SHAREHOLDER VALUE 1. What is the goal of financial management for business organizations? Would this diminish the organization’s willingness to meet social objectives and obligations? Themain purpose of the business organization is to maximize the profit. Thefinancial management is the branch which deals with the money or fundmanagement of the organization properly so that the goal or the profit can beachieved with minimal resource and effort utilization. The account shows themoney in terms of number but the role of finance manager is to allocate moneyaccording to theme of business organization.
Socialobjectives and obligation are the roles that need to be performed according to therules of the locality where organization is operating. Every businessorganization nowadays has corporate social responsibility and they invest someamount of money for this purpose. Financial management actually do not diminishthe organization’s willingness to meet social objectives and obligationsinstead it can play a unique role so that both can go parallel withoutcolliding each other values. NON-PROFIT ORGANIZATIONS 2. Identify a non-profit organization and state their mission statement.
What kind of financial management goals would be appropriate, and how would you measure success in fulfilling those goals? Oneof the not for profit organization operating in Canada is University ofManitoba, and the mission is “To create, preserve, communicate and applyknowledge, contributing to the cultural, social and economic well-being of thepeople of Manitoba, Canada and the world.”Unlikefor profitable organization increasing shareholder interest, financialmanagement for the nonprofit organization goal is to maximize the profit forthe society and stakeholder interest and provide socially desirable needs. Theyneed to utilize the money given to the organization by the donor and satisfythem by investing that money on social interest. 3.
Identify a publicly traded for-profit company approved by the instructor. Describethe business using a maximum of four sentences.Rogers Communications Inc. isa leading telecommunication company operating in Canada and provide theservices like telephony, high speed internet, cable television for bothbusiness and individuals. Shares for Rogers are traded in Toronto StockExchange (TSX: RCI.A and RCI.B) and on the New York Stock Exchange (NYSE: RCI). FINANCIALSTATEMENT ANALYSIS 4.
Using our lecture discussions and the textbookTable 4.5 as a guide, select and prepare five (5) financial ratio calculationsto analyze the performance of your chosen company. Explain your findings usinga maximum of five (5) sentences to clearly convey your assessment of theirfinancial performance.Thedocument used for the ratio analysis in available in this online link stored inhttp://netstorage-ion.rogers.com/downloads/IR/pdf/annual-reports/Rogers-2016-Annual-Report.
pdf 1.Working Capital Ratio Thisratio measures the health of the organization and indicates how much anorganization is capable of meeting its liabilities or financial obligations..The workingcapital ratio is calculated by dividing currentassets by currentliabilities.WorkingCapital Ratio = = 0.5026 Thevalue 0.
5026 indicates that there could be potential liquidity problems as theratio of 1.5 to 2 is considered as the solid financial condition. 2.Quick RatioAlsoknown as the acidtest, this ratio subtracts inventories from current assets,before dividing that figure into liabilities. It shows how well currentliabilities are covered by cash and by items with a ready cash value.Inventory, on the other hand, takes time to sell and convert into liquidassets, that is why we subtract them for the quick ratio.
QuickRatio= = = 0.4410Highervalue of quick ratio means the company is in better liquid cash position andnot relying on sales of its inventory or other assets to pay its short termliabilities. Here, the number 0.4410 is below 1 so that Rogers communication needto sales its inventory quickly. 3.Return on equity (ROE) This ratio reveals how much profitdoes organization made using the investment of the shareholder’s money.
This is also known as return on networth(RONW). ROE= = = 0.1584Thehigher the value of ROE is preferred.4.
Return on Assets ROA (Du Point Ratio) This ratio tells how an organization is using itsassets efficiently. ROA = = % = 2.94% Thecompany is generating its 2.94% of asset to generate profit.
5.Debt-Equity Ratio The debt-to-equity iscalculated by dividing total liabilities by the shareholders’equity and this is a leverage ratio that tells what amount ofdebt and equity is being used to finance the company’s assets. Debt-Equity Ratio = = %= 437.9%Thisindicates that Rogers is adopting aggressive growth and with increasing profitthere are greater chances of loss for investors. SWOTAND BUSINESS PLANNING5. Conduct a SWOT analysis of the companyto help guide management on preparing the business plan financial statements. Strengths Weakness 1. Canada’s largest wireless provider 2.
One of the top companies operating in media and mass communication field 3. Initiator and introducer of latest technologies 1. Do not have multinational operation 2. Dependent upon Canadian clients only Opportunities Threats 1. Can grow telecommunication sales and increase market in all regions 2. Launch new and latest internet and GSM updated technology 1.
Very high fluctuation in technology and dynamic characters 2. Highly competitive market and strong competitors EXTERNALSUPPORT6. Identify an external source of supportfor your SWOT analysis above as discussed in class.ForSecond Class: Gartner reportNameof leader and find the Gartner report ForresterResearch for finance FORECASTED INCOME STATEMENT (p.
58(Income Statement))7. Prepare an incomestatement for the fiscal year following the latest income statements availableonline which reflects the outcome of your financial statement analysis, andsupported SWOT work above. Include a reproduction of the latest incomestatement from the company that you used as a basis of your new fiscal yearforecast. Rogers Communication Projected Income Statement For the year ending December 31, 2019 (In millions of dollars, except per share amounts) Full Year(2019) Revenue Wireless 8124 Cable 3533 Business Solutions 388 Media 2241 Corporate Items and Intercompany Eliminators 200 Total revenue 14486 Adjusted operating profit(loss) Wireless 3312 Cable 1712 Business Solutions 120 Media 152 Corporate Items and Intercompany Eliminators 155 Adjusted operating profit 5451 Deduct(add) Stock based compensation 65 Depreciation and amortization 2280 Impairment of assets and related onerous contract charges 480 Restructuring, acquition and other 175 Finance costs 780 Other expense(income) 180 Net income(loss) before income tax expense(recovery) Income tax expense(recovery) Net income(loss) Earnings per share Basic Diluted Net Income Add Stock based compensation Gain on acquition of mobility Loss on non-controlling interest purchase obligations Loss on repayment of long term debt Loss on wind down of shomi Net loss on divestitures pertaining to investments Impairment of assets and related onerous contract charges Income tax impact of above items Income tax adjustment, legislative tax change Adjusted net income Basic Diluted Additions to property, plant and equipment Cash provided by operating activities Free cash flow Total service revenue APPENDIX