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Corporate Financial Management Assignment

Case - FORTUNE BRANDS

Scenario: It is early 2016. You are the Vice President of Planning and Analysis at Fortune Brands. Fortune Brands is a multi-billion dollar manufacturer of products for the home. You report to Mr. E. Lee Wyatt, Jr., Senior Vice President and Chief Financial Officer. Mr. Wyatt has requested that you compare 2015 financial results vs. 2014 financial results.

Required: Write a memorandum to Mr. Wyatt that addresses each of the following items. Please use business memorandum form. Proofread carefully.

  • Calculate each of the following ratios for both 2014 and 2015: current ratio, quick ratio (correct method), days sales outstanding, times interest earned, EBITDA / sales, return on common equity. Further breakdown the return on common equity by using the DuPont formula. Interpret the 1-year trend for each ratio going from 2014 to 2015.
  • Examine the 2015 Statement of Cash Flows. Is the 2015 cash flow "healthy?" Justify. [NOTE: Just look at 2015 numbers. Ignore 2014 and 2013!]
  • Based on the above analysis, state and discuss your overall assessment of Fortune Brands's performance of 2015 vs.2014.

Attachment:- Fortune Brands.rar

Corporate Finance, Finance

  • Category:- Corporate Finance
  • Reference No.:- M92182750

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