Financial Management and Markets
Objective: Assume you are the CFO for Computron. Review the analysis of Jenny Cochran andprepare a memo addressing the following issues.
1.Identify the strengths and weaknesses of Computron using:
b.Extended Du Pont equation
c.Free cash flow
d.Economic value added (EVA)
2.Construct a forecast for 2014 utilizing the techniques (e.g. AFN and percentage of sales method) from Chapter 12
a.Compare this forecast to the estimated financial performance for 2014 provided on Page 129.
i.Evaluate the feasibility of the estimated financial performance for 2014 (likely to occur)
b.Determine whether either forecast will resolve the financial issues from 2012-2013
3.Recommend alternatives, if necessary
Source: Computron financial statements in the mini case from Chapter 2 on pages 90-92 and the additional information for this mini case from Chapter 3 on pages 127-129.
Format Basics for Memo:
To: Gary Meissner, Computron¡¦s chairman of the board
From: Your Name, CFO
Date: March 16, 2015
Re: Financial Status of Computron
Specific financial ratios or other calculations should be used to support your evaluation. Thememo
should not exceed two pages, double-spaced.Additional financial information may be provided in an
appendix to support the recommendations in the memo.
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