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ACTIVITY 4 MF620 Financial Statement Development and Analysis Lesson 4: Long Term Financing Activity 4: Long Term Financing (4 pages, 100 points) Choose a publicly traded company on which to focus, modeled on the Walmart analysis in chapter 14. Part A Project an income statement for next year for the firm based on your assessment of revenue growth, key projected financial ratios, and any other key assumptions, making sure to justify any assumptions. Commented [KA1]: I recommend you select a company similar to Wal-Mart such as Target to complete your analysis. Much of the information provided about WalMart in your text will be applicable since Target is a direct competitor Commented [KA2]: A possible method to project income is through the use of Pro-Forma income statements. Please consult section 6.1 in your book to help you with this 1. What is your projection for net income and how does it compare with the previous year? 2. Based on your assessment of anticipated dividends, what is your projection for a change in retained earnings? Part B Project a balance sheet for next year for the firm based on your assessment of the change in retained earnings, key projected financial ratios, and any other key assumptions, making sure to justify any assumptions. Use external borrowing as your balancing \"plug.\" What is your assessment of the firm's financial needs? Commented [KA3]: This is covered in section 6.2 in the textbook Part C Based on your projection of financial needs, what recommendation would you make to the firmfor example, how to meet increased financing needs or what to do with excess financial capacity? Commented [KA4]: You make your recommendations based on the pro-forma statements you create. This will give you insight in the financing needs for the upcoming years. You may also want to include a discussion on sensitivity and scenario analysis in your discussion. Grading Rubric Please refer to the rubric on the following page for the grading criteria for this assignment. ACTIVITY 4 MF620 Financial Statement Development and Analysis Lesson 4: Long Term Financing Activity 4: Long Term Financing (4 pages, 100 points) Choose a publicly traded company on which to focus, modeled on the Walmart analysis in chapter 14. Part A Project an income statement for next year for the firm based on your assessment of revenue growth, key projected financial ratios, and any other key assumptions, making sure to justify any assumptions. 1. What is your projection for net income and how does it compare with the previous year? 2. Based on your assessment of anticipated dividends, what is your projection for a change in retained earnings? Part B Project a balance sheet for next year for the firm based on your assessment of the change in retained earnings, key projected financial ratios, and any other key assumptions, making sure to justify any assumptions. Use external borrowing as your balancing \"plug.\" What is your assessment of the firm's financial needs? Part C Based on your projection of financial needs, what recommendation would you make to the firmfor example, how to meet increased financing needs or what to do with excess financial capacity? Grading Rubric Please refer to the rubric on the following page for the grading criteria for this assignment. Please refer to the rubric on the following page for the grading criteria for this assignment