In this project, you will demonstrate your mastery of the following competencies:Apply tools and techniques for reporting financial statement valuation and projectionsDetermine organizational health using economic, industry
SNHU ACC 345 project week 7 Project Guidelines and Rubric
Project Guidelines and Rubric
Competencies
In this project, you will demonstrate your mastery of the following competencies:Apply tools and techniques for reporting financial statement valuation and projectionsDetermine organizational health using economic, industry, and financial analysesCommunicate business analyses and valuation reports to inform business decisionsOverviewAccounting professionals are often asked to provide financial statement analysis for a variety of reasons and audiences. Internally, such evaluations of a company’s health and value may beused to inform decisions regarding redeployment of assets or improved operational performance. Externally, they may be used in making credit or investment decisions.You will have the opportunity to evaluate the overall health of the company and its future prospects. Keep in mind when preparing valuation reports, you will more than likely be working ona team. You will need to gather the necessary information that has been assigned to you and report your findings to the rest of the team to determine whether to invest in the company ornot at this time.DirectionsComplete the following in the same files—Project Workbook Template and Business Valuation Template—that include your original work from all the milestones.Note: You may choose to complete an assignment using a desktop program instead of SNHU's virtual desktop (VDI); however, technical support will not be provided by SNHU if you selectthis option.You will prepare projected financial statements and cash flows for five years for the same company you have been researching throughout the milestones. Any discounts appropriate fromthe research should be included in the valuation as identified below. Once you have gathered all the information, you will prepare a professional report for your team.For the final valuation calculation, you will be estimating your selected company’s value by using an earnings-based approach, specifically the discounted cash flow model. You will beapplying all applicable discounts to arrive at a final indication of value.You will have an opportunity to correct your answers from Milestone Two in the Project Workbook Template on the corrected tabs based on the feedback from your instructor.Specifically, you must address the following rubric criteria:Project Workbook Template1. Correct all errors from Milestone Two by using the Corrected Balance Sheet, Corrected Income Statement, and Corrected Ratios tabs. Highlight corrections in green or with an asterisk.
8/12/24, 7:27 PM Assignment Informationhttps://learn.snhu.edu/d2l/le/content/1642957/viewContent/33473165/View 2/82. Forecast income statements of the company for the next five years on the Prospective Analysis tab. Use the historical statements as a guide with your external research on thecompany and the industry. Include the following details in your response:A. Forecast the annual revenue growth rate percentage each year over the next five years.B. Forecast the annual gross profit margin as a percentage that you expect to see over the next five years.C. Forecast the selling, general, and administrative (SG&A) expenses as a percentage of revenue over the next five years.D. Forecast your company’s future interest expense each year for the next five years.E. Forecast any additional other income (expense) as determined is necessary.3. Forecast the cash flow of the company for the next five years on the DCF (discounted cash flow) tab. Include the following details in your response:A. Add back estimated depreciation to the company’s forecasted net income.B. Subtract out projected spending on capital expenditures for the company.C. Subtract out or add back the future cash flow from financing expected for the company.Note: If you received a perfect score for Milestone Two, you do not need to correct any errors. Simply note it in the designated section within the workbook. You will receive full points forthis rubric criterion.Business Valuation TemplateAssumptions and Rationale1. Explain all assumptions used in the forecast and your rationale. Include the following details in your response:A. Explain assumptions for the Prospective Analysis tab (revenue growth rate, gross profit margin, SG&A expenses, interest expense).B. Explain assumptions for the DCF tab (depreciation added back, capital expenditures, and debt reduction).C. Explain assumptions for the Valuation Summary tab.2. Explain all discounts that are used in the valuation process and how they are derived. Include the following details in your response:A. Include current discount rate.B. Include discount for lack of marketability (DLOM) and discount for lack of control (DLOC).C. Provide your rationale if you changed the given discount rates.3. Provide evidence in your write up that all supported assumptions are related to research.4. Determine if the metrics have any correlation with the company performance. Include the following details in your response:A. Explain if the turnover rates relate to the company.B. Explain if the advancement rates relate to the company.
8/12/24, 7:27 PM Assignment Informationhttps://learn.snhu.edu/d2l/le/content/1642957/viewContent/33473165/View 3/8C. Explain if the diversity representation rates relate to the company.5. Summarize the micro and macroeconomic factors that impact your industry.6. Identify historical global and/or domestic major event(s) and relate it back to historical financial company health changes. Global and/or domestic events include significant naturaldisasters, global conflicts, and/or health crises. Consider the following questions to guide your response:A. What was the financial health of the company before global and/or domestic major events?B. What was the financial health of the company during global and/or domestic major events?C. What was the financial health of the company after global and/or domestic major events?7. Explain changes in consumer behavior patterns due to historical global and/or domestic major event(s) that may impact your company’s projections.Analysis8. Explain the difference between the current market price and the final valuation. Include the following details in your response:A. Provide today’s market price of the stock for the company.B. Provide a rationale.9. Explain financial qualitative information in regulatory filings. Include the following details in your response:A. Comment on any potential earnings management happening in the financial statements.B. Comment on any other potential fraudulent activity.10. Explain how historical global and/or domestic major event(s) in the industry may impact the company into the future. Consider the following questions to guide your response:A. Was there a major shift with technology advances?B. Did a competitor make a huge shift in its products or services offered?Business Valuation Team Report1. Create visualizations to show findings that are relevant to the valuation team.2. Create a professional report for the valuation team that is easy to follow and clearly documents how you arrived at your final valuation along with your recommendation. Include thefollowing detail in your response:A. Include the metrics on how you projected the company’s revenue profit margins and cash flow.B. Include a cover page.C. Include all key elements (executive summary, company overview, economic and industry trends, financial analysis, valuation approaches and methods used, discounts and otherconsiderations, and appraisal conclusion).
8/12/24, 7:27 PM Assignment Informationhttps://learn.snhu.edu/d2l/le/content/1642957/viewContent/33473165/View 4/8D. Include your recommendation on investing in the company at this time.If you need writing support, access the Academic Support module of your course.What to SubmitTo complete this project, you must submit the following:Completed Project Workbook TemplateSubmit the same file submitted for Milestone Two with your instructor feedback and the following tabs completed: Corrected Balance Sheet, Corrected Income Statement, Corrected Ratios,Prospective Analysis, DCF, Valuation Summary.Completed Business Valuation TemplateSubmit the same file submitted for Milestone One, Milestone Two, and Milestone Three with the Project section completed of the Business Valuation Template. The Project section shouldbe 4- to 6-page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins within the completed template. Sources should be cited according toAPA style.Valuation Team ReportSubmit a 4- to 6-page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins that includes visualizations to support your findings. Sourcesshould be cited according to APA style.Project RubricCriteria Exemplary Proficient Needs Improvement Not Evident ValueProject Workbook Template: N/A Corrects all errors from Shows progress toward Does not attempt criterion 6Correct All Errors Milestone Two by using the proficiency, but with errors or (0%)Corrected Balance Sheet, omissions; areas forCorrected Income Statement, improvement may includeand Corrected Ratios tabs additional details or(100%) clarification on the CorrectedBalance Sheet, CorrectedIncome Statement, andCorrected Ratios tabs (55%)
8/12/24, 7:27 PM Assignment Informationhttps://learn.snhu.edu/d2l/le/content/1642957/viewContent/33473165/View 5/8Criteria Exemplary Proficient Needs Improvement Not Evident ValueProject Workbook Template: N/A Forecasts income statements Shows progress toward Does not attempt criterion 6Income Statements of the company for the next proficiency, but with errors or (0%)five years on the Prospective omissions; areas forAnalysis tab (100%) improvement may includeadditional details orclarification on the incomestatements (55%)Project Workbook Template: N/A Forecasts the cash flow of the Shows progress toward Does not attempt criterion 6Cash Flow company for the next five years proficiency, but with errors or (0%)on the DCF tab (100%) omissions; areas forimprovement may includeadditional details orclarification on the cash flow(55%)Business Valuation Exceeds proficiency in an Explains all assumptions used Shows progress toward Does not attempt criterion 6Template: All Assumptions exceptionally clear and in the forecast and rationale proficiency, but with errors or (0%)insightful manner (100%) (85%) omissions; areas forimprovement may includeadditional details orclarification on assumptions(55%)Business Valuation Exceeds proficiency in an Explains all discounts that are Shows progress toward Does not attempt criterion 6Template: All Discounts exceptionally clear and used in the valuation process proficiency, but with errors or (0%)insightful manner (100%) and how they are derived omissions; areas for(85%) improvement may includeadditional details orclarification on discountsapplicable to the company(55%)
8/12/24, 7:27 PM Assignment Informationhttps://learn.snhu.edu/d2l/le/content/1642957/viewContent/33473165/View 6/8Criteria Exemplary Proficient Needs Improvement Not Evident ValueBusiness ValuationTemplate: SupportedAssumptionsExceeds proficiency in anexceptionally clear andinsightful manner (100%)Provides evidence that allsupported assumptions arerelated to research (85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on the evidencerelated to research for allassumptions (55%)Does not attempt criterion(0%)6Business ValuationTemplate: MetricsExceeds proficiency in anexceptionally clear andinsightful manner (100%)Determines if the metrics haveany correlation with thecompany performance orvaluation metrics (85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on if the metricshave any correlation with thecompany performance orvaluation metrics (55%)Does not attempt criterion(0%)6Business ValuationTemplate: Micro andMacroeconomic FactorsExceeds proficiency in anexceptionally clear andinsightful manner (100%)Summarizes the micro andmacroeconomic factors thatimpact an industry (85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on micro andmacroeconomic factors thatimpact the industry (55%)Does not attempt criterion(0%)6Business ValuationTemplate: Major EventsExceeds proficiency in anexceptionally clear andinsightful manner (100%)Identifies historical globaland/or domestic major event(s)and relate it back to historicalfinancial company healthchanges (85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on major eventsand how they relate back tothe historical financial companyhealth changes (55%)Does not attempt criterion(0%)6
8/12/24, 7:27 PM Assignment Informationhttps://learn.snhu.edu/d2l/le/content/1642957/viewContent/33473165/View 7/8Criteria Exemplary Proficient Needs Improvement Not Evident ValueBusiness ValuationTemplate: ConsumerBehaviorExceeds proficiency in anexceptionally clear andinsightful manner (100%)Explains changes in consumerbehavior patterns due tohistorical global and/ordomestic major events thatmay impact your company’sprojections (85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on changes inconsumer behavior patterns(55%)Does not attempt criterion(0%)6Business ValuationTemplate: Current MarketPriceExceeds proficiency in anexceptionally clear andinsightful manner (100%)Explains the differencebetween the current marketprice and your final valuation(85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on the differencebetween the current marketprice and your final valuation(55%)Does not attempt criterion(0%)6Business ValuationTemplate: FinancialQualitative InformationExceeds proficiency in anexceptionally clear andinsightful manner (100%)Explains financial qualitativeinformation in regulatory filings(85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on the financialqualitative information inregulatory filings (55%)Does not attempt criterion(0%)6Business ValuationTemplate: Impact theCompanyExceeds proficiency in anexceptionally clear andinsightful manner (100%)Explains how historical globaland domestic major events inthe industry may impact thecompany into the future (85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on how historicalglobal and/or domestic event(s)in the industry may impact thecompany into the future (55%)Does not attempt criterion(0%)6
8/12/24, 7:27 PM Assignment Informationhttps://learn.snhu.edu/d2l/le/content/1642957/viewContent/33473165/View 8/8Criteria Exemplary Proficient Needs Improvement Not Evident ValueBusiness Valuation TeamReport: VisualizationsExceeds proficiency in anexceptionally clear andinsightful manner (100%)Creates visualizations to showfindings that are relevant to thevaluation team (85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on findings thatare relevant to stakeholders(55%)Does not attempt criterion(0%)6Business Valuation TeamReport: Professional ReportExceeds proficiency in anexceptionally clear andinsightful manner (100%)Creates a professional reportfor the valuation team that iseasy to follow and clearlydocumented on how youarrived at your final valuation(85%)Shows progress towardproficiency, but with errors oromissions; areas forimprovement may includeadditional details orclarification on the report tovaluation team (55%)Does not attempt criterion(0%)6Articulation of Response Exceeds proficiency in anexceptionally clear andinsightful manner (100%)Clearly conveys meaning withcorrect grammar, sentencestructure, and spelling,demonstrating anunderstanding of audience andpurpose (85%)Shows progress towardproficiency, but with errors ingrammar, sentence structure,and spelling, negativelyimpacting readability (55%)Submission has critical errors ingrammar, sentence structure,and spelling, preventingunderstanding of ideas (0%)5Citations and Attributions Uses citations for ideasrequiring attribution, with fewor no minor errors (100%)Uses citations for ideasrequiring attribution, withconsistent minor errors (85%)Uses citations for ideasrequiring attribution, withmajor errors (55%)Does not use citations for ideasrequiring attribution (0%)5Total: 100%