Evaluate the roles of projected financial statements within the financial planning and decision-making processes. Incorporate risk into the financial planning process and assess the effectiveness of approaches to incorporating risk.

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Financial management essentials: Online Quizz

The nature, purpose and significance of financial planning
Projected income statement, cash-flow statement, statement of financial position
Forecasting sales
Financial gearing (leverage)
Operating gearing (leverage)
Combined financial and operating gearing (leverage).

Critique business plans and evaluate their quality (MLO1)
Evaluate the roles of projected financial statements within the financial planning and decision-making processes. (MLO1)
Incorporate risk into the financial planning process and assess the effectiveness of approaches to incorporating risk. (MLO1)
Evaluate and explain the effect of financial and operating gearing on the risks and returns reflected within the financial planning of a business. (MLO1, MLO4)

In what ways do you believe the trade-off of Risk-Return might influence the organization and individual investment decisions?

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Financial Risks

If managers could have just one wish, many would ask for a crystal ball. With this tool, there would never be any worry about risk. The manager could look into the crystal ball and know exactly what will happen with each decision. Unfortunately, we do not have this luxury and must use other tools and techniques to determine the risks we face for the decisions we make. Understanding the types of financial risks will be the focus of this week’s discussion question.

In what ways do you believe the trade-off of Risk-Return might influence the organization and individual investment decisions?

Identify the potential business risks that apply to the projects being considered by the New Heritage Doll Company, Quantify the financial impacts of the risk (i.e., price the risk), and select appropriate methods for mitigating those risks.

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Risk Assessment FIN-630

Overview:

In this third milestone assignment for the final project, you will continue your analysis of the New Heritage Doll Company. Assuming the role of Emily Harris, the firm’s financial analyst, your next step in the process is to perform a risk assessment of the two capital budgeting projects being considered. As we are learning, risk can be identified and quantified, and this is a crucial step in the evaluation of any capital investment project. For this project involving the New Heritage Doll Company, we will focus on the relevant internal (business) risks that may be present. These risks include marketing, distribution, or technical issues that may compromise the two projects’ success. For the purpose of weighing each project’s merit, how might these risks be measured and mitigated?

Prompt:

To complete this third part of the final project, you will continue your analysis by conducting a risk assessment. Specifically, you will:
 Identify the potential business risks that apply to the projects being considered by the New Heritage Doll Company,
 Quantify the financial impacts of the risk (i.e., price the risk), and
 Select appropriate methods for mitigating those risks.

To do this, locate the relevant numbers from the case study and perform profitability index calculations. A profitability index can be used as an arbiter when capital constraint effectively makes two projects mutually exclusive. In this instance, the NPVs of the two projects are nearly the same, but one project creates more NPV per dollar of the capital budget expended. It is also an index maximizing choice. Document your results in the “Milestone Three” section of each specific project tab on the spreadsheet template you used for the previous two milestones. The module resources may also be useful. Provide a written analysis of the risks associated with each project. For example, what if the computer system malfunctions? What would be the cost to fix it? What would be the cost of an upgrade? Each identified potential risk should be discussed in your analysis and priced and referenced, by item, on your spreadsheet. Cite specific evidence from the case study and employ at least two scholarly articles to support your claims.

Note that the course textbook will also be useful as you progress through this project. As finance students and professionals, you are also encouraged to use your own experience, understanding, and knowledge of business and industry structure to drive your analysis. Specifically, the following critical elements must be addressed:

V. Risk Assessment
A. Identify the risks to your firm for each of the projects. For example, you should consider possibilities such as cannibalization of current products, new software, issues with development, customer impact, and so on.
B. Next, quantify the identified risks in terms of their potential financial impacts (i.e., price the risks). Justify your estimations and values with specific evidence.
C. For each of the identified risks, select appropriate methods for mitigating those risks. Illustrate your recommended strategies with specific examples

What funds do you have available to invest? Are you willing to borrow in order to increase the size of your investment? How much time do you have to manage your investment? What is your level of expertise? Will you be working with partners that have similar objectives and constraints?

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Identifying and analyzing a real estate investment opportunity

1.Determine your objectives and constraints

1a.It is important to know your investment goals:

  • Are your willing to risk losing your investment for the possibility of a high return?
  • Do you prefer more modest returns but a safer investment?
  • Are you willing to put in “sweat equity” or do you want a turn-key investment?
  • What is the duration of your investment? (Long-term vs short-term)
  • Are you looking for a steady cash flow or is the growth of the value of your investment more important?

1b.It is equally important to know your constraints:

  • What funds do you have available to invest?
  • Are you willing to borrow in order to increase the size of your investment?
  • How much time do you have to manage your investment?
  • What is your level of expertise?
  • Will you be working with partners that have similar objectives and constraints?

2.Analyze the Investment and Market Environment

  • A thorough analysis of the investment environment is required for any investment decisions, including real estate. This would include an analysis of:
  • The market environment
  • The legal environment
  • The financing environment
  • The tax environment

3.Develop a Financial Analysis

  • The financial analysis deals with determining the expected cash flows of your real estate investment. At the end of the analysis you will be able to answer questions such as:
  • How much will I invest?
  • Determining a fair price
  • How much cash will be generated annually?
  • Rents
  • Expenses
  • How much are the mortgage payments?
  • How much is the profit when I sell?
  • Anticipated value
  • Selling expenses

4.Apply Decision-Making Criteria

  • Determine the required rate of return given the risks and rewards as analyzed in the previous steps.
  • Calculate the Net Present Value (NPV) and Internal Rate of Return (IRR) of the real estate investment and compare them to these hurdle rates.

5.Investment Decision

  • The previous steps give you the necessary information to make your investment decision
  • The analysis process is repeated for various REIs in order to find one that meets the investors’ goals and constraints

List and explain the three pros and three cons of owning. List and explain three pros and three cons of leasing. Using a context from within your own organization as an example, justify why you think your organization should engage in leasing or owning specific equipment.

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Discussion

For our second discussion question, we will explore the question of should you lease or own equipment? Some organizations never lease. Some never purchase if they can lease. You get to decide which you would rather do. Yes, many do both and you can as well.
List and explain the three pros and three cons of owning.
Likewise, list and explain three pros and three cons of leasing.
Using a context from within your own organization as an example, justify why you think your organization should engage in leasing or owning specific equipment.

When should a manager use which one? What insights can these documents provide? What should a manager be cautious about?

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Discussion

For this week’s discussion question, we will differentiate between variance analysis and sensitivity analysis.
When should a manager use which one?
What insights can these documents provide?
What should a manager be cautious about?

Describe your involvement in creating a capital expenditure. What steps were involved and what was the outcome? If you have not been involved with proposing a capital expenditure, how might you prepare for submitting your request?

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Discussion 5

Describe your involvement in creating a capital expenditure.
What steps were involved and what was the outcome?
If you have not been involved with proposing a capital expenditure, how might you prepare for submitting your request?
What key elements would you include in your proposal?
How would you make your case?

Identify a real or hypothetical healthcare organization that you will either create a brand new strategic business plan, or revise an existing business plan. Provide a clear description of the business in your presentation.

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Strategic Business Plan PowerPoint

For this assignment, you will focus on pulling various elements of a strategic business plan together in a cohesive PowerPoint presentation that you may hypothetically present to executives in a healthcare organization. Identify a real or hypothetical healthcare organization that you will either create a brand new strategic business plan, or revise an existing business plan. Provide a clear description of the business in your presentation.

Exhibit 25-9 in your reading (pg. 314) provides a good outline for what needs to be included in the strategic business plan. Although your focus will be on the financial plan, you’ll also be pulling information from past coursework related to organization structure and marketing. You may select to present your budgets from week 5 to contribute to your plan.

Prepare both budgets and provide an explanation and summary of the various elements of the budgets. For example, is your operating budget static or flexible? Why? Likewise, what information is critical to possess when requesting capital expenditure items?

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Operating/Capital Budget Project

Our assignment for week 5 is to create an operating budget (minus staffing cost) and a capital budget for your area of responsibility. There’s no right or wrong way to prepare these budgets, but as a healthcare manager, how are you going to convey the budgets to your supervisors or CFO?
Prepare both budgets and provide an explanation and summary of the various elements of the budgets. For example, is your operating budget static or flexible? Why? Likewise, what information is critical to possess when requesting capital expenditure items?
Assume a reduction (for example, 15%) will be required after you submit your hypothetical budgets to your supervisor(s). Which lines of your budget would you reduce to meet the requirement or how would you defend their necessity?
Complete both budgets and provide an explanation and summary as to how you arrived at your figures as well as how you would present this information to your supervisor or CFO.
Format this assignment in MS Word for the narrative and include appropriate tables for numerical data.
APA format is required. Minimum of 2 academic and/or professional references.

In what instances are each of them more important in conveying financial information? To what audiences are they targeted? How do each of the four reports fit together to contribute to a complete picture of the financial state of the organization?

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Financial statements

Try explaining and providing examples of the 4 basic financial statements.
Compare and contrast these statements for their general purpose and use.
In what instances are each of them more important in conveying financial information?
To what audiences are they targeted?
How do each of the four reports fit together to contribute to a complete picture of the financial state of the organization?