Financial Returns and Capital Constraints w/ calculations
Part 1 In order to be successful, companies must leverage their spending in ways that will add to their value and propel them in the marketplace. In this portion of your report you will use the skills and content you mastered in your Adaptive Coach this week, to analyze the business conditions and begin to create the big financial picture of how the chosen company is spending their money and managing their investments in the future value of their organization through purchases and research and development. Include the following content in this section. Formulate the expected financial returns and associated risks by completing the following calculations. Calculate the Return on Equity (ROE) using the DuPont system. Calculate the Constant Growth Stock Valuation (CGSV) and compare it to the current stock price. Research your company’s industry and evaluate what type(s) of capital constraints your company must consider in order to be competitive in the market. Explain the appropriate financial techniques that would be used in this evaluation. Part 2 Explain what the results of your calculations say about the overall health of the company and its future value. Describe the data points you found in the annual report that relate to the company’s capital constraints and spending trends. Interpret the data points and explain whether or not the company is making appropriate capital expenditure allocations.