evaluate the strengths and weaknesses of a company through financial analysis.

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For this part of the course project, you will demonstrate your
ability to evaluate the strengths and weaknesses of a company through
financial analysis.

This is a three-part assignment. To complete this assignment, do the following:

Part 1: Cash Flow Analysis

Your client, Jennifer Logan, is a relatively inexperienced investor
and is trying to make a decision whether to sell her investment in ABC
Company or continue to hold her equity position in it. Ms. Logan has
asked you to analyze to analyze ABC’s cash flow statement and provide a
recommendation. Using ABC Company’s Statement of Cash Flows, write an
analysis and recommendation for Ms. Logan.

  1. Download and read ABC Company’s Statement of Cash Flows. (attached below)
  2. Write a 3-4 page document for Ms. Logan that includes the following information:
    1. Define and explain balance sheet, income statement, and statement of cash flows.
    2. Describe how the statement of cash flows relates to the income statement and balance sheet.
    3. Explain why the analysis of a statement of cash flows is important to investors.
    4. Analyze and judge the cash flow from operating activities at
      ABC Company. Is ABC effective at utilizing funds within the company?
    5. Analyze and explain the significance of each item from the investing section of the statement.
    6. Analyze the cash flow from the financing section of the
      statement and describe why the dividends section is important to your
      client.
    7. Summarize your analysis and give your opinion on how effective
      ABC Company is at managing its cash flow, from an investor’s
      perspective. Also explain whether you think ABC Company has enough cash
      on hand to sustain it in the long term.
    8. Recommend whether Ms. Logan should hold or sell her investment in ABC Company.
  3. Adhere to professional formal and stylistic principles, and be sure to cite sources when necessary.

Part 2: Executive Summary

Write a 2-3 page executive summary of how the Federal Reserve’s
monetary policies may affect economic growth, both from a corporate and a
personal finance perspective. In order to ensure that your response is
complete, please be sure to include commentary on the following
concepts:

  • The banking industry
  • TVM
  • Personal and corporate saving rates
  • Equity financing vs. debt financing
  • Financial analysis

PART 3: discussion $150+words

From an external investor’s perspective, which is most important for
determining a firm’s overall financial health: the firm’s income
statement, balance sheet, or cash flow statement? Justify with three
reasons. Would your answer differ if you were an internal manager of the
firm? Explain.

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