Finance

3.2 Management and Financial Feedback: Discussion Overview In Project 2 you researched financial and management information for your venture. Establishing a solid financial plan and a strong management structure is critical to the success of any new venture. Finances are arguably the most complex and challenging part of starting a business or developing a new concept for an existing company. In this discussion, you will explain your financing and management ideas for your venture. Your classmates will offer feedback on your ideas and suggest ways that you can improve your plans for your business. In turn, you will provide your classmates with feedback on their business plans.   Initial Post Refer to the articles from the previous Read & View assignment: 10 Financial Tips for Startup Entrepreneurs, Eric Bell, Under30CEO.com, n.d. Managing People Is an Art: 32 Ways to Do it, Catherine Clifford, Entrepreneur.com, May 29, 2014, Discuss each of the following: How do you propose to structure the management team for your venture?  Discuss the priorities of your top executives in the first 90 days and in the first year. Identify your sources of funding. Explain how your venture will make money. What is the expected pricing, and how many sales are needed each month to cover expenses? What is the profit forecast, when is the break-even point, and how will you ensure cash flow to continue monthly operations prior to achieving profitability? Does your venture have multiple revenue streams? What are they? Summarize the venture’s fixed and variable expenses.

 There has been a lot in the news lately when it comes to the health care system here in the United States. The system has grown exponentially over the past decade. In 2006, “health care expenditures reached $2.2 trillion, which translates to $7,421 per person or 16.2 percent of the nation’s Gross Domestic Product. The health-spending share of GDP reached 16.2 percent, up from 16.0 percent in 2006” (Centers for Medicare & Medicaid Services, 2009, para. 1). With these figures alone, you can understand the urgency behind containing cost, making accessible, and ensuring quality is important in health care. Making this also more beneficial for vulnerable populations. Are the difficulties inherent in the present U.S. health system caused by private insurance companies or by too much government involvement? Explain your answer  For more information on Private Insurance read this:https://en.wikipedia.org/wiki/Insurance

WEEK 6 Paper. Use the link at the top of this section to submit your paper. Click “Browse My Computer” and attach your paper as a MS Word document. Then click “Submit.” Research and Analysis Paper 3:  As a new junior analyst for your firm, your first assignment is to research, analyze, and value Johnson & Johnson stock (NYSE listed).  Your boss recommends determining prices based on both the discounted cash flow method and comparable P/E ratio method.  You are concerned about your boss’s recommendation because your Corporate Finance professor explained that these two valuation methods can result in widely differing estimates when using real data. You are hoping the two methods will reach similar prices. Good luck with that! Your assignment is: Find and download the Johnson & Johnson 2019 Annual Report including Form      10-K for the fiscal year ending December 29, 2019. Go to      Reuters (http://www.reuters.com) and enter the symbol for Johnson & Johnson (JNJ) in the search box at the top of the web page (select Johnson & Johnson JNJ).  From the      Reuters, the website collects the following information (you should be able to find this in the free sections) and enter it into an Excel spreadsheet: The current stock price (last trade – upper left of page) The       EPS (TTM) The number of shares outstanding The       Industry PE Ratio (TTM) – you may need to look elsewhere for this. From the Key Metrics, tab scroll down to find the Revenue Growth Rate (5Y),      enter the number in your spreadsheet. Go to      Morningstar (http://www.morningstar.com)      and enter “JNJ” into the “Search Quotes and Site” box. Select Johnson      & Johnson under the U.S. Securities section.  Under      “Financials” click Income Statement.  Copy and paste (or use “Export to Excel to create anew file) the most recent three years      (2017-2019) of income statements into a new worksheet in your existing      Excel file.  Repeat this for the balance sheets and the cash flow statements for Johnson & Johnson.  Keep (or copy) all the different financial statement data in the same Excel worksheet NOTE: Make sure you are collecting the Annual data, NOT the Quarterly data. To determine the stock value using the discounted cash flow method: Forecast the free cash flows.  Start by using the historical data from the financial statements downloaded from Morningstar to compute the three-year average of the following ratios: EBIT/Sales Tax        Rate (income tax expense/income before sales) Property,        plant & equipment/Sales Depreciation/property,        plant & equipment Networking capital/sales Create an empty timeline for the next five years Forecast future sales based on the most recent year’s total revenue growing at the       LT growth rate (5Y average) from Reuters for the first five years of the forecast. Use the average ratios from step 5. a. above to forecast EBIT, property plant       & equipment, depreciation, and networking capital for the next five years. Forecast the the free cash flow for the next five years using Eq. 10.2 from the       text (Section 10.1 in text). Determine the horizon enterprise value for year 5 using Eq. 10.6 and a long-term growth rate of 4% and a cost of capital of 11% for JNJ. Determine       the enterprise value of the firm as the present value of the free cash flows. Determine the stock price using Eq. 10.4. Note: your enterprise value is in thousands of dollars and the number of shares outstanding Is in billions. To      calculate an estimate of the JNJ price based on a comparable P/E Ratio,      multiply the industry average P/E ratio by JNJ EPS. Compare the stock values from both methods to the actual stock price.  Submit a two-page double spaced paper summarizing for your boss your analysis and valuation with a few brief summary exhibits explaining how your analysis and outlook are quantified in your valuation model.  Would you recommend investing in the company? Why or why not? For more information on Johnson and Johnson Stock read this: 

 The CFO of your organization pulls you aside in the hallway in a panic and wants to know why no one has called an extermination company yet. They overheard some of your colleagues chatting in the breakroom about “ten wasps.” Explain to the CFO that your colleagues were likely referencing OWASP Top 10 and the significance of the OWASP Top 10. Make sure you have at least one mention of how web security affects the organization financially. For more information on read this: 

Assignment4: Resource Bank of America Annual Report and Quarterly Update Tasks (3 – 5 pages) 1. Identify one (1) enterprise risk management disclosure and one (1) operational risk management disclosure from the Resource. Be specific as to page and section. 2. Describe the disclosure (a) and why you characterized as either enterprise or operatonal risik (b). You should refer to either (i) the text, or (ii) materials provided in class as points of reference. 3.  Choose one (1) of the disclosures you reported on and give you an assessment of its adequacy to the consumers of the report. Justify your assessment with at least one (1) specific argument. Assignment 5: Resource Any business news feed, including but not limited to WSJ, Bloomberg, CNBC.  Tasks 1. Select a story of interest to your colleagues in operational risk management. 2. Write a script for a “podcast” based on the story. This podcast would last 3-5 minutes, and should include: a. The specific reference (publication, title, date, author). b. Summary of the main point. c. Why it is of interest to operational risk managers. d. You own viewpoint: agree/disagree/neutral and why.  3. The best papers will be selected for presentation in class. Assignment 6: Resource A History of the United States in Five Crashes (Nations)Resources provided in class.Textbook (Hull).Tasks (5 – 7 Pages)1. Imagine you are the CRO of an organization (bank, insurer, supply chain).2. Identify two (2) crises from the Nations’ book. Briefly describe them.3. Based on the two (2) selected, (a) how would your organization be impacted? (b) What could you have done to mitigate the impact? You should refer back to materials employed in class to support your mitigation strategy.4. If you were Nations updating the book for a sixth crisis, what would it be: COVID, climate change, Cyber, other catastrophe(s)? Explain, and what two (2) lessons would you take away. For more information on Bank of America Annual Report read this: https://en.wikipedia.org/wiki/Bank_of_America

. What are some problems with granting stock options to employees? Please describe at least two problems discussed in the article and explain why those problems may hurt shareholders’ interest. 2. If granting stock options to employees is so inefficient, then why do companies grant options? According to the authors, what are some real reasons why companies grant stock options (discuss at least two of these reasons)? 3.The author evaluates the efficiency of stock options based on the assumption that an efficient compensation mechanism should incentivize financial managers to act on behalf of shareholders and try to maximize shareholders’ wealth. Perhaps, this begs the questions: Is it always desirable for financial managers to act solely in the interest of their shareholders? What about debt holders, customers, and employees? What about social responsibilities (e.g. social justice and environmental issues)? In your opinion, who else or what else should financial managers consider when making business decisions? For more information on Stock Option read this: https://en.wikipedia.org/wiki/Option_(finance)

Tony Prince and his team are working on the Recreation and Wellness Intranet Project. They have been asked to refine the existing cost estimate for the project so they can evaluate supplier bids and have a solid cost baseline for evaluating project performance. Recall that your schedule and cost goals are to complete the project in 6 months for under $200,000. Use the Cost Estimate template and Cost Baseline template to assist with this assignment. Tasks Prepare and upload a 1-page cost model for this project using spreadsheet software. Use the following work breakdown structure      (WBS), and document your assumptions in preparing the cost model. Assume a      labor rate of $100 per hour for the project manager and $60 per hour for other project team members. Assume that none of the work is outsourced,      labor costs for users are not included, and there are no additional hardware costs. The total estimate should be $200,000. Project management Requirements definition Website design  a. Registration for recreational programs b. Registration for classes and programs c. Tracking system    d. Incentive system Website development  a. Registration for recreational programs b. Registration for classes and programs  c. Tracking system   d. Incentive system Testing Training, rollout, and support Using the cost model you created in the first task,      prepare a cost baseline by allocating the costs by WBS for each month of      the project. Assume that you have completed 3 months of the project.      The BAC was $200,000 for this 6-month project. You can also make the following assumptions: PV=$120,000 EV=$100,000 AC=$90,000 a. What is the cost variance, schedule variance, cost performance index (CPI), and schedule performance index (SPI) for the project? b. Use the CPI to calculate the estimate at completion      (EAC) for this project. Is the project performing better or worse than      planned? c. Use the SPI to estimate how long it will take to finish this project. After completing your charts, write a 150-word follow-up in which you complete the following: Explain how the project is doing based on the CPI and      SPI. Is it ahead of schedule or behind? Is it under budget or over? Describe the strategies or steps that should be taken      for human resource management to avoid additional costs. Describe the strategies or steps that should be taken      for resource activity management to avoid additional costs. Recommend 2 tools to support these strategies and      explain why these tools would be beneficial. APA format!  For more information on Cost Estimate read this:  https://en.wikipedia.org/wiki/Cost_estimate

Do you consider yourself more strong or weak uncertainty avoidant? The tolerance or intolerance of ambiguity is a cultural trait. Uncertainty Avoidance is “the extent to which the members of a culture feel threatened by ambiguous or unknown situations” (Hofstede, Hofstede, & Minkov, 2010, p. 191). Cultures high (or strong) in the Uncertainty Avoidance dislike ambiguity, prefer structure and rules in organizations and relationships, and like things predictable and understandable. Cultures low (or weak) in Uncertainty Avoidance are more comfortable in ambiguous situations, prefer the spirit of the law or regulations, and can excel in undefined situations. Collectivist cultures with strong Uncertainty Avoidance can be more prone to ethnocentrism and even xenophobia. Individualist cultures with weak Uncertainty Avoidance tend to be more excepting of differences (Rohm, 2014, p. 1). For more information on Ambiguity read this: https://en.wikipedia.org/wiki/Ambiguity

Read the Notes to the Financial Statements (FS) for your SEC 10-K company.  These “notes” are displayed after the financial statements. 1. Inventory comments: comment on inventory issues using the concepts of materiality and geographic location. 2. Inventory and Sales: comment on issues related to diversity in customer base and issues of internal control. 3. Accounts Receivable and Sales:  comment on issues related to the selling and distribution system of your SEC 10-K company and issues of fraud as well as an internal control. 4. Challenges and opportunities you see as you relate our auditing topics to your company.  Details are high level in the SEC 10-K but organizations rely on Auditing concepts, as they prepare for the audits and as part of their internal control process. The postings for the SEC 10-K company should assist you with your SEC 10-K paper and project. please use PepsiCo 10k, link provide below https://www.sec.gov/Archives/edgar/data/77476/000007747619000017/pepsico201810-k.htm#s1A5A3E567CB957569E2B49DDD22FB8A2

Choose a company for which to research the connection of net income to cash flows.  Compare, contrast, and conclude the relationship or association between net income and cash flows.  Identify if the relationship works in concert – that is, does net income indicate that cash inflows are higher or lower? OR are the two items totally unrelated? Tell how the two items [net income and cash flows (inflows and outflows)] correlate in the company which you research.  Do the results tell a positive or negative view of the company?  You should include excerpts of financial statements to support your company’s situation. For more information read this: https://en.wikipedia.org/wiki/Inflow