For this assignment, you will continue to use the published data from the most recent annual reports you
have been studying, as well as analyst reports and other resources available on the Internet.
A. Complete the Assignment 3 Worksheet to assemble and assess your forecasts of working capital.
The guidance for this is found on pages 137–169 of The CFO Guidebook.
B. Summarize your Analysis and Recommendations by addressing the following questions:
i. Which metrics/trends are most critical for forecasting future performance and for budgeting?
To answer this, you must include an analysis of both past trend performance AND the
applicability and reliability of key forecast indicators. In your response, consider:
a. Which company has the stronger income statement? Explain.
b. Which company has the stronger cash flows? Explain.
c. Which company has the stronger operating performance? Explain.
ii. Why are the metrics/trends in the data sets above so critical? How reliable are they as
predictors of future performance?
iii. Based on the data you have analyzed, which metrics would you focus on to improve the
performance of the weaker company against the stronger one? Why?
a. How would you do this? What specific financial tools would you apply? Why?
b. What would “realistic” improvement look like?
c. How would you measure success?
