Fluent Essays

Please note that this is part one of a 4-part assignment and I would like you to eventually complete all 4 parts as long as you provide A quality work. I am flexible on the time-frame of completion as well if you need more time to produce quality work. I will give you now the guidelines for all 4 parts because you must ensure that in the future you will be able to complete all sections of the assignment with the company that you choose. Below I have the class textbook listed which you must have access to: Melicher, R. W., & Norton, E. A. (2017). Introduction to finance: Markets, investments, and financial management (16th ed.) [VitalSource Bookshelf version]. Hoboken, NJ: Wiley. Retrieved from https://online.vitalsource.com/#/books/97811193211...I have also attached the study guide for this unit.The below instructions are for part one of the project:Research Paper: Part IIn Unit VII of this course, you will submit a final paper on a publicly traded company of your choice. You will complete this paper over several units in this course. For this assignment, you will be completing the first part of this project. It would be a good idea to read all of the milestones of this assignment in the units that follow to ensure that the company you choose has sufficient information to complete the project. For this first assignment, follow the instructions below.Select the company you will be researching for your paper. Compose a brief paper that gives an overview of your company. Your summary should include the following: the type of firm, the banking structure of the firm in terms of current and past investments, what industry it is in, and any relevant history or background information. Make sure to also incorporate how the firm currently structures its capital by identifying banking relationships.Your paper must be at least two pages in length, and you must use at least two academic sources. Any information from a source must be cited and referenced in APA format, and your paper must be formatted in accordance to APA style guidelines.***The rest of these instructions will be for the future ongoing assignments. IMPORTANT: the company you choose MUST have easy access to all the below information for these future assignments.***Research Paper: Part IIIn Unit II, you began working on your research paper that will be due in Unit VII of this course. In this unit, you will continue researching the company that you selected for your paper. For this assignment, evaluate the following items in relation to your chosen company:Which stock market exchange is the company listed on?Look at the past three years’ worth of stock activity for your company.What is the average stock price during that period?What was the high/low price?Has the company ever initiated a stock split?How many shares of stock are outstanding? Authorized? Issued?Would you invest in this company based on what you have evaluated? Why, or why not?Compare this company’s stock to another company within the same industry. How does the stock compare in terms of price and activity? Explain.Your paper must be at least two pages in length, and you must use at least two sources. Please adhere to APA Style when creating citations and references for these sources.Research Paper: Part IIIFor this assignment, you will continue researching your chosen company. Compose a paper on the financials of your chosen firm; you will choose two ratios from each category (liquidity, profitability, and solvency) and conduct an analysis as well as highlight key areas/trends of the income statement and balance sheet. Be sure to answer the following questions in your response:What do the ratios reflect?Does the company appear healthy and headed in the right direction? Explain.How does the company compare to another firm in the same industry in regards to financial metrics (for instance, a comparison of Target versus Walmart based on the basic ratio categories mentioned above)?Your paper must be at least two pages in length, and you must use at least two sources. Please adhere to APA style when creating citations and references for these sources.Final Research PaperThroughout this course, you have been working on your research paper on a company you have chosen. For this assignment, you will consolidate the parts of the assignment you wrote in Units II, V, and VI. In addition, you will add a new section that comprises content you have learned in this unit.First, combine Parts I-III of your paper. Be sure to make any changes necessary based on feedback you have received. Make sure that you include an introduction and transitions so that these three parts read as one cohesive document.Then, you will need to examine your firm’s working capital management. Look at the firm’s annual report and answer the following questions:What is the firm’s cash position? Does the firm reflect positive cash balances for the last three years?What methods does the firm use to ensure and maintain positive cash flows?What methods of short-term financing does the firm use?Conclude your paper with a final recommendation about whether or not this company would be a good investment for potential investors. Your finished paper must be a minimum of seven pages long, and you must use at least five sources (most of which were likely used in other units). At least one source must come from the CSU Online Library. Any information from those sources must be cited and referenced in APA format and you should format your paper in accordance to APA guidelines. unit_ii_study_guide.pdf Unformatted Attachment Preview UNIT II STUDY GUIDE The Banks and the Federal Reserve Course Learning Outcomes for Unit II Upon completion of this unit, students should be able to: 1. Explain foundational finance theories. 1.1 Explore the financial aspects of a chosen company. 1.2 Discuss the structure of a company’s capital in relation to its banking relationships. 2. Analyze a financial forecast using relevant data. 2.1 Examine how the banking structure of a company affects current and past investments. Course/Unit Learning Outcomes 1.1 1.2 2.1 Learning Activity Unit Lesson Chapter 3 Chapter 4 Unit II Scholarly Activity Unit Lesson Chapter 3 Unit II Scholarly Activity Unit Lesson Chapter 3 Unit II Scholarly Activity Required Unit Resources Chapter 3: Banks and Other Financial Institutions Chapter 4: Federal Reserve System Unit Lesson In Unit II, we will focus on the banking environment and Federal Reserve System as well as the overall money supply. Each of us is affected in some way by the policies implemented by the Federal Reserve. This unit lesson looks at how the money supply is impacted by the Federal Reserve and its ability to regulate the markets as well as the structure of various banking institutions. BBA 3301, Financial Management 1 The Federal Reserve UNIT x STUDY GUIDE Title There are several government agencies that regulate our nation’s financial activities. The Federal Reserve System (also known as “the Fed”), the country’s central bank, plays a major role in our economy. Founded by Congress in 1913, the Fed works to provide the country with a more stable financial and monetary system. While the Fed is involved in many areas, it is focused mainly on maintaining an adequate money supply. It realizes this by influencing interest rates, borrowing, and the buying and selling of government securities. The Fed tries to make adequate funds available for consumer spending and business expansion while keeping interest rates and consumer prices in check. The Federal Reserve building in Washington, D.C. While the Fed does play a major role in managing the money supply, it also oversees other financial institutions. In other words, it makes sure that banks comply with federal laws so consumers are treated fairly and consistently. Most importantly, the Fed insures the money that individuals deposit into financial institutions, so they can recover any losses if the bank fails and/or closes. By backing the banks and other institutions, the Fed enables consumers to trust the places in which they deposit and invest their money. Without such support, the economy would be unstable and there would be an ever-growing fear within our own economy. (Cupertino10, 2013) Banks and Other Financial Institutions In the United States and other developed countries, a set of efficient financial intermediaries has advanced. Their original roles were generally specific, and regulation prevented them from diversifying. However, in recent years, regulations against diversification have been largely removed; today, the differences between institutions have been blurred. In general, the banking system has five major functions:      accepting deposits, granting loans, issuing checkable deposit accounts, clearing checks, and creating deposit money (Akrani, 2011). Still, there remains a degree of institutional identity. Therefore, it is useful to understand the major categories of financial institutions. Let’s examine the different categories of financial institutions in more detail. Investment Banks When we consider the variety of financial institutions, we must look at how they compare in terms of purpose. The investment banks, for instance, tend to help companies get funding they need. What do these financial institutions really do? They help corporations design attractive securities, then they buy the securities and sell them to other entities. Investment banks are also called underwriters because they guarantee that a company will have the money needed for a project or investment. The recent credit crisis has had a dramatic effect on the investment banking industry. For instance, Lehman Brothers eventually went bankrupt, and Merrill Lynch was forced to sell out to Bank of America (BoA). The two remaining major investment banks received Federal Reserve approval to become commercial bank holding companies. These banks are typically part of financial services corporations. BBA 3301, Financial Management 2 Commercial Banks UNIT x STUDY GUIDE Title Commercial banks include those such as BoA, Citibank, and JPMorgan Chase. These are traditional retailers of finance because they have many different types of savers and borrowers that they service. These banks have typically been the main organizations through which individuals have checking accounts. In addition, the Federal Reserve uses these banks to change the money supply. However, presently, there are other institutions that serve these purposes as well. These financial service corporations are usually big conglomerations that are the combination of many different financial institutions. Most financial services corporations started in one area but now have diversified to cover most of the financial spectrum. For instance, Citigroup owns Citibank, an investment bank, a securities brokerage organization, insurance companies, and leasing companies. Other Types of Banks What about some of the other types of institutions? Credit unions are one example; these institutions have members who share a common bond such as working in the same company or being in the same industry. The savings of the credit union members is used to make loans to other members for things like purchasing automobiles or homes. Many times, credit unions are the cheapest way for borrowers to receive these funds. Pension funds get contributions from employees, and the employer invests these contributions in different areas (usually bonds, stocks, or real estate). The proceeds of these accounts go into a retirement fund for the employee (Melicher & Norton, 2017). Life insurance companies are another institution. These companies use customers’ annual premiums and invest them in stocks, bonds, real estate, and other investments. They then pay the insured parties’ beneficiaries. Recently, these companies have started to offer tax-deferred savings plans as a benefit to their customers. Another type of financial market includes mutual funds, which is when money from savers is taken and used to buy stocks, bonds, or short-term debt instruments from businesses or government agencies. Mutual funds reduce risk through diversification because they pool funds (Melicher & Norton, 2017). There are many benefits to mutual funds. (Vaeenma, n.d.) A new and exciting type of institution is ETFs (exchange traded funds); these are much like regular mutual funds and are many times managed by mutual fund companies. ETFs buy a portfolio of particular types of stocks, for instance, the S&P 500 or media companies, and then sell shares. ETF shares are usually traded in public markets, so investors can buy shares in ETFs that have stocks in a particular market that is of interest to them. What about hedge funds? These are similar to mutual funds because they take money from clients and use the funding. There are several important differences, though. One is that hedge funds are pretty much unregulated, which is different than mutual funds, which are regulated by the Securities and Exchange Commission (SEC). This regulatory difference is because mutual funds deal with small investors while hedge funds usually have large minimum investments, many times well over a million dollars. Institutions and individuals with high net worth are the target market of hedge funds. BBA 3301, Financial Management 3 Further, hedge funds got their name because they UNIT x STUDY GUIDE were general usedTitle for people who were trying to “hedge” risk. For instance, a hedge fund manager who believes that interest rate differentials between corporate and Treasury bonds are too large might simultaneously buy a portfolio of corporate bonds and sell a portfolio of Treasury bonds. In this case, the portfolio would be “hedge” against overall movements in interest rates, but it would perform especially well if the spread between these securities became smaller. Keep in mind that some hedge funds are much riskier than average stocks or mutual funds. For instance, in 1998, Long-Term Capital Management (LTCM), a high-profile hedge fund, Hedge funds are another way to invest, but they can carry more made incorrect assumptions and spiraled out of risk than other investments. control (Yang, 2014). LTCM had many billions of (8vfand, n.d.) dollars under management, and it owed large amounts of money to a number of banks. To avert a worldwide crisis, the Federal Reserve orchestrated a buyout of the firm with a group of upstate banks. Finally, private equity companies are entities that are similar to hedge funds, but they buy and manage entire firms instead of buying some stocks of a firm. Most of the money used to buy the largest companies is loaned out. While private equity activity slowed around the financial crisis, over the past decade, a number of prestigious companies have been acquired by private equity firms. In 2013, two major deals were announced; Berkshire Hathaway partnered with the private equity firm 3G Capital to purchase the Heinz Company, and, around the same time, Dell Computer announced plans to go private with the assistance of the private equity firm, Silver Lake Partners (Goldman, 2013). Some criticized these deals for not offering enough payment to the existing shareholders, and there was a possibility that another private equity firm or outside investor will make a competing offer (Edwards, 1999). Most financial institutions (except for hedge funds and private equity companies) are regulated to protect the investors and also ensure the safety of the institutions. Some examples of those regulations include:     an exclusion on nationwide branch banking, limitations on the types of assets the institutions could purchase, upper limits on the interest rates they could pay, and restrictions on the types of services they could provide. These regulations tended to hinder the free flow of capital and, consequently, hurt the efficiency of the capital markets. Distinguishing this fact, policy makers took several steps during the 1980s and 1990s to deregulate financial services companies. Many believed that excessive deregulation and inadequate supervision of the financial sector was partially responsible for the major financial crisis of 2008. With those concerns in mind, Congress passed the DoddFrank Act in 2010. The legislation’s main goals were to create a new agency for consumer protection, work to increase the transparency of certain transactions, and force financial institutions to take steps to limit excessive risk-taking and to hold more capital (Maxfield, 2017). In summary, the financial institutions all play a role in how or financial markets perform. With so many options available to investors and consumers, the financial markets will continue to excel and expand in terms of value and sheer volume. Diversification is key during such times of expansive growth and success. As technology starts to play a bigger role in the way we invest, we will start to see more of its influence. Electronic communications networks (ECNs) use technology to bring buyers and sellers together. In fact, the sudden interest in ECNs accelerated the move toward 24-hour trading. U.S. investors who wanted to trade after the U.S. markets closed could utilize an ECN, thereby bypassing the NYSE and NASDAQ. Such BBA 3301, Financial Management 4 changes within the industry illustrate the growing importance of global trading.UNIT Is it possible that floor traders x STUDY GUIDE and other physical exchanges may be a thing of the past? Only time can tell. Title References 8vfand. (n.d.). ID 92954489 [Image]. Retrieved from https://www.dreamstime.com/stock-photo-hedge-fundsshown-businessman-concept-image92954489 Akrani, G. (2011). Functions of banks – Important banking functions and services. Retrieved from http://kalyan-city.blogspot.com/2011/04/functions-of-banks-important-banking.html Cupertino10. (2013). ID 32019219 [Photograph]. Retrieved from https://www.dreamstime.com/royalty-freestock-images-federal-reserve-building-washington-dc-image32019219 Edwards, F. R. (1999). Hedge funds and the collapse of long-term capital management. The Journal of Economic Perspectives, (13)2. 189-210. Goldman, D. (2013). Dell plans to take company private. Retrieved from https://money.cnn.com/2013/02/05/technology/enterprise/dell-lbo/index.html Maxfield, J. (2017). The Dodd-Frank Act explained. Retrieved from https://www.fool.com/investing/2017/02/03/the-dodd-frank-act-explained.aspx Melicher, R. W., & Norton, E. A. (2017). Introduction to finance: Markets, investments, and financial management (16th ed.) [VitalSource Bookshelf Version]. Retrieved from https://online.vitalsource.com/#/books/9781119321118 Vaeenma. (n.d.). ID 130566544 [Image]. Retrieved from https://www.dreamstime.com/why-mutual-fundimage130566544 Yang, S. (2014). The epic story of how a genius hedge fund almost caused a global financial meltdown. Retrieved from https://www.businessinsider.com/the-fall-of-long-term-capital-management-2014-7 Suggested Unit Resources The following chapter from your textbook is not necessary to complete the unit, but it does offer great information about how policy affects the money supply. Chapter 5: Policy Makers and the Money Supply In order to access the following resources, click the links below. The short video below explores the concept of interest as the price of money. It looks at money from a supply and demand perspective. Khan Academy. (2012, Februrary 29). Interest as rent for money [Video file]. Retrieved from https://www.youtube.com/watch?v=Lru0vKmkzR8 If you are interested in learning more about the Federal Reserve, the video below is a great resource. It explores the fundamentals of this institution. Degan, M., Jeneski, L., Degan, P. (Executive Producers), Freiberger, F. (Producer), & Hardewicke, C. (Director). (2014). We the economy: Fed head - What is the Federal Reserve? [Video file] . Retrieved from https://libraryresources.columbiasouthern.edu/login?auth=CAS&url=http://fod.infobase.com/PortalPla ylists.aspx?wID=273866&xtid=60803 BBA 3301, Financial Management 5 The transcript for this video can be found by clicking on “Transcript” in the grayUNIT bar at the top of the video in x STUDY GUIDE the Films on Demand database. Title Learning Activities (Nongraded) Nongraded Learning Activities are provided to aid students in their course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information. How well do you know the unit material? Take the Unit II Knowledge Check Quiz to find out! BBA 3301, Financial Management 6 ... Purchase answer to see full attachment