Assignment 2: Performance Management and Valuation

Due:  Monday, 9:00 am (eastern), Week 7  (18% of final grade) 

The risk analysis work you did in the first assignment was a great start. It helped to paint a picture of where NVIDIA (NASDAQ: NVDA) and Intel (NASDAQ: INTC) are in their corporate lifecycles, the threats and opportunities each faces, and the defensibility of their economic moats – a metaphor that Buffett loves to use.  

In this assignment, you will continue your analysis by comparing key performance management metrics of our two companies, identifying areas of relative strength and weakness, and suggesting ways that each company could improve, thereby increasing its valuation. To do this, you will examine trends in order to identify variances and comparisons to: (1) establish benchmarks, (2) identify best practices, and (3) look for signs of superior performance. This analysis is critical in determining the value of each company, as well as evaluating whether potential acquisition or merger opportunities exist which could create greater value and synergies than those of operating the companies as separate entities.

 

 

Instructions

To prepare, reread the Morningstar Analyst’s Report and the most recent annual reports for both companies with a particular focus on the Income Statement and Statement of Cash Flows.

 

A.     Complete the Assignment 2 Worksheet to compare key performance metrics and ratios for both companies in order to see how performance can be impacted by manipulating certain financial levers. The guidance for this is found in Chapters 5 & 6 of The CFO Guidebook.

 

B.     Summarize your Analysis and Recommendations by answering the following questions:

 

i.       Performance Metrics:

a.   Which company is a more efficient generator of income?

b.   Which company is growing faster?

c.   Using financial health ratios, which company is more profitable?

d.   Which company has stronger valuation ratios?

e.   Overall, which is the better run company and why?

 

ii.     Merger Synergies:

a.   If there was an acquisition, which company is the most likely acquirer? Why?

b.   Would you recommend a merger or acquisition to increase the moat strength of the combined companies? Why or why not?

•        If you support a merger or acquisition, identify 3 performance metrics that could be improved by a merger and explain how they would be improved. Guidance for this is found in Chapter 6 of The CFO Guidebook.

 

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.

 

 

JWI 531 – Assignment 2 (1244)                                                                                                                               Page 1 of 3

•        If you do not support a merger or acquisition, explain your rationale and why the value of each company is best preserved/increased by remaining separate. The guidance for this is found in Chapter 6 of The CFO Guidebook.

 

 

 

Submission Requirements

 

A.     Complete and submit the Assignment 2 Worksheet component of the Workbook, along with your written work for Part B, through the assignment link in Canvas.

 

B.     Format your written responses for Analysis and Recommendation as follows:

•        Typed, double-spaced, professional font (size 10-12), including headings and subheadings (to identify main topics and subtopics), with one-inch margins on all sides.

•        References must be included and provide appropriate information that enables the reader to locate the original source.

o  Application and analysis of course materials and resources is expected.

o  At least one additional source beyond the course materials must be cited to support your analysis and recommendations.

•        Include a cover page containing the title of the assignment, your name, the professor’s name, the course title, and the date.

•        The maximum length is 4 pages, excluding your cover page, completed worksheets, and reference list.

 

 

 

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.

 

 

JWI 531 – Assignment 2 (1244)                                                                                                                               Page 2 of 3

 

RUBRIC

 

 

Weight: 18% of Course Grade		Assignment 2: Performance Management and Valuation
CRITERIA	Honors	High Pass	Pass	Low Pass	Unsatisfactory
1. Complete the assignment worksheet   Weight: 30%	Submitted worksheet had 90% or higher correct data sets.	Submitted worksheet had between 80% and 89% correct data sets.	Submitted worksheet had between 70% and 79% correct data sets.	Submitted worksheet had between 60% and 69% correct data sets.	Did not submit worksheet or had fewer than 60% correct data sets entered.
2. Present synopsis of data     Weight: 30%	Data synopsis was excellent; accurately highlighted key data presented in both annual reports and third- party sources.	Synopsis was very good; focused on the most critical elements with only minor elements unclear/missing.	Synopsis was good; provided general snapshot of key data, but did not focus on the most critical elements.	Synopsis was overly simplistic; restated the data, but did not provide a coherent overview.	Synopsis was missing, incomplete, inaccurate, or did not align with data.
3. Present and defend sound recommended finance strategies       Weight: 30%	Presented and defended excellent finance strategies; exemplary connection to core finance principles and to real-world circumstances. Excellent consideration of viable options with very clear rationale for why options were not chosen.	Presented and defended very good finance strategies; solid connection to core finance principles and to real-world circumstances. Very good consideration of viable options with good rationale for why options were not chosen.	Recommended strategies were good, but lacked clarity on how they could be implemented to drive outcomes. Addressed other options, but was unclear why these were not chosen.	Recommended strategies were basic or were not supported by data and analysis or tied to desired outcomes. Made minimal reference to options, but did not explain why these were not recommended.	Recommended strategies were missing, superficial, and/or were not supported by data and analysis. No options were presented.
4. Include appropriate citations and use professional writing standards     Weight: 10%	Citations and references to both course materials and additional sources were properly documented; free from grammatical and formatting errors; adhered to maximum length.	Citations and references to both course materials and additional sources were properly documented; contained minor grammatical and formatting errors.	Citations and references to both course materials and additional sources were properly documented; contained some grammatical and formatting errors.	Included some citations and references to course materials, but failed to cite for several key references; contained distracting grammatical or formatting errors.	No citations provided and/or references to course materials were missing or did not support key content in submission; numerous writing mistakes.

 

 

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University. This document is subject to change based on the needs of the class.

 

 

JWI 531 – Assignment 2 (1244)                                                                                                                               Page 3 of 3