FIN691 Internship In Finance

Data to different managers in an organization:

For presenting the interpretation of data used in the analysis, it is necessary to convey the same to various internal parties within the organization and the external parties as well. In this case, the data interpretation would be conveyed to the following three personnel and/or institution:

1. Supervisor:

The supervisors tend to look after the profitability of a proposed project or investment in terms of revenues to be generated and cash inflows after deduction of appropriate expenses (Bader, Al-Nawaiseh & Nawaiseh, 2018). In this case, the proposed project is expected to make positive contributions to the overall organization. This is because the project is deemed to be profitable, since the NPV is obtained as $4.14 million and the enterprise value is obtained as $2.55 million. These are the two important figures for the supervisor of the organization, since they need to show the same to the equity stockholders of the organization for seeking prior approval (Baum & Crosby, 2014). Thus, these two values need to be provided adequate importance supported by relevant justifications for obtaining consent from the supervisor of the organization.

2. Horizontal managers and colleagues:

In order to present the data to the horizontal managers and colleagues of the organization, focus needs to be kept on the estimations made in terms of revenue and expenses. In this case, the sales growth rate is expected to increase by 16.50% for the first six months and the increase would be by 6% after the first six months. The managers consider the sales growth rate to be an important factor for capital investment decision, as fall in growth rate would minimize the overall profitability of the organization (Elmassri, Harris & Carter, 2016). Moreover, information regarding cost of sales is to be provided to the managers and colleagues and in this case, the cost of sales is assumed as 73.94%. However, it is found that the sales growth rate is projected based on high sales figures in contrast to the company average. Hence, this information is to be provided to the managers of the organisation so that revisions could be made in pricing strategies for meeting the estimated sales growth rate.

3. Financial institution:

In order to seek funds for the project, the organization needs to obtain loan from financial institution. For obtaining funds, the management of the financial institution would like to analyze the current financial health of the organization and the scope of profitability for the proposed investment or project (Gotze, Northcott & Schuster, 2016). In this case, the financial ratios calculated are to be presented in front of the financial institution so that they could assess the current financial condition of the organization. In this case, the asset turnover is expected to increase heavily, while there would be significant decline in liquidity ratio. However, this decline could be offset by the profits expected to be generated from the project. Hence, this financial information needs to be presented in front of the financial institution for obtaining funds required for the project.

References:

Bader, A., Al-Nawaiseh, H. N., & Nawaiseh, M. E. (2018). Capital Investment Appraisal Practices of Jordan Industrial Companies: A Survey of Current Usage. International Research Journal of Applied Finance, 9(4), 146-161.

Baum, A. E., & Crosby, N. (2014). Property investment appraisal. John Wiley & Sons.

Elmassri, M. M., Harris, E. P., & Carter, D. B. (2016). Accounting for strategic investment decision-making under extreme uncertainty. The British Accounting Review, 48(2), 151-168.

Gotze, U., Northcott, D., & Schuster, P. (2016). Investment Appraisal. Springer-Verlag Berlin AN.