MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health
3-1 Financial Performance and Health of Whole Foods Market Inc.
FINANCIAL PEFORMANCE AND HEALTH OF WHOLE FOODS MARKET, INC.
(WFM)
MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health
2
A. Organizational Context of Whole Foods Market, Inc.
Whole Foods Market, Inc. (WFM) is an American supermarket chain specializing in
natural and organic foods. It first opened on September 20, 1980 in Austin, Texas where it is
currently headquartered. Whole Foods is the leading retailer of natural and organic foods, and the
nation’s first “Certified Organic” grocer. It has one operating segment, that is, the natural and
organic foods supermarkets and operates 431 stores in the United States, Canada and United
Kingdom. The company mainly specializes in the retail of natural and organic foods, targeting
consumers who are looking for fresh, natural and healthy food choices. Its product offerings are
divided into two categories namely perishable and non-perishables (Hellman, 2014).
Some key features of WFM’s organization which help set the boundaries for its business
decisions include the specialization in organic and natural foods, the marketing focus on higher
income households, and the original placing of stores in higher income areas. Whole Foods
originally targeted upper and upper middle class households with their premium priced organic
products. Whole Foods Market Inc. is organized and managed based on the geographical regions
of its prime locations, business function as well as products. The company is organized on a
four-tier hierarchy namely the global headquarters, regional offices, facilities and stores and its
stores are organized around 12 geographic divisions. Accounting and financial information is
always prepared by consolidating the results of operations from all the comparable stores across
the geographic regions. Business decisions are made with regards to the four levels of the
company’s organizational structure as well as based on the factors affecting the 12 geographic
divisions of the company (Whole Foods Market Inc. - AnnualReports.com, 2016).
B. Recent Financial Performance
MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health
3
The financial performance of Whole Foods market Inc. will be analyzed by assessing the main
consolidated financial statements of the company for the past three years.
Consolidated Income Statements
As seen in Appendix 1, the company’s revenue amounts are favorable as per the industry
standards and are increasing each year meaning that revenues are growing. The company’s
operating income increased from 2013 to 2014 but showed a slight decrease in 2015 and the
same trend is seen in the net income (Bloomberg.com., 2016). Generally, the company managed
to maintain its level of operations for the past three years. Its Earnings Before Interest, Taxes,
Depreciation and Amortization has steadily increased over the years and the adjusted figures
show that the company is financially healthy as it is able to generate sufficient amounts of profits
from its operations.
The graph below shows the movement in the key ratios of the income statements
Trend in the Income Statement Ratios
70
60
50
40
30
20
10
0
2013
Gross profit margin
Operating profit margin
2014
2015
Net profit margin
EPS
The gross profit shows some slight improvement over the years but the operating profit
and net profit margin have consistently decreased over the past three years. The EPS was
MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health
4
favorable from 2013 to 2014 but dropped again to unfavorable level in 2015. This shows that
Whole Foods Market Inc. is not consistent in generating earnings from its operations
(Bloomberg.com., 2016).
One item that has stood out in the consolidated income is revenues. The company has
been consistent in growing its revenues over the years and this is a good indication of a healthy
business.
Consolidated Cash Flow Statements
From the summary of the consolidated cash flow statements of Whole Foods Market Inc.
in appendix 2, it can be seen that the company has recorded relatively strong and positive net
cash flows from operating activities, with the amounts increasing over the years, which is a good
sign of a healthy company. The movement of cash from investing activities indicate that the
company has increased the amount of cash it invests in current and fixed assets. The amounts are
neither too high nor too low which means that Whole Foods Market is a generally healthy
company as it has shown a remarkable improvement in its investment activities although 2015
recorded a slight drop in cashflows from investing activities. The cash flows from financing
activities increased in 2014 but the amount dropped in 2015. Generally, the amounts for each
year show that the company borrows funds to finance its activities in moderate amounts meaning
that it does not solely depend on debts to finance its operations. The total cash flows from all the
activities of the company over the three years are positive although the amounts are not very
strong but this is an indication that the company generates sufficient amount of funds to cover it
expenses in the near term. The cash flows from operating activities stand out and this is an
indication that the company is generating more cash from the sales of its products and services.
In addition, the amount of cash from operating activities for the three years are higher the
MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health
5
company’s net income for the same years, the figures are almost double that of the net income
and this indicates that Whole Foods Market is a healthy company
(Investor.wholefoodsmarket.com., 2016).
The organization’s underlying financial performance is not favorable as the analysis
show inconsistent results over the recent years. The inconsistencies in the company’ performance
especially in relation to the operating profits and net income is attributed to disparities in
comparable store sales as well as the stores that were opened or acquired less than one fiscal
year. There is also an ongoing value strategy being undertaken by the company to improve its
product offerings and value to customers and this explains the fluctuations in the financial
performance across the years. Generally, the business is still struggling in its industry because
from the analysis of its financial statements, the company has recorded mixed performances,
with some areas showing more strength and others indicating some weaknesses (Shearn, 2012).
Current Financial Statements
Whole Foods Market Inc. is capitalized on a mixture of debt, equity as well as assets.
This proportionate mix in the company’s capital structure shows that it is a healthy company.
The ratio of its total debt to capital and total debt to equity as seen in appendix 3 is almost the
same, meaning that the company uses a fair mix of debt and equity to obtain capital for its
operations. The company has a current ratio of 1.23 meaning that it is able to pay off its current
liabilities using its current assets. The company has enough cash to cover all the current
obligations (Shearn, 2012).
The graph below shows the overall capital structure of the company;
MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health
6
Capital Structure of Whole Foods
Market Inc.
LONG-TERM DEBT TO TOTAL CAPITAL
1.62
LONG-TERM DEBT TO EQUITY
1.64
TOTAL DEBT TO TOTAL ASSETS
1.13
TOTAL DEBT TO TOTAL CAPITAL
1.7
TOTAL DEBT TO TOTAL EQUITY
1.72
0
0.5
1
1.5
2
In addition, the company has the right amount of cash, key personnel, reputation and
physical assets to fuel future growth and if it has too much cash, its business decisions should be
focused on reinvesting the excess funds so as to generate more cash flows.
The current market value of the company is 10.19B and has a Price-To-Earnings ratio of
19.97 and these values suggests to an investor that the business is bound to grow in increase its
value in future and there a worthy choice of investment (Whole Foods Market Enterprise Value
(WFM), 2016).
MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health
7
References
Bloomberg.com., (2016). WFM: NASDAQ GS Stock Quote - Whole Foods Market Inc.
Bloomberg.com. Retrieved 19 November 2016, from
https://www.bloomberg.com/quote/WFM:US
Hellman, J. (2014). Whole Foods Market: A Short SWOT Analysis. Value Line. Retrieved from
http://www.valueline.com/Stocks/Highlights/Whole_Foods_Market__A_Short_SWOT_
Analysis.aspx#.VVjmu9HbKM8
Investor.wholefoodsmarket.com., (2016). Whole Foods Market, Inc. - Whole Foods Market
Reports Fourth Quarter and Fiscal Year 2016 Results. Investor.wholefoodsmarket.com.
Retrieved 19 November 2016, from
http://investor.wholefoodsmarket.com/investors/press-releases/press-releasedetails/2016/Whole-Foods-Market-Reports-Fourth-Quarter-and-Fiscal-Year-2016Results/default.aspx
Shearn, M. (2012). The investment checklist: The art of in-depth research. Hoboken, NJ: Wiley.
Whole Foods Market Enterprise Value (WFM). (2016). Ycharts.com. Retrieved 19 November
2016, from https://ycharts.com/companies/WFM/enterprise_value
Whole Foods Market Inc. - AnnualReports.com. (2016). Annualreports.com. Retrieved 19
November 2016, from http://www.annualreports.com/Company/whole-foods-market-inc
MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health
8
Malcolm, H. (2015, May 7). Whole Foods to open chain for Millennials. USA TODAY.
Retrieved from http://www.usatoday.com/story/money/2015/05/07/whole-foods-cheapermillennial-chain/70934302/
MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health
Appendix 1: Consolidated Income Statement Ratios
Gross profit margin
Operating profit margin
Net profit margin
EPS
2013
64.16
6.48
4.27
1.47
2014
64.46
6.58
4.08
1.56
2015
64.81
5.59
3.48
1.48
Appendix 2: Summary of the consolidated cash flows
2013
2014
2015
$1,009
$1,088
$1,129
-289
-484
-455
activities
-517
-698
-622
Total cash flows
$290
$190
$237
Net Cash flows from operating
activities
Net cash flows from investing
activities
Net cash flows from financing
9
MBA 520 Accounting and Financial Analysis 16TW1, 3-1 Financial Performance and Health 10
Appendix 3: Capital Structure of Whole Foods Market Inc.
Total Debt to Total Equity
Total Debt to Total Capital
Total Debt to Total Assets
Long-Term Debt to Equity
Long-Term Debt to Total Capital
1.72
1.70
1.13
1.64
1.62
MBA 520 Acctng. and Financial Analysis 16TW1, 5-1 Success Factors, Risk, and Projections
5-1 Final Project Milestone Two: Success Factors, Risk, and Projections
MBA 520 Acctng. and Financial Analysis 16TW1, 5-1 Success Factors, Risk, and Projections
2
SUCCESS, RISK FACTORS AND PROJECTIONS FOR WHOLE FOODS
MARKET INC.
Introduction
From the analysis of the financial health of Whole Foods Market Inc., it was evident that
the company has a healthy financial performance. However, there are various factors that may
impact either negatively or positively on the current and future performance of the company. The
aim of this paper is to examine the success factors and well as the risks that may affect the
performance of the company and make projections on the company’s future performance.
SUCCESS FACTORS AND RISKS
a. Success factors: Priorities
The first strategic priority of Whole Foods Market Inc. is unit development. The
company is striving to open new stores and this year alone, whole Foods has opened 38 new
stores and is set to reach a target of 500 stores in 2017. This is so because retail innovation is a
key success factor that has seen the company gaining more market share. With new stores, the
company will have more comparable stores to account for and an increase in the number of
financial statements to be consolidated at the end of every quarter and fiscal year. Another
strategic priority is refreshing of the older stores. Remodeled stores have seen the company
experiencing an overall boost in comps hence more results of operations (Whole Foods Market Inc.
- AnnualReports.com, 2016).
Value strategy is an ongoing strategic initiative taken by Whole Foods and has become a
success factor in driving sales growth for the company. Whole Foods has been implementing
competitive price match on many if its product items at the national level in order to narrow the
price gaps on popular value items so as to attract more customers and increase sales. The effect
MBA 520 Acctng. and Financial Analysis 16TW1, 5-1 Success Factors, Risk, and Projections
3
of this strategic priority on business decisions is that management has to broaden the selection of
the company’s products at entry-level price points as well as increase promotional activities in
order to increase sales revenues (Hellman, J. (2014).
Whole Foods Market Inc. is also focusing on digital initiatives to drive customer
engagement inn its stores. The company has entered into strategic partnerships with other
companies through acquisitions of smaller chains to offer home delivery and customer pickup
services in major markets as well introduce an online subscription club. This strategy is expected
to increase the sales revenues (Whole Foods Market Inc. - AnnualReports.com, 2016).
The management of Whole Foods Market is growth-oriented as the company is focused
more on opening new stores and signing leases while pursuing acquisitions of smaller chains and
relocating in international markets to expand its operations. The organization’s approach to risk
is through aversion and minimization. The company has put in place strategies to avoid any risk
could have material effect on the results of its operations in the long-term planning horizons and
minimize where possible the impact of such risks in the short-term planning horizons (Malcolm,
2015)
Success Factors: Non-Financial Factors
There are various non-financial factors that are a critical to the success of Whole Foods
such as market share, human resources, patents, reputation as well as physical facilities. The
company can capitalize on market share by penetrating in new markets and promoting its
products aggressively in its existing major markets. Whole Foods can also capitalize on its
reputation by opening new stores and penetrating new markets so as to acquire more customers,
gain market share and increase its revenues. Human resources can be capitalized by utilizing the
MBA 520 Acctng. and Financial Analysis 16TW1, 5-1 Success Factors, Risk, and Projections
4
competencies of expert employees to increase productivity and brain-storm new products and
ideas for generating more business returns. The company should hire competent personnel, train
and develop them so as to increase their productivity. For the patents, the company should ensure
that it obtains copyrights for its patents to avoid duplication and it can also sell outright or
license to other parties in different geographical areas to expand its market share. It can also use
patents to charge higher prices for its patented goods and reduce competition (Whole Foods
Market Inc. - AnnualReports.com, 2016).
Success factors: Risks
1. The most significant internal risks to the company’s financial performance include breach
of information security and regulations that can lead to litigations and poor reputation
hence withdrawal of customers and partners which in turn can lead to financial losses.
Loss of key management personnel and inability to recruit and retain competent and
qualified team members can lead to loss of goodwill and overall productivity (Whole
Foods Market Inc. - AnnualReports.com, 2016).
Indebtedness. In 2015, the company entered into a new credit facility that provides for
unsecured revolving credit facility amounting to $500 million that has the potential of
increasing from time to time thus presenting a risk of high interest expense in future that
can eat into profits.
The company’s internal control system may fail to detect or prevent misstatements which
may lower the degree of compliance with policies and procedures that could result to data
breaches and litigations that can lead to serious financial losses.
2. The company is vulnerable to technological changes such as automated inventory
management in retailing that could render its machines obsolete as well as increase in
cyber-attacks that can lead to huge data breaches and financial implications. Seasonality
in productions can disrupt supplies of fresh produce and lower sales especially during
summer (Whole Foods Market Inc. - AnnualReports.com, 2016).
MBA 520 Acctng. and Financial Analysis 16TW1, 5-1 Success Factors, Risk, and Projections
5
PROJECTIONS
Likely Performance
The performance of the company is likely to improve in the coming years. Based on the
past and current results, it is clear that Whole Foods has been improving on its performance and
if the trend continues, the company is likely to achieve a net income of $2,132 million by 2019
compared to current figure of $507 million, with total consolidated revenues increasing from
$15, 724 million to $17, 516 million according to the projections in appendix 1. This is in line
with the company’s goal of opening new stores each year to increase revenues.
Best and Worst Case Scenarios
Best Case Scenario
It is assumed that the company will grow its revenues by 4% over the next year. In the best-case
scenario, the projections from appendix 2 show that the company will be able to grow its
revenues by 8%, from $15,724 to $16,981 totaling to an average of $1,257 million.
Worst Case Scenario
In the worst-case scenario, the company will only manage to grow its revenues by 2%, that is
from $15,724 to $16,038, totaling to an increase of $314 million only.
Discussion
My projections are appropriate because the forecasting methodology I used was based on
the trends in performance over the past 3 years, which have been showing a consistent
improvement. The projections therefore are a reflection of future performances if the same trend
continues. The projections were based on the assumption that the company will increase its sales
by 4%. This was in line with the projection by the company’ management who forecasted an
MBA 520 Acctng. and Financial Analysis 16TW1, 5-1 Success Factors, Risk, and Projections
6
increase in sales of between 2.5% to 4.5% in their 2017 outlook. My assumption and forecasting
methodology are aggressive but achievable because they within the results foreseen by the
management and in line with their strategic priorities. An increase in the value of my
assumptions will increase my projections while a decrease in the value of my assumptions will
decrease my projected figures.
Conclusion
From the analysis of the success factors, risks and projections, it is evident that Whole
Foods Market has a chance of experiencing a healthy financial performance if it continues to
exhibit the same upward growth trend and to capitalize on its success factors while reducing and
mitigating the risks posing a threat to its financial performance.
MBA 520 Acctng. and Financial Analysis 16TW1, 5-1 Success Factors, Risk, and Projections
7
References
Hellman, J. (2014). Whole Foods Market: A Short SWOT Analysis. Value Line. Retrieved from
http://www.valueline.com/Stocks/Highlights/Whole_Foods_Market__A_Short_SWOT_Analysis.
aspx#.VVjmu9HbKM8
Whole Foods Market Inc. - AnnualReports.com. (2016). Annualreports.com. Retrieved 19 November
2016, from http://www.annualreports.com/Company/whole-foods-market-inc
Malcolm, H. (2015, May 7). Whole Foods to open chain for Millennials. USA TODAY. Retrieved from
http://www.usatoday.com/story/money/2015/05/07/whole-foods-cheaper-millennialchain/70934302/
MBA 520 Acctng. and Financial Analysis 16TW1, 5-1 Success Factors, Risk, and Projections
Appendix 1
Projections for the Consolidated Income Statement for the year Whole Foods Market Inc.
Total revenue
Cost of revenue
Gross profit
Operating Expenses:
Research and
development
Sales, General and Admin
Non-Recurring items
Other operating items
Operating
Income
Add Income/ expense
items
Earnings Before Interest and Tax
Interest expense
Earnings Before Tax
Income tax
Minority interest
Equity earnings
Net Income
Current Future Projections (in
Year
Millions
2016
2017
2018
2019
$15,724 $16,352 16,762 $17,516
10,313 10,400 10,420 10,500
5,411
5,952 6,342
7,016
0
4,477
77
0
0
4,480
75
0
0
4,482
70
0
0
4,490
68
0
857
1,397
1,790
2,458
11
868
41
827
320
0
0
12
1,409
0
1,409
280
0
0
10
1,800
0
1,800
300
0
0
14
2,472
0
2,472
340
0
0
$1,129 $1,500
$2,132
$507
8
MBA 520 Acctng. and Financial Analysis 16TW1, 5-1 Success Factors, Risk, and Projections
Appendix 2
Scenario Summary
Changing
Cells:
$I$5
$I$21
Result Cells:
$A$5
$B$5
$C$5
$D$5
$E$5
$F$5
$G$5
$H$5
Current Values:
Best
Case
Worst Case
5%
30%
8%
50%
2%
20%
Total revenue
Total
revenue
Total
revenue
$15,724
$16,195
16,762
$17,516
$16,981
$17,660
18,102
$18,917
$16,038
$16,518
17,097
$17,866
9
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
7-1 Final Project Milestone Three: Business Opportunities
BUSSINESS OPPORTUNITIES FOR WHOLE FOODS MARKET INC.
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
2
Introduction
Whole Foods Market Inc is a supermarket chain in America that exclusively deals with
organic foods and is the first grocery outlet to be certified as an organic grocery under the
National Organic Standards. Despite it being a grocery store, it’s a Fortune 500 company with
revenues of US$ 15.7 billion as at September 30th, 2016 making it amongst the 30 largest
retailers in America. The company was started on September 20th, 1980 in Austin, Texas where
it still has its headquarters after the merger of two stores, Safer Way Natural Foods, and
Clarksville Natural Grocery. The founders were John Mackey, who is the current CEO, Walter
Robb former Co-CEO, Renee Lawson Hardy, Craig Weller and Mark Skiles. It started with a
staff base of 19 people but currently has 91,000 employees, with over 431 branches spread
across the U.K, Canada and its headquarters, USA.
Whole Foods prides itself on its high standards regarding the quality of products it sells
with one of their core value stating that they “sell the highest quality natural and organic
products available.” It exclusively deals with products that it certifies as being natural and
organic. It also sells products that are rated as being eco-friendly including some that have been
certified by the US Department of Agriculture. In order to give its customers full transparency
over the products they buy, they have collaborated with third party auditors and have employed
an in-house rating system which classifies the products it sells; from low to products of high
standards depending on the productions standards, sustainability of the product and other factors.
Whole Food Market Inc is considering investing in a facility that will add value to the
stakeholders of the company and remain true to the core value of the company
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
3
Investment Decision
Whole Foods Market Inc. has had its share of controversies with a modest research
revealing a plethora of class action suits, critics reviews, buyer, and lobbyist protest and
published books attacking the ‘false’ notion that it sells ‘natural’ foods. The National Director of
the Organic Consumer Association, Ronnie Cummins, has gone as far as publishing a book that
states that Whole Foods uses the label organic as a marketing gimmick (Cummins & Lilliston,
2004). Additionally, in her 2006 exposé titled the ‘Big-box swindle:The true cost of megaretailer,’ author Stacey Mitchell states that Whole Food has peddled a lie that it promotes local
foods. Besides, in 2004 the Attorney General of California filed a lawsuit against Whole Food
for the presence of high levels of carcinogens in its products dealing a huge blow to the repute of
the company as an organic campaigner.
In light of the controversies the company faces that are aimed at the core their essence
and the resultant plummeting stock value of Whole Food Market shares by over 45% from their
former highs to a recent 6% dip in 2016, stakeholders at the firm have become increasingly
alarmed. Analysts have insisted that the firm’s stock’s price-to-earnings are highly undervalued,
trading at 21 times instead of the historical rate of 30 times the expected earnings (Eule, 2016).
This, therefore, shows that at the center of the whores that plague Whole Food is the fall of
investor and client confidence. The company, therefore, has to invest extensively in ventures that
signal their intention to address the above issues of toxins in their products, being false
naturalists and importing products instead of promoting local suppliers. Hence, the proposal for
the construction of a green roof that is geared towards renewing stakeholder confidence, earning
the company increased profits and reducing overhead expenses.
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
4
Green Roofs
Also known as eco-roofs, living roof or horizontal vegetated complex partitions. Green
roofs are the urban solution to global warming, organic living, and environmental sustainability.
It is a roof that is covered by vegetation and can incorporate other green technologies such as
solar photovoltaic panels or wind turbines to increase the level of eco-consciousness accorded by
the roof. The benefits of green roofs are copious in that they not only offer a return on
investment but provide an opportunity for Whole Food to offer impactful social, environmental
and economic benefits to the cities where the roofs will be installed. Whole Food will, therefore,
invest in building green roofs that will have vegetation (greenhouses) at three of their stores
located in urban cities; Tribeca (New York), Bethesda (Washington) and Campbell (California).
Main Benefits of Green Roofs
Organic Food Production and Food Security
Green roofs have been noted to provide important benefits in terms of the production of
organic food produce. They are known to aid in providing the nutritional needs of the
communities that rely on them (Tomalty, et. al., 2010), a fact that is paramount for the project to
be of significance to Whole Foods. A researched by Tomalty, revealed that urban agriculture has
been found to provide city dwellers with a source of produce that is not only organic but one that
is also fresh.
Increased Product Perceived Quality
A level of confidence and pride is associated with produce farmed in greenhouses as their
source and production standards are observable and can be guaranteed. The current interest by
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
5
the mass media and the public on environmentally friendly products and services has been on a
rapid increase in North America (Tomalty, et. al., 2010). Although green roofs are yet to become
a common feature in the US they have become well established in Europe and Whole Foods
being a pioneer intends to establish their presence here.
Environmental Benefits
They have the ability to capture and store carbon dioxide (GHG sequestration); this is
because the vegetation planted on them absorbs gaseous pollutants through their leaf stomates
(Tomalty, et. al., 2010). The green roofs also reduce the heat island effect, a conundrum related
with the amassing of heat in urban areas. They also assist in retaining stormwater thereby
reducing peak flows into the storm water systems of urban areas.
Property Values and Infrastructure Benefits
Green infrastructure investments have been revealed to progressively influence the
property value and marketability of the real estate they are installed in (Carter & Keeler, 2008).
They also reduce the amount of energy that is consumed by the infrastructure by reducing the
temperature and heat loss during cold periods. They also are known to reduce electromagnetic
radiation, noise pollution, increase the building’s fire retardation and increase the roofing
membrane durability.
There is a multitude of other benefits that are associated with green roofs that can't all be
exhaustively covered. The current trend of the world in general and that of the majority of
consumers of Whole Foods is to lean towards a more eco-conscious view. This, therefore, makes
the investment not just a beneficiary one but a necessary one.
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
Monetary Benefits of the Green Roofs
Based on figures obtained from various public sources and other research papers the
following are the assumptions of the estimated benefits of the living roofs for the areas in which
they will be set-up.
S/N
o
FACTOR
BENEFICIARIES
BENEFITS
Whole Food Market
1 Property Value
Inc
4.5% Increase in property value
Whole Food Market
2 Productive Garden
Product Perceived
3 Quality
Inc
4.5% Increase in property value
Whole Food Market
11% Increase in perceived
Inc
quality
Whole Food Market
4 Food production
Inc
$20/m2 of growing month
5 Stormwater retention
Municipality & Region
$45.82/m2 per year
6 Air quality
Municipality & Region
$839/ha per year
7 GHG sequestration
Municipality & Region
$39/ha per year
Additionally, based on the estimates presented in the appendices and figures obtained
from Whole Foods financial statements, these are the estimated monetary benefits of the green
roofs.
Description
Unit
FY 16
Expected
Period Ended On (MM/DD/YYYY)
9/25/2016
YR 5
First Reported Date (MM/DD/YYYY)
11/18/2016
Change
$ Million
Sales
15,724
17,454
$ Million
Cost of goods sold and occupancy costs
10,313
9,694
6
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
$ Million
$ Million
$ Million
$ Actual
Gross profit
Selling, Operational and maintenance
expenses
Net income
Basic earnings per share
5,411
6,006
4,477
4,298
507
563
1.55
1.72
7
Cost Implications of the Green Roofs
The expenses that are to be incurred in the construction of the green roofs will vary for
the three locations but an average estimate has been chosen. The average cost of the project is
estimated to be around $3,740,000 and $11,220,000 for the entire project. This is based on the
fact that while an intensive green roof, similar to the one that will be set-up in the three locations
costs around $2,368/m2 ($220/ft2) with the average size of each roof being 17,000 Sq. Ft.
Effect of the Benefits and Cost on Projections
The Project offers a positive return after 6 years although it requires a huge initial capital
outlay. This means that the project is beneficial and should be implemented. Additionally, as
shown in the figures below, most of the benefits of such a project are not tangible but will have
ripple effects on the society and community such as the environmental benefits.
S/No
1
2
3
PARAMETER
Internal Rate of Return (IRR)
Payback, years
Return on Investment (ROI)
MEASURE
4.70%
6
209%
It is estimated that Whole Foods will require debt and equity financing in the portions of
30% to 70% respective, for the project to be implemented. This will mean that for the duration of
the debt, which is 10 years, the firm will be paying interest and refinancing the investor’s equity.
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
8
Additionally, expenditures for the firm will initially be high for the first year that the project will
be set-up until the eventual commissioning of the project which is expected to be done in the
next financial year. After that, minimal additional expenses are expected to be incurred with
savings expected to be made on energy usage for the buildings,
Investment Implications
Whole Foods will focus a huge portion of their cash flow to the realization of the green
roof projects meaning that initially there will be a huge but short term capital injection. Cash
flow will be prioritized to the projects until their successful completion in the subsequent year.
Following that, the successive year will involve less spending that will primarily focus on
overhead costs as the green roofs will still be in the developmental stage. Expenditure will,
however, go down in later years with savings being accrued as earlier mentioned.
The real estate value of the properties is also expected to go up by 4.5% after the 5th year
due to the benefits that are associated with green investments. This will be of benefit as the longterm asset value of the firm i.e. portfolio value will be marked up. This will increase the book
value of the firm. The company will also experience an increase in the perceived quality of its
products coupled by a jump in its stock price. This will mean greater earnings for both the
company and investors in general. Additionally, the produce from the green roofs will be sold at
the outlet and the earnings from those sales will be a boost in the overall revenue of the firm.
In conclusion, the firm should implement the green roof project in the three stores as the
benefits of the projects outweigh the costs that will be incurred. The high estimated return on
investment combined with the short payback period of the projects makes them worthy
investments. As initially stated the benefits of green roofs are copious in that they not only offer
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
a return on investment but provide an opportunity for Whole Foods to offer impactful social,
environmental and economic benefits to the cities where the roofs will be installed.
9
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
10
References
Carter, T., & Keeler, A. (2008). Life-cycle cost–benefit analysis of extensive vegetated roof
systems. Journal of environmental management, 87(3), 350-363.
Cummins, R., & Lilliston, B. (2004). Genetically engineered food: A self-defense guide for
consumers. Da Capo Press.
Eule, A. (2016). Why a Big Sustainable Investor is Buying Whole Foods. Retrieved from URL:
http://www.barrons.com/articles/why-a-big-sustainable-investor-is-buying-whole-foods1481304187?mod=yahoobarrons&ru=yahoo&yptr=yahoo
Mitchell, S. (2006). Big-box swindle: The true cost of mega-retailers and the fight for America's
independent businesses. Beacon Press.
Tomalty, R., Komorowski, B., & Doiron, D. (2010). The monetary value of the soft benefits of
green roofs. Canada Mortgage and Housing Corporation, Ottawa.
MBA 520 Accounting. and Financial Analysis 16TW1, 7-1 Business Opportunities
11
APPENDICES
PROJECTIONS
S/No
PARAMETER
MEASURE
1
Internal Rate of Return (IRR
4.70%
2
Payback, years
3
Return on Investment (ROI)
4
Debt Financing as % of Total Investment
30%
5
Equity Financing as % of Total Investment
70%
6
Interest on Debt
14%
7
Debt Term (Yrs)
10
8
Depreciation of green roofs
9
Corporate Tax
30%
11
COE
25%
12
COD
14%
13
WACC
14
Yr.1-Yr.5 Growth Rate of Earnings
3.1%
14
Yr.1-Yr.5 Growth Rate of Perceived Product Quality
5.0%
15
Initial Premium, $/ft2 of roof (extra cost of installing a green roof)
16
NPV of Installation, Replacement, & Maintenance, $/ft2 of roof
6
209%
5%
20.440%
($8.00)
($17.70)
NPV of Stormwater, $/ft2 of roof (savings from reduced infrastructure
17
improvements and/or stormwater fees)
18
NPV of Energy, $/ft2 of roof (energy savings from cooling & heating)
$10.20
$8.30
Net Present Value (installation, replacement & maintenance + stormwater +
19
energy NPV)
$0.70
20
NPV of CO2e, $/ft2 of roof (emissions, sequestration & absorption)
$2.90
21
NPV of Real Estate Effect, $/ft2 of roof (value, rent, absorption & vacancy)
$74.10
NPV of Community Benefits, $/ft2 of roof (biodiversity, air quality, heat
22
island, etc.)
$30.90
MBA 520 Final Project Guidelines and Rubric
Overview
Businesses and other organizations must regularly measure their financial performance and health in order to make operational and strategic decisions affecting
the organization’s future. Management professionals utilize income statements, balance sheets, cash flow statements, and a limitless variety of other reports and
techniques to evaluate an organization. They also work closely with professionals from departments across the organization—including marketing, human
resources, and operations—to ensure that the business runs smoothly and that financial decisions are not made in isolation.
For this project, you will use the accounting and finance skills you learned in the course to review the past and current financial performance and health of a
global, publicly traded company. Based on that analysis, you will create initial financial projections that forecast the company’s performance under different
scenarios and identify internal risks and opportunities in order to begin planning future activities.
This assessment addresses the following course outcomes:
Assess organizations’ underlying financial performance and health by analyzing relevant financial statements, variances, ratios, and other financial
information
Draw connections between accounting and financial information and the broader organizational context for making integrated business decisions
Assess critical factors driving financial risks and opportunities for informing management priorities
Forecast business performance under different assumptions about inputs and processes using simple financial models
Evaluate the internal costs and benefits of business opportunities for their impact on budgeting and business decisions
Communicate financial analyses clearly and coherently for persuading internal stakeholders of the validity of observations and conclusions
Prompt
Imagine you are a newly hired manager at a publicly traded, global corporation of your choosing. (Your instructor must approve your choice. You may also choose
a non-publicly traded organization, if your instructor verifies that the organization has sufficient financial information available to complete the project.)
You have been asked to review the company’s past and current financial performance and health and make initial financial projections in order to begin planning
for the upcoming year. Your supervisor is particularly interested in a fresh perspective on what your analysis reveals about potential risks and opportunities, as
well as recommendations for next steps. Because you will eventually need to convince internal stakeholders, including senior management, of the feasibility and
desirability of your suggested activities, it is important that you justify your projections and recommendations, explaining how they were informed by existing
information and modeling different scenarios.
Your financial analysis and projection report will include several financial tables, along with a comprehensive narrative describing the organization’s context,
financial performance and health, and your analytical approach and conclusions. Your report should be geared toward an executive audience with basic
accounting and finance knowledge and should be well organized, clear, concise, convincing, and free of distracting errors. Note that, in addition to the
organization’s financial statements and website, other authoritative news sources—such as annual reports and external sites like Bloomberg.com—may offer
insights that facilitate analysis or provide information on the organization’s priorities, challenges, and geographic distribution.
Specifically, your financial analysis and projection report must include the following critical elements:
I.
Executive Summary. Clearly and concisely summarize your principal findings, projections, and recommendations with an eye to persuading busy executives
to support your ideas and to read further.
II.
Approach. Provide your intended audience with a solid, but brief, sense of the parameters of your analysis and who else you would consult in refining it
further and why. Remember, your goal is to convince readers of the validity of your observations, while recognizing limitations that affect business
decisions.
III.
Financial Performance and Health. In this section, you will evaluate the organization’s recent financial performance and current financial health, given its
organizational context. In particular, you must cover:
A. Organizational Context
1. What key features of the organization (e.g., major products or services, customers, location, etc.) help set the boundaries for business
decisions? In other words, what key goods or services does your organization provide, for whom, where, and why?
2. How is the company organized and managed (e.g., by product groups, geographic region, function, etc.)? How does that affect
accounting and financial information and subsequent business decisions?
B. Recent Financial Performance
1. Assess what the organization’s consolidated income statements for the last three years say about its financial performance. Use relevant
indicators, graphs, and spreadsheets to support your narrative. (Include all spreadsheets in an appendix.) For example, what do the
amounts and year-to-year changes in revenue, operating income, net profit or loss, and Earnings Before Interest, Taxes, Depreciation,
and Amortization tell you? Do any items stand out?
2. Assess what the organization’s consolidated cash flow statements for the same time period say about its financial performance. Use
relevant indicators, graphs, and spreadsheets to support your narrative. For example, what do the amounts and year-to-year changes in
cash from operating activities, cash from investing, cash from financing, and total cash flow tell you? Do any items stand out?
3. Assess the organization’s underlying financial performance. Support your answer with the analysis above and relevant research. For
example, is recent performance substantially affected by unusual events such as a major acquisition or spin-off? Is the business thriving
or struggling in its industry? How do you know?
C. Current Financial Health
1. Assess how the organization is capitalized and what that tells you about its financial health. Support your response with relevant graphs,
spreadsheets, and indicators such as “cash and cash equivalents,” total debt, shareholders’ equity, current ratio, debt/equity ratio, and
Days Sales Outstanding (DSO). For example, does the organization have enough cash for payroll and other bills? Does it have the right mix
of debt versus equity (stock)? How do you know?
2. Does the organization have the right amount of cash and other resources (e.g., key people, technologies, reputation, physical assets, etc.)
to fuel future growth? What does this suggest for business decisions? For example, if it has too much cash, should it pay a large dividend,
repurchase its own shares, or reinvest the excess funds?
3. Assess the financial value of the company using relevant indicators. What does your assessment imply for future business health and
performance? For example, what is the business’s current market value? What is its price-to-earnings ratio? What do these suggest
about investor perceptions of the business’s future?
IV.
Success Factors and Risks. Use this section to discuss the factors that may affect current and future performance. Specifically:
A. How do the organization’s financial and strategic priorities affect accounting procedures and business decisions? How might that affect business
success? For example, is management growth-oriented or efficiency-oriented? What is the organization’s approach to risk and short- versus longterm planning horizons?
B. How might the organization better capitalize on non-financial factors such as market share, reputation, human resources, physical facilities, or
patents? Support your response with relevant research and analysis.
C. What are the most significant internal risks to the company’s financial performance? Give evidence to support your response. For example, is the
company vulnerable to technological changes or cyber-attacks? Loss of high-talent personnel? Production disruptions?
V.
Projections. Based on what you know about the organization’s financial health and performance, forecast its future performance. In particular, you
should:
A. Project the organization’s likely consolidated financial performance for each of the next three years. Support your analysis with an appendix
spreadsheet showing actual results for the most recent year, along with your projections and assumptions. Remember, your supervisor is
interested in fresh perspectives, so you should not just replicate existing financial statements, but should add other relevant calculations or
disaggregations to help inform decisions.
B. Modify your projections for the coming year to show a best- and worst-case scenario, based on the potential success factors and risks you
identified. As with your initial projections, support your analysis with an appendix spreadsheet, specifying your assumptions and including
relevant calculations and disaggregations beyond those in existing financial reports.
C. Discuss how your assumptions, forecasting methodology, and information gaps affect your projections. Why are your projections appropriate?
For example, are they consistent with the organization’s mission and priorities? Aggressive but achievable? How would changing your
assumptions change your projections?
VI.
Business opportunities. In this section, discuss the incremental impact of a hypothetical, but reasonable, simple new investment project, such as a new
product or facility or a cost-cutting investment, as an initial step in thinking about the future. Be sure to address the following:
A. Based on your knowledge of this organization, what is a likely investment it would consider and why? Be sure to describe the basic features of
the investment as a foundation for considering its potential financial impact.
B. Evaluate the approximate costs and benefits of the investment you identified, explaining how these would affect your spreadsheet projections
and business decisions. Estimates are sufficient, but should be grounded in common sense and insight into the organization.
C. How does the potential investment affect budgeting and related business decisions? For example, does the investment involve significant cash
spending this coming year, followed by benefits in the following year? How might that affect short-term and long-term spending priorities? Does
the benefit outweigh the cost?
VII.
Recommendations. What should you and your manager do next? Support your recommendations with evidence from your financial analysis. For
example, should the company pursue the new investment you identified? Implement process changes to decrease risks and/or improve performance?
Milestones
Milestone One: Financial Performance and Health
In Module Three, you will submit your first milestone in which you will evaluate the organization’s recent financial performance and current financial health,
given its organizational context. This milestone will be graded with the Milestone One Rubric.
Milestone Two: Success Factors, Risk, and Projections
In Module Five, you will discuss factors that may affect current and future performance. You will then forecast future performance, based on what you know
about the organization’s financial health and performance. This milestone will be graded with the Milestone Two Rubric.
Milestone Three: Business Opportunities
In Module Seven, you will discuss the incremental impact of a hypothetical, but reasonable, simple new investment project, such as a new product or facility or a
cost-cutting investment, as an initial step in thinking about the future. This milestone will be graded with the Milestone Three Rubric.
Final Submission: Financial Analysis Projection Report
In Module Nine, you will submit your final project. It should be a complete, polished artifact containing all of the critical elements of the final product. It should
reflect the incorporation of feedback gained throughout the course. This submission will be graded with the Final Product Rubric.
Deliverables
Milestone
1
Deliverable
Financial Performance and Health
Module Due
Three
Grading
Graded separately; Milestone One Rubric
Five
Graded separately; Milestone Two Rubric
2
Success Factors, Risk, and Projections
3
Business Opportunities
Seven
Graded separately; Milestone Three Rubric
Final Submission: Financial Analysis
Projection Report
Nine
Graded separately; Final Product Rubric
Final Product Rubric
Guidelines for Submission: Your financial analysis and projection report should be approximately 6–8 pages long (excluding title page, spreadsheets and graphs,
and references list). It should be double spaced, with 12-point Times New Roman font and one-inch margins, and should use the latest guidelines for APA
formatting for references and citations. Please also include your name, course name, and submission date on the title page.
Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information,
review these instructions.
Critical Elements
Executive Summary
Exemplary (100%)
Meets “Proficient” criteria, and
response is especially wellsuited for target audience
Proficient (90%)
Clearly and concisely
summarizes principal findings,
projections, and
recommendations with an eye
to persuading busy executives
to support ideas and read
further
Approach
Meets “Proficient” criteria, and
response is especially wellsuited for target audience
Provides intended audience
with a solid, but brief, sense of
parameters of analysis and who
else would be consulted in
refining it
Needs Improvement (70%)
Summarizes principal findings,
projections, and
recommendations with an eye
to persuading busy executives
to support ideas and read
further, but summary is
lengthy, lacks clarity, omits
critical details, or contains
inaccuracies
Provides intended audience
with a sense of parameters of
analysis and who else would be
consulted, but response is
lengthy, lacks clarity, omits
critical details, or contains
inaccuracies
Not Evident (0%)
Does not summarize principal
findings, projections, and
recommendations with an eye
to persuading busy executives
to support ideas and read
further
Value
5.33
Does not provide intended
audience with a sense of
parameters of analysis and who
else would be consulted in
refining it
5.33
Financial: Context:
Key Features
Meets “Proficient” criteria and
draws particularly insightful
connections between
organization’s financial and
non-financial features and
business decisions
Describes how key features of
organization help set
boundaries for business
decisions
Financial: Context:
Organized
Meets “Proficient” criteria and
demonstrates especially keen
insight into relationships
between organization’s
structure, how financial
information is recorded, and
impact on business decisions
Analyzes how company is
organized and managed and
effect on accounting and
financial information and
subsequent business decisions
Financial:
Performance:
Income
Meets “Proficient” criteria, and
analysis and supporting
evidence are particularly wellsuited to drawing meaningful
conclusions about financial
performance
Assesses what consolidated
income statements for last
three years say about financial
performance, supported by
relevant indicators, graphs, and
spreadsheets
Financial:
Performance: Cash
Flow
Meets “Proficient” criteria, and
analysis and supporting
evidence are particularly wellsuited to drawing meaningful
conclusions about financial
performance
Assesses what consolidated
cash flow statements for the
same time period say about
financial performance,
supported by relevant
indicators, graphs, and
spreadsheets
Financial:
Performance:
Underlying
Meets “Proficient” criteria, and
assessment is especially
nuanced and well supported by
relevant analysis and research
Assesses underlying financial
performance, supported by
analysis and relevant research
Describes how key features of
organization help set
boundaries for business
decisions, but response is
cursory, contains inaccuracies,
or links to decision making are
weak or illogical
Analyzes how company is
organized and effect on
accounting and financial
information and decisions, but
response is cursory, contains
inaccuracies, or links between
organizational structure,
finance, and decision making
are weak or illogical
Assesses what consolidated
income statements say about
financial performance,
supported by indicators,
graphs, and spreadsheets, but
response is cursory, contains
inaccuracies, or support is not
relevant
Assesses what consolidated
cash flow statements say about
financial performance,
supported by indicators,
graphs, and spreadsheets, but
response is cursory or contains
inaccuracies or support is not
relevant
Assesses underlying financial
performance, supported by
analysis and research, but
response is cursory, contains
gaps in accuracy or logic, or is
poorly supported by analysis
and research
Does not describe how key
features of organization help
set boundaries for business
decisions
5.33
Does not analyze how company
is organized and managed and
effect on accounting and
financial information and
subsequent business decisions
5.33
Does not assess what
consolidated income
statements for last three years
say about financial
performance, supported by
relevant indicators, graphs, and
spreadsheets
3.6
Does not assess what
consolidated cash flow
statements for the same time
period say about financial
performance, supported by
relevant indicators, graphs, and
spreadsheets
3.6
Does not assess underlying
financial performance,
supported by analysis and
relevant research
3.6
Financial: Health:
Capitalized
Meets “Proficient” criteria and
analysis and supporting
evidence are particularly well
suited to drawing meaningful
conclusions about financial
health
Assesses how organization is
capitalized and what that says
about financial health,
supported by relevant graphs,
spreadsheets, and indicators
Financial: Health:
Growth
Meets “Proficient” criteria and
demonstrates extraordinary
insight into the connections
between financial and nonfinancial resources, resource
management strategies, and
business decisions related to
growth
Determines whether
organization has right amount
of cash and other resources to
fuel future growth and what
this suggests for business
decisions
Financial: Health:
Financial Value
Meets “Proficient” criteria, and
assessment and supporting
evidence are particularly well
suited to drawing meaningful
conclusions about future
financial health and
performance
Assesses financial value of
company and what it implies
for future health and
performance using relevant
indicators
Success Factors and
Risks: Priorities
Meets “Proficient” criteria, and
discussion of how priorities
inform management decisions
is especially nuanced
Determines how organization’s
financial and strategic priorities
affect accounting procedures
and business decisions and the
implications for business
success
Assesses how organization is
capitalized and what that says
about financial health,
supported by graphs,
spreadsheets, and indicators,
but response is cursory or
contains inaccuracies or
support is not relevant
Determines whether
organization has right amount
of cash and other resources to
fuel future growth and what
this suggests for business
decisions, but response is
cursory or contains
inaccuracies or links between
different types of resources
and business decisions are
weak or illogical
Assesses financial value of
company and what it implies
for future health and
performance using relevant
indicators, but assessment is
cursory or contains
inaccuracies or links to future
health and performance are
weak or illogical
Determines how organization’s
financial and strategic priorities
affect accounting procedures
and business decisions and the
implications for business
success, but response is
cursory or contains
inaccuracies or links between
priorities and business
decisions and procedures are
weak or illogical
Does not assess how
organization is capitalized and
what that says about financial
health, supported by relevant
graphs, spreadsheets, and
indicators
3.6
Does not determine whether
organization has right amount
of cash and other resources to
fuel future growth and what
this suggests for business
decisions
5.33
Does not assess financial value
of company and what it implies
for future health and
performance using relevant
indicators
3.6
Does not determine how
organization’s financial and
strategic priorities affect
accounting procedures and
business decisions and the
implications for business
success
5.33
Success Factors and
Risks: Non-Financial
Factors
Meets “Proficient” criteria and
demonstrates extraordinary
insight into the ways in which
non-monetary factors impact
business opportunities
Identifies how organization
might better capitalize on nonfinancial factors, supported by
relevant research and analysis
Success Factors and
Risks: Risks
Meets “Proficient” criteria and
provides especially nuanced
and well-supported insight into
the internal factors that are
most significant in driving
financial risk
Pinpoints most significant
internal risks to financial
performance, supported by
evidence
Projections: Likely
Performance
Meets “Proficient” criteria, and
projections are especially
nuanced and well-supported by
evidence and realistic
assumptions
Projects likely consolidated
financial performance for next
three years, supported by
spreadsheet showing actual
results for most recent year,
projections, and assumptions
Projections: Best
and Worst Case
Meets “Proficient” criteria and
demonstrates especially keen
insight into the range of
possible financial projections,
based on reasonable and
realistic assumptions
Modifies projections to show
best- and worst-case scenarios
for coming year based on
success factors and risks
identified, supported by
spreadsheet with assumptions
and relevant information
beyond existing financial
reports
Identifies how organization
might better capitalize on nonfinancial factors, supported by
research and analysis, but
response is cursory, contains
inaccuracies, or is poorly
supported
Pinpoints most significant
internal risks to financial
performance, supported by
evidence, but response is
cursory, contains gaps in
accuracy or logic, or evidence is
weak or irrelevant
Projects likely consolidated
financial performance for next
three years, supported by
spreadsheet showing actual
results for most recent year,
projections, and assumptions,
but response contains
inaccuracies or faulty
assumptions or omits key
details
Modifies projections to show
best- and worst-case scenarios
based on success factors and
risks identified, supported by
spreadsheet with assumptions
and additional information, but
response contains inaccuracies
or faulty assumptions or
additional information included
is not relevant
Does not identify how
organization might better
capitalize on non-financial
factors, supported by research
and analysis
5.33
Does not pinpoint most
significant internal risks to
financial performance,
supported by evidence
5.33
Does not project likely
consolidated financial
performance for next three
years, supported by
spreadsheet showing actual
results for most recent year,
projections, and assumptions
5.33
Does not modify projections to
show best- and worst-case
scenarios based on success
factors and risks identified,
supported by spreadsheet with
assumptions and information
beyond existing financial
reports
5.33
Projections: Discuss
Meets “Proficient” criteria and
demonstrates especially keen
insight into the sensitivity of
financial projections to
changing circumstances and
assumptions
Discusses how assumptions,
forecasting methodology, and
information gaps affect
projections and why
projections are appropriate
Business
Opportunities: Likely
Investment
Meets “Proficient” criteria, and
investment identified is
particularly well-aligned with
the needs, priorities, and goals
of the organization
Identifies likely investment to
consider and why, describing
its basic features as a
foundation for considering
potential financial impact
Business
Opportunities: Costs
and Benefits
Meets “Proficient” criteria, and
evaluation is based on realistic
estimates and is especially well
aligned with decision-making
needs
Evaluates approximate costs
and benefits of investment
identified, explaining how
these would affect spreadsheet
projections and business
decisions
Business
Opportunities:
Implications
Meets “Proficient” criteria, and
discussion of budgeting
implications is particularly
nuanced and well aligned with
decision-making needs
Assesses implications of
potential investment for
budgeting and related business
decisions
Recommendations
Meets “Proficient” criteria, and
response is especially wellsuited for target audience
Recommends clear and
coherent next steps, based on
persuasive evidence from
financial analysis
Discusses how assumptions,
methodology, and information
gaps affect projections and why
projections are appropriate,
but discussion is cursory or
illogical or contains
inaccuracies
Identifies likely investment to
consider and why, describing
its basic features as a
foundation for considering
potential financial impact, but
response is cursory or contains
inaccuracies or justification for
why investment would be of
interest to organization is weak
Evaluates approximate costs
and benefits of investment
identified, explaining how
these would affect spreadsheet
projections and business
decisions, but evaluation is
cursory or contains gaps in
accuracy or logic, or links to
business decisions are weak
Assesses the implications of
potential investment for
budgeting and related business
decisions, but evaluation is
cursory or contains
inaccuracies
Recommends next steps, based
on evidence from financial
analysis, but these are not
clear and coherent, or evidence
is not persuasive given
intended audience
Does not discuss how
assumptions, forecasting
methodology, and information
gaps affect projections and why
projections are appropriate
5.33
Does not identify likely
investment to consider and
why, describing its basic
features as a foundation for
considering potential financial
impact
5.33
Does not evaluate approximate
costs and benefits of
investment identified,
explaining how these would
affect spreadsheet projections
and business decisions
5.33
Does not assess implications of
potential investment for
budgeting and related business
decisions
5.33
Does not recommend next
steps, based on evidence from
financial analysis
5.33
Articulation of
Response
Submission is free of errors
related to citations, grammar,
spelling, syntax, and
organization and is presented
in a professional and easy-toread format
Submission has no major errors
related to citations, grammar,
spelling, syntax, or organization
Submission has major errors
related to citations, grammar,
spelling, syntax, or organization
that negatively impact
readability and articulation of
main ideas
Submission has critical errors
related to citations, grammar,
spelling, syntax, or organization
that prevent understanding of
ideas
2.05
Earned Total
100%
Purchase answer to see full
attachment