Capital structure and financial leverage

Capital structure and financial leverage

Use the company’s balance sheet to describe the different forms of liabilities it uses, make sure to break down the company’s debt. Is the debt increasing or decreasing? Does the company have enough operating cash to pay maturing debt (remember, maturing debt is most important, because the same way you need money to pay only the mortgage payment that is due and not your entire mortgage balance, a company is relatively OK as long as it can pay the debt that is due in a particular year rather than its entire debt.) Use the debt ratio (p 431) to show what portions of assets are financed through debt rather than equity. Use the times interest earned ratio (p431) to show the number of times over a company has its interest obligation covered by earnings before it pays interest and taxes. Use the cash coverage ratio which shows how well the company can generate cash to meet its financial obligations. Does it sound like the company is going to assume more debt in the future? (You have to read between the lines. A company that hints that it’s going to buy other companies but doesn’t have the cash on its balance sheet is indirectly telling you that it will borrow more money or raise equity from investors to finance such spending)

More debt could mean less cash for investors, which could ultimately impact the stock price. ). In this section, tell me what kinds of debt do they have? Do they get their financing from loans? Bonds? Selling common stock? Preferred stock? A combination of these? In other words, list where their primary financing comes from.

  • Tables

In addition to the information presented above, you will provide the following slides. The first slide, titled SELECTED FINANCIAL DATA, which has the most important financial numbers from the last two years. This could be information from the main financial statements. From IS you could include revenue, gross profit, operating profit, interest expense, EBITDA, and net income. From SOCF you include operating cash flow, investing cash flow, financing cash flow, and change in cash. From the BS, assets, cash and cash equivalents, liabilities, total debt, shareholder’s equity. If you feel other numbers are significant for your particular company, feel free to include them as well.

The second slide, titled KEY RATIOS, should have all relevant financial ratios for the last two fiscal years that you have calculated for the purpose of the project. To earn the max points, apply 10 relevant ratios we learned in chapter 14 to support your conclusion.

  • Conclusion

The purpose is to summarize all of your findings. You can include a summary of what they do, its income performance, its cash flow ability, its overall financial position (balance sheet). Also include non-financial factors that you think impacts the assigned investment decision. Conclude with your final recommendation. If the company is rated by one of the major risk rating agencies, Standard and Poor’s, Moody’s, or Fitch Ratings, include the rating that has been assigned by those parties, or if you can find another 3rd party rating from an analyst on the stock include this. I know this may not be as easy to get, so just a marginal point total is earned here. The last slide should list your references where you retrieved the financial statements.

The purpose of the conclusion is so the audience can quickly understand what your company does, what its financial condition is, and what investment decision has the analyst assigned for the company.

Get Nursing Homework Help with HelpHub 

HelpHub
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Choose HelpHub

HelpHub

Quality Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

HelpHub

Qualified Writers

We have hired a team of professional writers experienced in academic and business writing. Most of them are native speakers and PhD holders able to take care of any assignment you need help with.

StudyAcer

Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account.

StudyAcer

On Time Delivery

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. We will always strive to deliver on time.

StudyAcer

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text.

StudyAcer

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Help Hub

Place your order

Fill in the order form and provide all details of your assignment.

Help Hub

Proceed with the payment

Choose the payment system that suits you most.

Help Hub

Receive the final file

Once your paper is ready, we will email it to you.

HelpHub Writing Services

No need to work on essay at night. Sleep tight, we will cover your back. We offer all kinds of essay writing services.

HelpHub HelpHub

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

HelpHub HelpHub

Admissions

Admission Essays

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

HelpHub HelpHub

Editing

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

HelpHub HelpHub

Revision

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied.