points]

(v) If you were a CFO with no business ethics and wanted to manage earnings up to beat a quarterly estimate, what are two ways you could do that. Explain why an unscrupulous manager would choose to use your two methods. What are the journal entries involved in your earnings management or manipulations? [6 points]

(vi) Which of the above two accounting methods for sales and marketing costs do you think better reflects their underlying economics? Briefly explain your answer. [3 points]

Problem 3. Financial Analysis
(i) Estimate the average number of days that elapses between the right to invoice customers and the recognition of the associated revenue for sales by Zoom and RingCentral in their most recent fiscal year. [8 points]
Average Number of Days for Zoom =
Average Number of Days for RingCentral =

(ii) On average, does Zoom receive cash from its customers before or after it recognizes the associated revenue? Briefly explain your answer. [3 points]

(iii) Compute the gross margin ratios for Zoom and RingCentral in their most recent fiscal years. [4 points]
Gross margin Ratio for Zoom =
Gross margin Ratio for RingCentral =

(iv) Provide one likely explanation for the difference between the two ratios that you computed above. [4 points]

(v) For the past three years, Zoom has consistently reported cash from operating activities that is over twice as large as net income. List two of the primary reasons for this difference. [6 points]

Apply the theories, models, and practices of finance to the financial management of an organization. Analyze financing strategies to maximize stakeholder value. Apply financial analyses to business planning and decision making. Use data to support evidence-based financial decisions.

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Assessment 3: Financial Engineering to Enhance Shareholder Value

An 8-10 slide presentation to your staff describing your analysis, linking what tools you utilized and why you chose those tools. You will use data to support your evidence-base financial decisions. You will also explain your recommendations to maximize stakeholder value, translating those to tactical outcomes to be implemented by your staff.

Introduction

This assessment builds on your prior work in Assessments 1 and 2. It is a presentation to your staff describing you analysis, linking what tools you utilized and why you chose those tools. You will use data to support your evidence-base financial decisions. You will also explain your recommendations to maximize stakeholder value, translating those to tactical outcomes to be implemented by your staff.

  • Apply the theories, models, and practices of finance to the financial management of an organization.
  • Analyze financing strategies to maximize stakeholder value.
  • Apply financial analyses to business planning and decision making.
  • Use data to support evidence-based financial decisions.

Scenario

The senior leadership has approved your recommendations to move forward. You are now tasked with operationalizing your recommendations. Meeting with your staff, you will translate recommendations to strategies and corresponding tactical objectives. You will explain how you used financial analysis to develop these recommendations, discussing the financial tools you will use to monitor implementation progress.

Your Role

You are one of the high-performing financial analyst managers at ABC Healthcare Corporation and are under consideration for a promotion to Director of Operations.

Requirements

Follow these steps to complete this presentation:

  • You are presenting to your staff a summary of the reports presented to senior leadership (Assessments 1 and 2).
  • Start by presenting the overall current financial condition of the company as presented to senior leadership (one to two slides).
  • Provide an overview of your analysis, linking what tools (financial statements, ratios, industry trends, capital structure) you utilized and why you chose these tools (two slides).
  • Link the data used to support your evidence-based financial decisions, providing justification for the recommendations (two slides).
  • State the recommendations focused on maximizing stakeholder value into strategies newly adopted by the company, i.e., expansion to a new geographical market, the development of a new dividend policy, changes in capital expenditures, reduction of workforce (one slide).
  • Translate those strategies to tactical objectives to be implemented by your staff, noting evidenced-based academic citations (one to two slides).
  • Discuss what financial tools you will use to monitor the progress of these tactics (one slide).

Deliverable Format

  • Be sure to use a bullet format in your slides but also include detailed narrative supported by relevant literature citations in the notes section.
  • Ensure written communication is free of errors that detract from the overall message and quality.
  • Use at least three scholarly resources.
  • Length: Minimum 8 content slides in addition to title and reference slides.
  • Use 12 point, Times New Roman.

Briefly describe the investor who inspired the screener that you choose and discuss their investment philosophy. Explain each of the criteria and critically evaluate the purpose and rationale behind the setting.

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Quantitative Investment Strategy and Bloomberg backtesting

• A Warren Buffett screen

Answer the following questions:

A. Briefly describe the investor who inspired the screener that you choose and discuss their investment philosophy (do not simply copy and paste the short description from FT.com; maximum 300 words) (3 marks).

B. Explain each of the criteria and critically evaluate the purpose and rationale behind the setting. (5 marks)

C. Apply the screener to the United State market on Bloomberg.

a. Show the EQS screening criteria in a screenshot (5 mark)

b. Backtest the strategy with annual rebalance, for the past 15 years relative to last year end, equal-weighted and benchmark against S&P 500. Show the screenshot of the Equity Backtesting: Model Builder with the above set up. (5 mark).

c. Critically evaluate the performance of the portfolio. Should at least include the overview of the performance and the number of securities in the portfolio. (10 marks)

d. Suggest any possible change of criteria that may improve the performance of the screen. (5 marks)

Identifying CFO’s tasks in the selected organization in the context of the traditional and changing role of CFOs. Conduct temporal analysis of the identified CFO functions listed in the task details section in this document for your selected company. Present a ‘short and sweet’ discussion of the current practices of how CFOs conduct these functions to contribute to the firm goal.

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Corporate Finance Report

Note: Read this document thoroughly with care. Do not rush! The document sets out the task description, work expectation, preparation tips, submission guide, and marking scheme for the assignment. The report should be compiled professionally as if a management consultant completes it. The higher your commitment, the better you will learn and gain more transferable knowledge with you in the job market (beyond your grading concern!).

1. TASK OVERVIEW
Lecture 1 introduces the traditional and evolving roles of CFOs in public limited companies – highlighting firms‘ goals and the agency issues in corporate management. Lectures 2 and 3 present the governance and management aspects of capital investment decisions by incorporating risks and real options to ensure positive NPV. Lecture 4–7 introduces the scope of financing opportunities and how to reach a capital structure decision that optimizes firm value, while lecture 10 introduces the dividend decision. Building on the concepts drawn from these lectures, this Corporate Finance Report aims to expand your conceptual understanding, ability to apply and take essential job market transferable knowledge by examining several financial should –

Identifying CFO‘s tasks in the selected organization in the context of the traditional and changing role of CFOs (highlighted in Lecture week 1, Global CFO Research, and 2017 global corporate treasury survey1).
Conduct temporal analysis of the identified CFO functions listed in the task details section in this document for your selected company.
Present a ‘short and sweet’ discussion of the current practices of how CFOs conduct these functions to contribute to the firm goal.
Provide comments and suggestions in each section drawn from your analysis.

2. MAJOR TASK DETAILS:
BACKGROUND TASKS – KNOW YOUR SELECTED COMPANY FIN3CFI is a subject with 200 plus students. Given that leaving the task of selecting companies to students may create interruption with the schedule and unnecessary email back and forth, the subject coordinator has already allocated a company form the list of companies available in ASX. The selected company and the respective students’ details are available in LMS.
1 Available at https://www2.deloitte.com/content/dam/Deloitte/au/Documents/financial–services/deloitte– au–fs–global–corporate–treasury–survey–report–2017–210817.pdf

Changing the assigned company is not allowed. However, for exceptional circumstances where data availability is an issue (debt amount missing, no dividend payment etc), students can request a change of the selected company to the subject coordinator. Note that the email of such request should have an appropriate subject heading with the company’s name from ASX–listed firms. However, the company’s name should not be a company that has already been allocated to other students in the cohort. Either way, the process must be completed by the end of week 5. Students from Sydney and Vietnam campuses will be aided by respective lecturer to finalize the company selection process by the end of week 5. The list of companies are available at SY and VH LMS sites. Before starting the Assignment, you should browse the company’s website to familiarise yourself with the company and check the availability of financial and accounting data, annal reports, and other information in the Data Analysis Premium platform for the respective company.

3. REPORT STRUCTURE:
Each student should gather relevant financial and non–financial sources of information about the selected company and assess its financial management policies and practices.
COVER PAGE
The first page should contain a professionally suitable background image of the company‘s logo/ product/ services and mentions the following:

– Name of consultant (student) and consultant ID (student ID)
– Name of the selected company and its‘ listed exchange(s).
– Release date of the consultant‘s report.
The second page should include the table of content that is hyperlinked (preferably) with various sections of the report to help navigate through the submitted PDF file during the assessment process. The third page should contain the executive summary (Maximum 150 words not counted against the total word count). The executive summary highlights the report’s contexts, findings, and significant inferences from the analysis.

MAIN BODY OF THE REPORT

a. Understating the firm and its industry
This section should provide a brief context to help the reader understand the bigger picture about firm‘s operation and its environmental dynamics. Key points to highlight may include –
– Overview of the market, market shares of key players and your firm, key trends in the past five years.
– A brief overview of the firm and its core businesses (critical products/services, % contribution to revenues) with the comment on the firm‘s business model, e.g., how the firm makes a profit, what are the main sources of revenues and costs, and what it tells about the company‘s future.
– Brief comment on the key strategic/market/financial or other risks through the lens of PEST (Political, Economic, Social, Technological) analyses.

b. Corporate governance
Contents in this section should provide a cohesive understanding of the firm‘s corporate governance practices. You should comment on the potential of the current governance status to resolve agency problems. Key issues to highlight includes –
– Firm’s corporate governance practices with focus on board size, board independence ratio, key committees, independence of key committees, CEO duality (CEO is also chairman of the board), CFO board membership, etc.
– Firm‘s compensation practices for the top management – salary, bonus, option grant, ownership to top management (CEO and CFO) and elucidate its potential to resolve (exacerbate) any agency conflict. Comment on the pay–performance sensitivities of executive (CEO and CFO) compensation design.
– Status of director’s remuneration and audit fee over the years.
– Comment on whether the firm deviates from best corporate governance practices set forth by Australian regulators. Does current practices help the firm in solving agency problem?

c. Capital structure
Contents in this section should provide a cohesive understanding of the firm‘s capital structure and financing choice. Key issues to highlight includes –
– Firm‘s capital structure practices during the past five years.
– Comments on how diversified firms’ long–term financing sources are.
– Whether firms have raised significant additional capital during the period. What are the main sources of such capital, and how evolving are these sources?
– How does the issue of debt (if any) /bank loan affect the firm‘s coverage ratio?

– Whether any link can be established between the firm‘s financing policy and its shareholders’ wealth through higher(lower) EPS, market performance and stock price reaction to the announcement of the new equity or debt issue or raising of significant long–term bank loan.

d. Capital expenditure / investment management
Discussion in this section should provide an overview of the firm‘s investment portfolio strategy and its connection to improved market share and financial performance. Key highlights should include –
– Firm‘s capital investment practices using historical analysis of long–term investments for the past five years.
– If there is any significant investment during the period, including investment in fixed assets, restructuring through merger and acquisition, or divesture.
– How company‘s investments in tangible vs. intangible assets are changing?
– The efficiency of investment – contribution to the cash flow stream, profitability, and market performance and announcement effect (if any) of such investment decision.

e. Distribution decision
Discussion in this section should provide an overview of the firm‘s distribution policy. Key issues to highlight includes –
– Firm‘s dividend decision using historical analysis of dividends, such as dividend payout policy during the past five years.
– Firm‘s dividend practice types – stock dividend and/or cash dividend, frequency – annual vs. interim dividend, etc.
– Comment on the market reaction of dividend announcement using event study, i.e., calculating abnormal return for two dividend announcement events (preferably one increase and one decrease)
– Comment on whether the market reaction is consistent with the nature of the dividend announcement.

If your firms does not pay dividend in past five years, you have two options: (a) you can state the facts and provide reasons justifying non–payment of such dividend (marks will
not be deducted for such cases); (b) you can choose another company and request a change to confirm with subject coordinator or instance lecturer.

CONCLUSION
Concluding notes should provide an overall (maximum 150 words not to be counted against the total word limit) comment on the firm’s financial management practices and value relevance.

Write a short essay of 1,000 words in response to the following question: How can banking and financial regulations impact your daily work life?

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How can banking and financial regulations impact your daily work life?

Write a short essay of 1,000 words in response to the following question: How can banking and financial regulations impact your daily work life?

 

Write a short essay of 1,000 words in response to the following question: Is Basel III enough? Explain each regulation and its main pillars.

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Is Basel III enough?

Write a short essay of 1,000 words in response to the following question: Is Basel III enough?

Your work will be assessed based on the following criteria:

• Understanding why regulation is important (or not) in the financial industry
• Be able to explain each regulation and its main pillars
• Be able to make the link between the 2008 financial crisis and its implications in terms of regulation
• Be able to understand how regulations affect the daily work of an employee in a financial institution
• Your ability to use different bibliographic resources
• Your ability to synthesise key ideas around a given problem
• Your ability to step back from a given situation
• Your ability to explain concepts

Write a 1,500-word report that addresses all the following points and explains the measures your chosen bank is taking to comply with banking regulations.

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HSBC Bank Analysis – Risk and Regulation

Find the annual report for HSBC Bank (HSBC Holdings plc) containing all the information on their risk management. You are then required to write a 1,500-word report (+/- 10%) that addresses all the following points and explains the measures your chosen bank is taking to comply with banking regulations:

• A presentation of the bank and its key characteristics.
o Supervision and Regulations
o Liquidity and risk management
• Systemic risk
• Basel III
• MIFID II

Your work will be assessed based on the following criteria:
• Be able to use systemic risk instruments
• Be able to understand simple regulation tools
• Your ability to synthesise complex information in a clear and concise manner
• Your ability to contextualise the information provided

In one paragraph for each goal – outline how you plan on achieving each goals. What actions will you take to help the goal come true? What did you enjoy about this ACE240 class? What would you do differently? Would you/have you recommended this class to a colleague or friend? If not – what changes might help?

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Personal financial plan

Write yourself a personal financial plan. Use everything we’ve covered in class (lectures, readings, videos, podcasts, quizzes) to develop the following four part financial plan. State your financial planning goals. Include two more goals you would like to achieve for each of the following time frames: Short term (less than 6 months), Intermediate term (6-60 months) and long term (>60 month). Each part of the financial plan is worth up to three points (for a total of 12 points on this project).

2) In one paragraph for each goal – outline how you plan on achieving each goals. What actions will you take to help the goal come true?

3) For any quantitative goals (any goal that requires a calculation; such as paying off a student loan, saving up for a house or retirement) show how much you will need to save annually or monthly to meet the goal.

4) What did you enjoy about this ACE240 class? What would you do differently? Would you/have you recommended this class to a colleague or friend? If not – what changes might help?

 

After reading Mining for Goals and attending this section’s live/online lecture or listening to the archive share your personal goals using the Moodle text editor tool. Talk about your personal, academic or financial goals.

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Mining for Goals

After reading Mining for Goals and attending this section’s live/online lecture or listening to the archive share your personal goals using the Moodle text editor tool. Talk about
your personal, academic or financial goals for the following three areas of life:
1) While in College
2) Five years after graduating
3) Ten years after graduating or longer

For full credit consider your financial situation from the first few sections of class. Think about goals from the standpoint of saving, purchasing a home, becoming financially solvent, finding a job or career in the field of your choice. The more you can break your goal down into smaller steps, or specific actions you need to take to succeed and meet your goal, the better your answer will be. For full credit please provide at least two goals for While in College, Five years after Graduating and Longer term goals. Your answers should be complete sentences and written in the moodle text editor. There is not a required word count on this project.

Estimate all of the proposed and compare their Akaike Information Criteria to identify the most suitable model for the assigned inflation rate.  Is Fama-French a good model for the particular stock? Explain your answer with evidence from your computation. 

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Econometrics report

Requirements:
You must use Eviews software to complete this assignment. You need to submit both the Eviews file and the written report. The report needs to be typed and presentable. The report must address each of the tasks below. Do not restate the questions in your report. Your report has to be understandable as a stand-alone piece of work without referring to the Eviews file. You can include the graphs/ tables/ estimation results from Eviews to address the questions, but do not details the process of how you create them. The process will be visible in the Eviews file. You should reflect on the outcomes of the research and tests conducted and not on the operational actions.

In the Eview files, you need to save all the variables created, all the graphs, estimation outputs and hypothesis test results, with their names clearly identify the questions they address.

Tables, graphs, figures, estimation outputs, etc. need to be clearly labelled.

If you do not submit the Eviews file, you will automatically lose 50% mark of all calculation tasks. Calculation tasks that are not visible in Eviews will also lose 50% mark automatically.

Tasks:
Download the Excel files. Each of you will have a different set of data. Sheet 1 contains the monthly inflation rates of eleven countries. Sheet 2 the monthly historical price of S&P500 and other indices. Sheet 3 contains daily stock prices of eleven US companies, SMB and HML risk factor and US risk free rate. Note: all the Fama-French data are in percentages. Sheet 4 contains USD/GBP spot and forward exchange rates. All data are obtained from Eikon Refinitiv and Kenneth French’s website, which can be access here:

Each of you will be assigned one company, one index and the number of lags for VAR in question 5.

1. Employ the Box-Jenkins approach, identify the ARMA form of the assigned inflation rates following the steps below:

a. Plot the correlogram of the time series.   (2 marks)

b. From the correlogram, propose three models AR, MA or ARMA that could potentially be suitable for this time series. Provide justification for the choices.   (10 marks)

c. Estimate all of the proposed and compare their Akaike Information Criteria to identify the most suitable model for the assigned inflation rate.   (15 marks)

2. a. Apply the Fama-French 3-factor model on the log return your assigned US company. The Fama-French 3-factor model has the following form:
b. models (10 marks)

Report your estimation results and comment on the significance levels of the estimated coefficients. Comment on the meaning and significance of all the factors.

c. Is Fama-French a good model for the particular stock? Explain your answer with evidence from your computation.  (5 marks)

3. Conduct the ARCH-LM test on the residuals of the estimation of model (1) in question 2. Report and comment on the result of the test.  (5 marks)

4.a. Estimate the Fama-French 3-factor model with GARCH(1,1) on the company stock return. Comment on the estimated result regarding the magnitude and significance of the model.   (10 marks)

b. Discuss if introducing GARCH(1,1) for this model is appropriate.   (5 marks)

5. Apply a bivariate VAR model to the monthly log return on S&P500 and the monthly log return on your given index.

a. Report the optimal lag-length table. What are the optimal lag lengths according to different criteria?  (3 marks)

Index: NIKKEI225

Company: Amazon

Var lag: 4

Inflation rate: Japan