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FIN 534 Discussion Week 1 Discussion 1

What are at least 2 reasons why corporate finance is important to all managers? Support your response with examples of activities and events that demonstrate this importance. 1) Managers need to understand finances of their company in order to help the company grow, pay its bills, and invest in ways to reinvent or keep up with customer trends. Thus all managers need to understand how they impact the return on investment to a company. 2) Helps manager understand why changes are needed and provides needed training in those areas to help support the company needed changes. From how to help with human resources issues to decrease employee liability from safety concerns or wrongful termination. 3) Helps the company understand where to put their money when it comes to expanding the business from online activates, advertising, inventory management, to current pricing or sales. 4) Manager need to understand controllable and non controllable and then be able to set up action plans to help maximize their opportunities to help the company continue to have a the resources they need to support the manages from a higher level. In your judgment, what were the principal causes of the recent financial crisis and Great Recession? Would you include Government policies that encouraged housing purchases for those who could not afford them, artificially low interest rates implemented by the Federal Reserve, banks and mortgage brokers who were greedy, the failure of Government regulators to provide proper oversight to the banks and other financial institutions, individuals who borrowed and spent more than they should have, or some other causes? The Great Depression was different that the current depression we are hopefully exiting. Great Depression happened because of the stock market crash and bank failures. The current crash was based on not enough checks and balances to ensure that those loaning the money were doing the right thing by the people asking for the money. One would hope that they would but this is why there needs to be policies in place to help not only protect the consumer but those of use not borrowing but relying on them to make their payments. Yet many did see this coming as I was often offered a home of over $300,000 yet I kept letting my agent know that I didnt want to spend more than $150,000. While I could get a loan for the higher amount I didnt want all that house or responsibility. My concern is now that there are more policies and watchdogs in place this doesnt resolve the problem of people over extending themselves. What will retirement

look like for the current generation and will that create another crash or crisis as medical expenses for the retired will increase thus the demand on government assistants will grow. Do we have the right checks and balances in place to prevent a crisis that will be sure to come do to health insurance cost of the retired who do not have the money to retire. From the e-Activity, examine ethical behavior within firms in relation to financial management. Provide at least 2 examples of companies that have been guilty of ethics based malfeasance related to financial management. Explain why the sanctions and penalties were appropriate. Course there are the Nike, JPMorgan, Apple, and Im sure other companies out there who practice unethical behavior. Yet I like to think and hope there are more doing the right thing. JPMorgan crazy bonuses, to Nike using under age works, and Apple not paying taxes. Chevron could have disposed of the waste correctly. JPMorgan could have checked into why their people were getting such large bonuses and termed them for unethical practices rather than blame them for the issues they faced (Jackson, 2011). Apple could have simply paid their taxes. Nike could have hired and paid those who created their products rather than underpaying and using child labor. In the end all will or have ended up paying out more than what they saved with their unethical behavior (Boggan, 2011). Boggan, S. (2001). Nike Admits to Mistakes Over Child Labor. Retrieved from: http://www.commondreams.org/headlines01/1020-01.htm. Jackson, B. C. (2011). JPMorgan's Latest Show Of Unethical Behavior. Retrieved from: http://technorati.com/business/finance/article/jpmorgans-latestshow-of-unethical-behavior/. Worstall, T. (2013). The Damning Evidence That Apple Really Isn't Paying Taxes That Are Due. Retrieve from: http://www.forbes.com/sites/timworstall/2013/10/29/the-damning-evidence-thatapple-really-isnt-paying-taxes-that-are-due/. Week 1 Dis 2 A. Why are financial securities important to financial managers? Explain and discuss your response. Financial securities is a paper with contractual provisions that entitle their owners to specific rights and claims on specific cash flows or values (2011). Financial securities are important to financial managers as it helps them take the need to maximize the wealth of their shareholders. This helps managers see the cash flow of the business when in turns helps them see if the company is healthy and wealthy. Thus they know they will have the resources to continue to build upon the business. Managers should know there are (3) three types of financial securities (1) debt, (2) equity, and (3) derivatives.

B. From the scenario (Scenario Topic: the primary objective of the corporation: value maximization), recommend at least two (2) actions that Trevose Fitness Center (TFC) could take in order to raise capital that will, in turn, enable it to reach its expansion goals. How can you defend your response? Support your recommendations with at least two (2) real-world examples of successful implementations of these actions. (1) Offer discounts to join and a friends discount to both the friend and the primary member. 2) The company could offer stocks to those who want to invest. 3) The company could provide 3, 6, and 12-month agreements at different price discounts for the longer period they join. 4) Reach out to companies to offer a discount to those employees as a wellness benefits. 5) Angel investors is another to raise money without losing part of the company. For example Reid Hoffman was an angel investor with LinkedIn, Facebook, Zynga, and Flickr. Another example would be Peter Thiel who invested $500,000 in Facebook for 10% of the company. He also invested with LinkedIn, Friendster, and Yelp. By offering stock to investors, investors know that they are in it for the long term thus giving the company more time to make the needed changes to grow the business. For example Facebook is expected to offer secondary shares 70 million shares, while the company doesnt need raise money they are to capitalizing on their current strong market valuation. Meaning they are getting the money to use later. Which is a good stratagem as it is harder to get money when things are not going well (Forbes.com, 2013) References: Brigham, E., & Ehrhardt, M. (2014). Financial management. (14th ed.). Mason, Ohio: Cengage Learning. Forbes.com, (2013). The Impact of Facebooks Secondary Stock Offering. Retrieved from: http://www.forbes.com/sites/greatspeculations/2013/12/23/theimpact-of-facebooks-secondary-stock-offering/.

Week 2 Discussion 1: Financial Statement, Cash Flow, and Taxes A. Why is it important for financial managers to understand financial statements? Explain the rationale behind your analysis. B. This discussion assignment will allow for the completion of a ratio analysis. It will also provide information that will be useful as you prepare the written report for Assignment 1: Financial Research Report, which is due at the end of Week 10. Step 1: Select a publicly-traded company that you will (or might) use for Assignment 1: Financial Research Report (due at the end of Week 10). Step 2: Locate financial ratio data from Mergent Online. Financial statements, ratios, and other useful information are available from the Mergent Online database that is available through the Strayer University Learning Resource Center (online). Please notice that financial ratios are grouped into appropriate categories (Profitability Ratios, Liquidity Ratios, Debt Management Ratios, and Asset Management Ratios), which makes it easy to set up the ratios and use them in the analysis.

Accessing the Mergent Online Database - Financial Statements for companies, financial ratios, and Form 10K annual reports can be obtained from the Strayer University Learning Resource Center, which is accessible from the Online Classroom (see tab at the top of the screen). Select Learning Resource Center Select Databases Select Mergent Online Then, in the block titled Company Search Enter Symbol or Company Name enter the companys name or its Stock Ticker Symbol (e.g., for McCormick Company, enter MKC). Next, select the company from the drop-down menu. For Financial Statements Select Company Financials tab For Financial Ratios Select Company Financials tab and Ratios sub-tab For Form 10K Annual Reports Select Filings tab (and then select the most recent Annual Form 10K report) Step 3: Enter the financial ratio data into the Financial Ratio Analysis Model (the attached Excel spreadsheet). The data need to be entered in the yellow-coded cells (column is titled Oldest Year) progressing to the most recent year on the left (column is titled Most Recent Year). The model presently contains financial information for McCormick & Company (Stock Ticker MKC). You will note at the Excel spreadsheet model is programmed to calculate if each ratio improved or deteriorated over the time period. And, the spreadsheet is programmed to calculate the percentage change in each of the ratios during the same period. This information should be helpful as you prepare your analysis. (Note: This spreadsheet could be imported into the Assignment 1: Financial Research Report due at the end of Week 10.) Step 4: Prepare an analysis and discussion of the financial ratio data that are examined in the Financial Ratio Analysis Model. (Note: In addition to Mergent, another good source of financial data and company information is: http://www.advfn.com .)

Week 2 Discussion 2: Analysis of Financial Statements A. * From the e-Activity, determine why it is sometimes misleading to compare a companys financial ratios with those of other firms that operate in the same industry. Support your response with at least one (1) example from your research. B. * From the scenario determine two (2) strategies that TFC could utilize to reach its expansion goals. You may, for example, consider your analysis of TFCs financial statements, as well as your knowledge of TFCs excessive cash position. What is the rationale for your response?