Executive Summary Guidelines And Rubric Scenario You have almost completed your analysis of Companies A and B and are scheduled to deliver your proposal to

Executive Summary Guidelines And Rubric Scenario
You have almost completed your analysis of Companies A and B and are scheduled to deliver your proposal to the board. While researching to ensure accurate and up-to-date data, you learn that two of Company B’s aircraft have been grounded over the past couple of months due to technical issues, one of which could have been an FAA safety violation.
The subsequent investigations, technical repairs, and grounded flights have led to a 10% drop in their revenue over the last month. Mitigation expenses have added about $80,000 to their operating costs. Company B has also suffered negative customer feedback due to some of the ground crew’s mishandling of the situation.
In this assignment, you will write an executive summary to capture the situation and share your analysis and perspective on how these safety issues might affect your acquisition recommendation.
Prompt
Write an executive summary describing the newly discovered concerns and your analysis of the situation at Company B.
Specifically, you must address the following rubric criteria:

Summarize the safety issues and their direct impact on the company over the past month.
Describe how this news affects factors other than revenue, which will then affect the company’s value.
How does this affect your initial performance evaluation and analysis of the company?

Do you see any additional risks? Explain.

Will it impact your recommendation about acquisition? Why or why not?

What additional information about this situation will you need to make your final decision?

Guidelines for Submission
Submit a 1- to 2-page Word document using double spacing, 12-point Times New Roman font, and one-inch margins. Sources should be cited according to APA style. Consult the Shapiro Library APA Style Guide for more information on citations. COMPANY B Three Year Data

B_CO_FINANCE Learner Copy Rev 3/14/21

COMPANY B

Illlustrative Data for Educational Purposes

All values shown are in thousands.

2017 2018 2019

Income Statement

Revenue 27,981 26,302 27,091

Cost of Goods Sold (COGS) 15,389 18,411 18,151

Gross Profit 12,591 7,891 8,940

Expenses

Salaries and Benefits 2,910 2,600 2,910

Rent and Overhead 1,354 1,354 1,354

Depreciation and Amortization 2,814 2,806 2,776

Interest 2,700 1,800 1,800

Total Expenses 9,778 8,560 8,840

Earnings Before Tax 2,813 (669) 100

Taxes 788 (141) 21

Net Earnings 2,025 (529) 79

2017 2018 2019

Balance Sheet

Assets

Cash 82,445 82,914 72,944

Accounts Receivable 1,380 1,297 1,336

Inventory 3,078 2,018 1,989

Property and Equipment 37,413 37,007 37,032

Total Assets 124,316 123,236 113,301

Liabilities

Accounts Payable 1,560 1,009 995

Debt 90,000 90,000 80,000

Total Liabilities 91,560 91,009 80,995

Shareholders’ Equity

Equity Capital 33,685 33,685 33,685

Retained Earnings (928) (1,457) (1,378)

Shareholders’ Equity 32,757 32,228 32,307

Total Liabilities and Shareholders’ Equity 124,317 123,236 113,301

2017 2018 2019

Cash Flow Statement

Operating Cash Flow

Net Earnings 2,025 (529) 79

Plus: Depreciation and Amortization 2,814 2,806 2,776

Less: Changes in Working Capital (10,312) (592) 25

Cash from Operations 15,151 2,869 2,830

Investing Cash Flow

Investments in Property and Equipment 2,706 2,400 2,800

Cash from Investing 2,706 2,400 2,800

Financing Cash Flow

Issuance (repayment) of Debt – – (10,000)

Issuance (repayment) of Equity – – –

Cash from Financing – – (10,000)

Net Increase (decrease) in Cash 12,445 469 (9,970)

Opening Cash Balance 70,000 82,445 82,914

Closing Cash Balance 82,445 82,914 72,944

Supporting Schedules

Working Capital Schedule

Accounts Receivable 1,380 1,297 1,336

Inventory 3,078 2,018 1,989

Accounts Payable 1,560 1,009 995

Net Working Capital (NWC) 2,898 2,306 2,331

Change in NWC (10,312) (592) 25

Depreciation Schedule

PPE Opening 37,521 37,413 37,007

Plus Capex 2,706 2,400 2,800

Less Depreciation 2,814 2,806 2,776

PPE Closing 37,413 37,007 37,032

Debt and Interest Schedule

Debt Opening 90,000 90,000 90,000

Issuance (repayment) – – (10,000)

Debt Closing 90,000 90,000 80,000

Interest Expense 2,700 1,800 1,800

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