When using the free-cash flow model, cash flows are discounted at the weighted average cost of capital (WACC) and when using the dividend discount model, dividends are discounted at….
Prepare an analysis of the assigned company (600 – 2,000 words) in order to secure a loan for the company. The loan will increase the company’s total liabilities by 5%. The contents of the plan should include the following:
1. Write a synopsis of the company.
2. Discuss the loan amount and how you plan to use the loan proceeds.
3. Use the Excel Spreadsheet provided and complete the following.
Prepare a three year vertical analysis of the company’s income statement.
Prepare a projected income statement for 2020 assuming sales increase by 9%.
Compute the ratios listed with the income statement.
Compute the ratios listed with the balance sheet.
4. Using the results of your spreadsheet, what questions would you ask the CFO of the company? Explain.
A spreadsheet, detailed instructions, and guidance are provided during week three.
Format your paper consistent with APA guidelines. Deliverables: Paper (MS Word) and Excel Spreadsheet. Review your Originality Report generated from SafeAssign. A new originality report is created with each attempt. Your last attempt is used for grading.
This part is the teacher additional instructions
1. Open the Excel spreadsheet provided. Prepare a vertical analysis of Bridgford Foods income statement. Enter the percentages in columns C, E, and G. For additional information regarding vertical analysis, please review the following.
2. Prepare a projected income statement assuming sales increase by 9% in 2020.
Average your vertical analysis percentages for each income statement account and enter the results in column H, rows 4 – 11. Example: Add columns C, E, and G and divide by 3. (60.58+63.17+67.57)/3=63.77%. Column H, row 5 = 63.77%.
Enter your projected sales number in column J, row 4.
Column J: Multiply projected sales by the average percentage.
3. Ratio Computations. Use Excel formulas to calculate financial ratios listed with the income statement and balance sheet tabs. Calculate the ratio for all four years (i.e. 2016-2018 and 2020). Do not prepare ratios that require data from the 2020 balance sheet. In this case, an “X” is entered in the appropriate cell. For additional information regarding ratios, please review the following.
4. Synopsis and Loan Proceeds: The written section of the project includes a synopsis of the company, loan proceed discussion, and CFO questions and explanations. Use the following resources to write a synopsis and to evaluate and explain how you plan to invest the loan proceeds.
Corporate Annual and Earnings Report
5. Chief Financial Officer Questions: Using the results of your spreadsheet, what questions would you ask the CFO of Bridgford Foods? Explain.