See Guidelines, details under Prompt..Determine working capital and its relevance in assessing the financial health
Overview Working capital management is critical to an organization’s ability to meet its short-term obligations. When proposing new projects or investment ideas for corporations, it is critical to consider working capital red flags such as excess credit use by the business or a low cash balance. Managing such issues early on can help corporations acquire a competitive advantage in the marketplace. Prompt Using the business you selected for Project Two, complete the calculations for determining working capital, and describe their relevance in assessing financial health. Specifically, you must address the following rubric criteria: Financial Statement(s): Explain the various financial statement(s) needed to calculate a business’s working capital and how each financial statement is used. Provide examples to support your claims. Working Capital’s Role: Discuss how effective working capital management supports a healthy business. Working Capital Interpretation: Use the appropriate formula to calculate working capital, then discuss the business’s current financial liquidity position. For example, does the business have sufficient working capital on hand to address bills to suppliers? Will there be potential cash inflow at the end of the year? Working Capital Management Direction: Discuss the current direction of the business regarding working capital management. Keep in mind that financial statements reflect a specific moment or period of time and the value of the business’s working capital during that period. To get a better understanding of the direction in which a business is going, use the business’s balance sheets from Mergent Online to compare the business’s value today against its value from one year ago. Guidelines for Submission Your submission should be a 2 to 3-page Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Any sources should be cited according to APA style. Module Five Activity Rubric CriteriaProficient (100%)Needs Improvement (70%)Not Complete (0%)Value Financial StatementExplains the various financial statement(s) needed to calculate a business’s working capital and how each statement is usedShows progress toward proficiency, but with errors or omissions; areas for improvement may include explaining in more detail the various financial statement(s) needed to calculate a business’s working capital and how each statement is usedDoes not attempt criterion15 Working Capital’s RoleDiscusses how effective working capital management supports a healthy businessShows progress toward proficiency, but with errors or omissions; areas for improvement may include discussing in more detail how effective working capital management supports a healthy businessDoes not attempt criterion20 Working Capital InterpretationUses the appropriate formula to calculate working capital and discusses the business’s current financial liquidity positionShows progress toward proficiency, but with errors or omissions; areas for improvement may include discussing in more detail the business’s current financial liquidity position or using the appropriate formula to calculate the working capitalDoes not attempt criterion20 Working Capital Management DirectionDiscusses the current direction of the business regarding working capital managementShows progress toward proficiency, but with errors or omissions; areas for improvement may include discussing in more detail the current direction of the business regarding working capital managementDoes not attempt criterion25 Articulation of ResponseClearly conveys meaning with correct grammar, sentence structure, and spelling, demonstrating an understanding of audience and purposeShows progress toward proficiency, but with errors in grammar, sentence structure, and spelling, negatively impacting readabilitySubmission has critical errors in grammar, sentence structure, and spelling, preventing understanding of ideas20 Total: 100% SKM_658e21060114320 Untitled Spreadsheet BalanceSheet Powered by Clearbit Tesla Inc (NMS: TSLA) Exchange rate used is that of the Year End reported date Standardized Quarterly Balance Sheet Report Date03/31/2021 1st Quarter CurrencyUSD Audit StatusNot Qualified ConsolidatedYes ScaleThousands Cash & Equivalents17,141,000.00 Cash & Equivs & ST Investments17,141,000.00 Receivables (ST)1,890,000.00 Inventories4,132,000.00 Other Current Assets1,542,000.00 Total Current Assets24,705,000.00 Gross Property Plant & Equip19,257,000.00 Accumulated Depreciation5,389,000.00 Net Property Plant & Equip13,868,000.00 Receivables (LT)- Intangible Assets505,000.00 Other Assets13,894,000.00 Total Assets52,972,000.00 Accounts Payable & Accrued Exps10,139,000.00 Accounts Payable6,648,000.00 Accrued Expenses3,491,000.00 Current Debt1,819,000.00 Other Current Liabilities2,919,000.00 Total Current Liabilities14,877,000.00 LT Debt & Leases9,053,000.00 Deferred LT Liabilities1,438,000.00 Minority Interests1,448,000.00 Other Liabilities3,139,000.00 Total Liabilities29,955,000.00 Common Share Capital1,000.00 Additional Paid-In Capital27,623,000.00 Retained Earnings(4,750,000.00) Accum Other Comprehensive Income143,000.00 Other Equity- 0 Total Equity23,017,000.00 Total Liabilities & Equity52,972,000.00 IncomeStatement Powered by Clearbit Tesla Inc (NMS: TSLA) Exchange rate used is that of the Year End reported date Standardized Quarterly Income Statement Report Date03/31/2021 1st Quarter CurrencyUSD Audit StatusNot Qualified ConsolidatedYes ScaleThousands Sales Revenue8,705,000.00 Other Revenue1,684,000.00 Total Revenue10,389,000.00 Direct Costs8,174,000.00 Gross Profit2,215,000.00 Selling General & Admin1,056,000.00 Research & Development666,000.00 Restruct Remediation & Impair(101,000.00) Other Operating Expense- 0 Total Indirect Operating Costs1,621,000.00 Operating Income594,000.00 Interest Income(89,000.00) Other Non-Operating Income28,000.00 Total Non-Operating Income(61,000.00) Earnings Before Tax533,000.00 Taxation69,000.00 Minority Interests26,000.00 Extraordinary Items- 0 Accounting Changes- 0 Net Income438,000.00 Preference Dividends & Similar- 0 Net Income to Common438,000.00 Average Shares Basic961,000.00 EPS Net Basic0.46 EPS Continuing Basic0.46 Average Shares Diluted1,133,000.00 EPS Net Diluted0.39 EPS Continuing Diluted0.39 Shares Outstanding963,000.00 CashFlow Powered by Clearbit Tesla Inc (NMS: TSLA) Exchange rate used is that of the Year End reported date Standardized Quarterly Cumulative CF Report Date03/31/2021 1st Quarter CurrencyUSD Audit StatusNot Qualified ConsolidatedYes ScaleThousands Net Income (Cumu)464,000.00 Adjustments from Inc to Cash (Cumu)1,189,000.00 Change in Working Capital (Cumu)(12,000.00) Cash Flow from Operations (Cumu)1,641,000.00 Purchase of Pty Plant & Equip (Cumu)(1,360,000.00) Change in Business Activities (Cumu)- Other Investing Cash Flows (Cumu)(1,222,000.00) Cash Flow from Investing (Cumu)(2,582,000.00) Change in LT Debt (Cumu)(1,162,000.00) Change in Equity (Cumu)183,000.00 Payment of Dividends (Cumu)(32,000.00) Other Financing Cash Flows (Cumu)(5,000.00) Cash Flow from Financing (Cumu)(1,016,000.00) Effect of Exchange Rate (Cumu)(221,000.00) Change in Cash (Cumu)(2,178,000.00) Opening Cash (Cumu)19,901,000.00 Closing Cash17,723,000.00 Depn & Amortn (CF) (Cumu)621,000.00 Net Purch of Pty Plant & Equip (Cumu)(1,360,000.00)