Financial Analysis
The Final Project for this module is a consultancy report to Anthony's Orchard, an expanding apple orchard and distributor. The company has been entertaining the idea of expanding its product line to include apple juice. In order to do this, a major investment in an apple press is needed. The aim of your consultancy report is to analyze all relevant data and make a recommendation to the management of the company in regard to this idea. Each of the remaining Individual Assignments Submission in this module will focus on one component of this consultancy report; in Unit 6 you will compile these, complete your analysis and submit the Final Project.
Measuring and regularly monitoring the financial health of a company, using budgeting and control methods, is a vital concern for managers. By acquiring and analyzing timely and accurate financial data, decision-makers will have the tools to facilitate operational and strategic decisions. These decisions may concern reactions to business or environmental conditions, resource acquisition, expansion and more.
This Individual Assignment will provide the opportunity to analyze financial data for Anthony's Orchard. As you heard from company CEO Bob Frost in this unit's media piece, Anthony's Orchard would like to make aggressive plans for its future, including the expanded product offering described above. At the same time, unforeseen circumstances can impact the current health of the company as well as its future plans. What-if analyses are valuable aids in assessing a variety of planned and unplanned events. You will utilize the analysis you conduct here as part of the Final Project.
To prepare for this Individual Assignment:
1 Review the readings and media for this unit, including the Anthony's Orchard case study media.
2 Familiarize yourself with the Anthony's Orchard company and its current situation; this can be done by exploring each of the tabs across the top of the screen in the Anthony's Orchard case study media. Hint: You should focus on the financial information.
To complete this Individual Assignment:
1 Review the Financial Statements: Analyze the current financial state of Anthony's Orchard and evaluate the impact of a major customer cancelling their expected order. This analysis should include the following:
- Your view of the current financial health of the company
- Your assessment of the materials and labor costs
- Your assessment of the income statement
- Your assessment of the cash flow statement
- Your assessment of each of the business units in Anthony's Orchard
- C-V-P analysis of the current year's financials
2 Conduct a What-If Analysis: This what-if analysis concerns an unforeseen circumstance that could impact the company's current health as well as its future plans. A major customer is considering cancelling their order for prepared apple products. This customer accounts for 25% of the prepared apple product revenue. Evaluate the impact of this on the budgeted statements contained in the case study.
Notes:
You should fully state and justify any assumptions that you choose to make in relation to the financial data you use. For example, if you make assumptions about the state of the economy or the industry over the period you cover in your analysis, be sure to state these and identify why you believe they are worth consideration here.