Economic Recession and Financial Performance Questions

FINCB/571: Corporate Finance Comp 3

Part #1

Write a response to the following in a minimum of 500 words:

You are the chief risk officer for a company, and you’ve been tasked with identifying the areas where your company is exposed to systematic and unsystematic risks. Based on the information you learned in this module, what approach would you take in explaining how systematic and unsystematic risks affect risk planning?

Describe your approach. Name 3 or more systematic or unsystematic risks your company might face. Think of some implications if your company decides not to be proactive and plan for these risks.

Part #2

Write a response to the following in a minimum of 500 words:

You are a business consultant who works with new business owners. A new client wants to start a bakery and seeks your advice. Based on what you’ve learned from the readings, discuss the advantages and disadvantages of using venture capital as startup funding for a business.

Describe what approach you would recommend for the client by using the information you researched.

How does your approach differ from the recommendations of your classmates? How might your recommendations change after reading your classmates recommendations?

Part #3

Prepare a financial plan for the company you selected for your business plan (in OPSCB/574 and MGTCB/574). This financial plan will be included in your final business plan in your capstone course, STRCB/581. (Brookfield Properties Retail)

Review the company you chose to work with for your business plan that you will complete for your Integrative Business Capstone.

Describe the business, including the type of business.

Create the business case:

• Determine why funding is needed for the company.
• Determine the sources of funding. Consider self-funding, borrowing, equity, venture capital, and so on.

o Evaluate the requirements of each funding source you determined appropriate.

o Analyze the associated risks of each funding source.

o Decide which sources are the best fit for your company based on the requirements of each. Justify your decision.

• Estimate the cost of capital for both short-term and long-term funding sources. Research current estimated APRs for your selected sources of funding. Consider creating a table or chart to display this information.

Create a profit-and-loss statement for a 3-year period. Project revenue. State any realistic assumptions, such as growth per year, in your projections.

Estimate direct costs, including capital, marketing, labor, and supply costs.

Cite references to support your assignment.

Part #4

Write a response to the following in a minimum of 500 words:

Reflect on the three competencies of this course.

Consider how they might directly apply to your life and work environment when answering the questions below.

Competency 1: Assess cash flow, valuation, and key performance indicators for financial growth and sustainability.

Competency 2: Evaluate the effects of economic and market conditions on financial performance.

Competency 3: Distinguish between sources, requirements, and risks associated with various types of long- and short-term financing capital structure.

Question #1:

Provide an example of an economic recession impacting the financial performance of an industry of your choosing. Is it possible for an industry to perform well during economic downturns? What components of a financial plan might differ depending on industry? How do you determine what to include when drafting a financial plan for your organization?

Question #2:

What specific assignments or learning activities from this course did you find particularly beneficial? What do you feel could’ve improved or added to your learning experience in this course?