This project allows you the opportunity to perform critical thinking, by addressing specific financial trends and industry comparisons for the following companies:
1. Discuss each company’s current management of working capital and current assets:
a. How does seasonality affect cash balances and inventory management?
b. Is the company managing and using its current assets well? Why, or why not?
c. What type of financing strategy does the company use?
d. How might free cash flow impact financing and investing decisions?
2. Assume the firm needs to raise a large amount of cash. Compare the choices of raising these funds in the capital market versus the bond market, and make a decision as to what is best and why. Also, consider ethical implications of financial reporting and how it relates to acquiring additional investors and accessing markets for additional capital. Consider the impact on the following on your choice:
a. The company’s existing capital structure
b. The company’s current market capitalization
c. The company’s weighted average cost of capital
d. The company’s degree of operating, financial and combined leverage.
