Case Study: Assessing a Company’s Future Financial Health
Overview
People should understand the impact of different types of risk on financial health, whether theyre dealing with personal or corporate finances. The risks for personal finance often only affect individuals and families. These risks come up, for example, when deciding whether you can afford to buy a house or invest in stocks. Financial risks for businesses often affect multiple people throughout the entire company. This includes individuals who do not work in the finance department. When businesses make finance-related decisions, its important that they know how their decisions affect all parts of their company.
Prompt
Read the case study. Then write a response.
Specifically, you must address the following rubric criteria:
- Systematic and Unsystematic Risk: Explain the differences between systematic and unsystematic risk.
- Financial Risks: Describe the potential impacts of the following types of financial risk on the company featured in the case study:
- Interest rate risk
- Economic risk
- Credit risk
- Operational risk
- Lower Growth Impact: Explain the impact that a lower growth in sales could have on the dividend policy and retained earnings for the company described in the case study.
- Higher Growth Impact: Explain the impact that a higher growth in sales could have on the dividend policy and retained earnings for the company described in the case study.
What to Submit
Your submission should be a 2- to 3-page Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style.
