Capella BUS-FP3061 Unit 5 Financial Analysis Assessment Description

Assessment Context

By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:

• Competency 2: Apply accounting cycle strategies to manage business financial events.
• Compute the financial ratios used to analyze financial statements.
• Interpret the results of financial ratios using correct financial data and computations.
• Describe the calculations of ratios using correct financial data and computations.
• Interpret trends comparing one year to another using correct data.
• Recommend strategies to adjust trends in a positive direction.

Assessment Instructions

This assessment includes two parts. Use the templates provided (linked in the Assessment Resources) as you complete each part. Note that for Part 2 you will use the template for data but will create your own document to submit.

Part 1: Ratio Analysis

Making sense of accounting data on financial statements can be difficult. Thankfully, combining numbers from income statements, balance sheets, and other data provides a starting point to analyze a company's financial results. You now have the opportunity to demonstrate your prowess by identifying and computing financial ratios.

Using the Unit 5, Part 1 Template, which is linked in the Assessment Resources, analyze and compute the necessary financial ratios. The Financial Statements worksheet in the template contains the income statement, balance sheets, and additional information needed. The Ratio Analysis worksheet contains space for your calculations and answers.

Part 2: Interpreting Financial Statement Analysis

What does the calculation of a financial statement ratio represent? How does one year compare to another? Is there a trend to the ratio data? Is the trend positive or negative? What can be done to change the trend? These are some of the questions that can be answered when the ratio data is interpreted. For this part of the assessment, demonstrate your ability to interpret the results of a multi-year financial ratio analysis.

On the Unit 5, Part 2 Template, which is linked in the Assessment Resources, you will find selected ratios for a company over a two-year period. Compare the ratios, and in a separate document (Word or Excel), submit your answers to the following questions:

1. What does the calculation of each ratio represent?
2. How does year one compare with year two, and what trend can be seen when you compare the two years?
3. Is the trend from year one to year two positive or negative?
4. What are the possible reasons for the trend?
5. What recommendations do you have for turning a negative trend to a positive trend?

Submission Requirements

You are required to submit your assessment to the Turnitin source matching tool. Refer to the FlexPath instructions on the Turnitin iGuide page, linked in the Assessment Resources.

Submit the completed template for Part 1 and the document you created with answers to the questions for Part 2.

Refer to the Financial Analysis Assessment Scoring Guide to ensure that you meet the grading criteria for this assessment. Submit your assessment for faculty evaluation by clicking the linked assessment title in the assessment link below. Be sure to include the corresponding Turnitin report with your assessment.