FIN 320 Module Five Activity Guidelines and Rubric
Overview
Organizations must manage their working capital to meet their short-term obligations. It’s important to consider working capital problems such as excess credit or a low cash balance. This is especially important when you propose new projects or investments. A business can get a competitive advantage in the marketplace if it manages these issues early.
Directions
Look at the business you selected in Final Project Milestone One and its financial statements for the most recent fiscal quarter. Complete the calculations for determining working capital. Then tell how the financial statements help determine financial health.
Specifically, you must address the following rubric criteria:
- Financial Statements: Explain the various financial statements needed to calculate a business’s working capital. Also explain how to use each financial statement for the calculation. Give examples to support your claims.
- Working Capital’s Role: Discuss how businesses that manage their working capital well stay healthy.
- Working Capital Interpretation: Use the correct formula to calculate working capital. Then discuss the business’s financial liquidity position at this time.
- For example, does the business have enough working capital ready to address bills to suppliers? Will there be potential cash inflow at the end of the year?
- Working Capital Management Trend: Discuss the business’s trend in how they manage their working capital.
- Remember that financial statements reflect a specific period of time and the value of the business’s working capital during that period. Use Mergent Online to find financial statements for earlier periods. This will give you a better sense of the business’s trend.
What to Submit
Your submission should be a 2- to 3-page Microsoft Word document with 12-point Times New Roman font, double spacing, and one-inch margins. All sources should be cited using APA style.
Module Five Activity Rubric
CriteriaMeets Expectations (100%)Partially Meets Expectations (70%)Does Not Meet Expectations (0%)ValueFinancial StatementsExplains the various financial statements needed to calculate a business’s working capital and how each statement is used and gives examples to support claimsShows progress toward meeting expectations, but with errors or omissions; areas for improvement may include explaining in more detail the various financial statements needed to calculate a business’s working capital and how each statement is used or giving more examples to support claimsDoes not attempt criterion15Working Capital’s RoleDiscusses how businesses that manage their working capital well stay healthyShows progress toward meeting expectations, but with errors or omissions; areas for improvement may include discussing in more detail how businesses that manage their working capital well stay healthyDoes not attempt criterion20Working Capital InterpretationUses the correct formula to calculate working capital and discusses the business’s current financial liquidity positionShows progress toward meeting expectations, but with errors or omissions; areas for improvement may include using the correct formula to calculate working capital or discussing in more detail the business’s current financial liquidity positionDoes not attempt criterion20Working Capital Management TrendDiscusses the business’s trend in how they manage their working capitalShows progress toward meeting expectations, but with errors or omissions; areas for improvement may include discussing in more detail the business’s trend in how they manage their working capitalDoes not attempt criterion25Clear CommunicationConsistently and effectively communicates in an organized way to a specific audienceShows progress toward meeting expectations, but communication is inconsistent or ineffective in a way that negatively impacts understandingShows no evidence of consistent, effective, or organized communication20Total:100%Â