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You are a financial analyst in the finance division of Strident Marks, a manufacturing company that has recently gone through the initial public offering (IPO) process and has become a public company. Strident Marks has annual sales revenue of approximately $50 million and makes seven unique and distinct products (which serve seven different markets). Each product is represented by its own division within the company and has its own group of sales, marketing, and manufacturing personnel. Some departments, including human resources and the finance division, support the entire organization. Operations consist of a single headquarters and production (manufacturing) center.
In your role as financial analyst you are responsible for compiling and reporting on budget / forecast data, for assisting your investor relations department, and for assessing and valuing new business opportunities (which will ultimately be presented to upper management). You report directly to the Chief Financial Officer (CFO) and have the use of the accounting department's staff accountants to assist you with your budget / forecast responsibilities.
You have been informed by the CFO that Strident Marks will be aggressively pursuing new business opportunities, which may include expansion through acquisition and the development and implementation of new products. As a publicly traded company, Strident Marks is scrutinized by bankers and investors as never before. In fulfilling your responsibilities you must keep this in mind, and you must instill a new sense of financial discipline in the organization.
Task Type: Individual Project Deliverable Length: 1page single spaced times new roman
Consider the role of the finance department at Strident Marks. The finance department has a couple of new hires, and the CFO has asked that you spend a short amount of time with them, catching them up on some areas that are very important to the company at this time. These also happen to be areas for which Strident Marks does not yet have any training material. Write what you feel should be included in their training manual about the components of financial systems, focusing on valuation. What role does a financial department play in valuing business opportunities and what are some of the key financial concepts that valuation work must consider?
Task Type: Discussion Board 2 Deliverable Length: 4-5 paragraphs single spaced times new roman
What role(s) do financial institutions play in financial intermediation, why these roles are necessary, and how does the company needs to respond to the increased intermediation scrutiny due to the company IPO?
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Role of the Finance Department at Strident Marks
Financial executives at Strident Marks must now think beyond the traditional financial information contained in general ledger systems and consider how best to provide for the comprehensive measures and analytical methods needed to drive decisions throughout complex, dynamic companies.
To achieve these objectives, accounting, finance, tax and other financial areas are developing data warehouses combined with advanced analytics to serve the needs of the entire enterprise. We refer to this advanced decision support capability for finance as financial analytics. This article examines the evolution of financial analytics and its effect on the state of data warehousing.
Training Manual for new recruits at Strident Marks: Today's Business Environment
The evolution of financial analytics has been driven by the emergence of new business models, the changing role of the traditional finance department, modifications to business processes and advances in technology. This dynamic environment presents the finance function with tremendous opportunities and challenges.
Training Manual for new recruits at Strident Marks: New Business Models
With the introduction of the Internet, three new e-business models emerged: business-to-business (B2B), business-to-consumer (B2C) and business-to-employee (B2E). These new models are shaping the future of financial analytics.
These new business models, which I discussed in the August 2000 DM Review column entitled, "E-Analytics - The Next Generation of Data Warehousing," require a translucent connection and fluidity of information between departments and partner organizations. Underlying these new business models is a fundamental shift in values, from physical assets to intangible assets such as patents, trademarks, franchises, computer programs, research and development, business intelligence and relationships. Consequently, the value of information is soaring
For instance, let's focus on the B2C model. Many "pure" B2C organizations do not develop the products or services they sell. Instead, these companies outsource their manufacturing and other non-core operations. They focus their resources on developing a brand, managing a network of customers and other differentiated aspects of running the business. That said, these objectives can only be achieved through the more effective use of information.
Financial analytics has traditionally focused on how a company utilizes tangible assets such as cash, real estate, machinery, etc. However, many companies competing in the new electronic economy are valued based on their intangible assets. These increasingly important assets are often difficult to measure and manage. As a result, Strident Marks is relying on financial analytics to help them:
· Understand the overall performance of the organization,
· Identify ways to measure and maximize the value of intangible assets,
· Reduce operating costs and effectively manage enterprise-wide investments,
· Anticipate variations in the marketplace,
· Optimize the capabilities of information systems, and
· Improve business processes.
At the same time, other companies that are not leveraging their information assets are struggling for survival.
As the economy continues to evolve, so does the role of the finance function within an organization. Driven by investments in enterprise resource planning (ERP), shared services and changes in its reporting role, most finance functions are becoming more efficient - requiring fewer resources to manage them and closely aligning with the company's business structure. This is especially true in the area of transaction processing where improved automation of financial transactions has enabled finance staff to expand their role and spend more time supporting decision-making processes, rather than just processing and reconciling transactions.
More and more global organizations are integrating and standardizing their business processes and systems, allowing end users with both finance and non-finance functions to update and obtain financial information from any geographic location. This has significantly improved decision support within the organization.
Consequently, the role of the finance professional will evolve into a "coaching" role responsible for transferring the appropriate analytical tools and methods to decision-makers. Some CFOs have gone so far as to predict that, with time, major parts of the finance function will merge into the business as the role of finance employees continues to extend throughout the enterprise.
As business processes evolve and business questions become more complex, the analytics necessary to answer and act on these questions require a higher level of data integration and organizational collaboration. For in-stance, historically, finance departments were oftentimes the only departments with access to accurate information about a company's financial results. However, this information was usually at an aggregated level and wasn't available until several days, sometimes weeks, after the end of the month.
During the past decade, however, Strident Marks has been successfully integrating back-office processes and information flows across the enterprise by replacing function-based legacy systems with a single ERP system, reengineering business processes and streamlining business transactions. This has enabled executives and managers to access more accurate and consistent detailed financial, as well as non-financial, information about the organization throughout the month.
In the mid-nineties, new software products capable of maximizing the value of the Internet were introduced in the marketplace. Strident Marks began implementing supply chain management (SCM), customer relationship management (CRM) and other sophisticated system solutions to optimize their end-to-end operations. At the same time, organizations - each with its own legacy systems - began strengthening their relationships with customers and suppliers. All of this contributed to the new challenge organizations are facing today: a ...
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