On Your Mark: Analysis of the Financial Condition
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On Your Mark is preparing to release its first Annual Stockholder Report since the company's recent initial public offering (IPO). The accounting department has already prepared and provided the financial statements and ratios (see below) for the most recent year. Now all the division managers are meeting to help create the written analysis portions for the annual report keeping in mind all the stakeholders who will be reading this information. ( i.e.,shareholders, regulators, investors, security analysts, credit rating agencies, etc.) Using what you know about On Your Mark from the scenario above, the financial documents, and details from your previous tasks, create On Your Mark's first Annual Stockholder Report for its' stakeholders. Provide as much detailed analysis as possible to your shareholders for each of the following areas, keeping in mind how the users of this information are likely to use it:
1. Summarize the nature of the firm's business and its business strategy
2. Assess the internal and external risk factors for the firm
3. Provide an analysis of the financial condition for the firm
4. Evaluate the firm's credit worthiness
5. Discuss the competitive position of the firm
6. Summarize the financial and accounting control procedures in place to ensure compliance with applicable regulatory agencies
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Solution Summary
This 1,000 word response provides the analysis of the financial condition of On Your Mark, including the nature of the business and business strategy, what internal and external risk factors exist for the firm, analysis of the financial condition for the firm, its credit worthiness, the competitive position of the firm, and any financial and accounting control procedures in place.
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On Your Mark is preparing to release its first Annual Stockholder Report since the company's recent initial public offering (IPO). The accounting department has already prepared and provided the financial statements and ratios (see below) for the most recent year. Now all the division managers are meeting to help create the written analysis portions for the annual report keeping in mind all the stakeholders who will be reading this information. ( i.e.,shareholders, regulators, investors, security analysts, credit rating agencies, etc.) Using what you know about On Your Mark from the scenario above, the financial documents, and details from your previous tasks, create On Your Mark's first Annual Stockholder Report for its' stakeholders. Provide as much detailed analysis as possible to your shareholders for each of the following areas, keeping in mind how the users of this information are likely to use it:
2. Assess the internal and external risk factors for the firm
Internal and external risk factors of the firm can be assessed by scanning the environment affecting the business organizations. Internal factors are related to the company. As per the pure theory, Internal risk factor is the risk factor related to the capital structure. There can be risks related to other internal functional areas of the organization. Here one measures the solvency position of the firm. External risk factors consists of stability of earnings, cash flow, liquidity etc. (Books.google, 2009) We also study the other external factors such as industry and economic environment affecting the firm.
Case of OnyourMark
Risk factors
1) Solvency
Following ratios will be seen:
Debt equity ratio
This measures the long term solvency of the organization. Lower debt equity ratio indicates lower financial risk. Bank will prefer the organization to ...
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