Individual

Scott Equipment Organization Paper

Scott Equipment Organization is investigating various combinations of short- and long-term debt in financing assets. Assume the organization has decided to employ $30 million in current assets and $35 million in fixed assets in its operations next year, provided the level of current assets, anticipated sales, and EBIT for next year are $60 million and $6 million, respectively. The organization’s income tax rate is 40%. Stockholders’ equity will be used to finance $40 million of assets, with the remainder financed by short- and long-term debt. The organization is considering implementing one of the policies in the diagram.

Amount of Short-Term Debt

Determine the following for each policy:

·         Expected rate of return on stockholders’ equity

·         Net working capital position

·         Current ratio

Write a 1,400- to 1,750-word paper in which you evaluate profitability versus risk trade-offs of these policies. Would you rate them low, medium, or high with respect to profitability? Would you rate them low, medium, or high with respect to risk? 

Format your paper consistent with APA guidelines.

Mon

7

Individual

Assignments from the Readings

Resource: Principles of Managerial Finance

Prepare responses to the following problems from the text:

·         Ch. 14: P14–9, P14–16

·         Ch. 15: P15–9

Mon

5

Learning Team

Working Capital Strategies Paper and Presentation

Resource: Financial Outcomes Paper

Write a 1,400- to 2,100-word paper in which you review your organization’s most recent financial reports, such as balance sheets, statements of cash flow, management comments, and footnotes to financial statements, to explain how each current asset and liability account has affected cash management strategies. Complete the following in your paper:

·         Assume next year’s forecasted revenues increase by 20%.

·         Provide a detailed working capital recommendation to senior management based on next year’s increase in revenue along with assumptions you make regarding other line items in the pro forma financial statements.

·         Discuss the effect of this revenue increase on the firm’s working capital policy.

·         Identify lessons learned and discuss areas for further development in your conclusion.

Format your paper consistent with APA guidelines.

Create a 5- to 8-slide Microsoft^® PowerPoint^® presentation for the organization’s senior management with an executive summary of your Working Capital Strategies paper.

Mon

15