Analyze the fundamental differences between the working capital structures and components for each chosen company, and speculate upon the main reasons why such differences exist.
Fundamental differences between the working capital structures
Using the Internet or Strayer databases, choose two (2) different companies, and research the components of their respective working capital structures.
Write a three to four (3-4) page paper in which you:
1. Analyze the fundamental differences between the working capital structures and components for each chosen company, and speculate upon the main reasons why such differences exist.
2. Based on your analysis above, make at least two (2) recommendations as to how each company could improve its working capital positions. Provide support for your recommendations.
3. Place yourself in the role of a Wall Street Analyst who has to recommend one (1) of the companies as an investment to a company’s clients. Recommend one (1) of the two companies, based solely on that company’s working capital, and support that recommendation.
4. Place yourself in the role of an Investment Banker who has to recommend loaning a substantial amount of capital to one (1) of the chosen companies. Recommend one (1) of the two (2) companies, based solely on that company’s working capital, and support that recommendation.
5. Use at least three (3) quality references. Note: Wikipedia and other Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
•Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
•Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.
The specific course learning outcomes associated with this assignment are:
•Examine the concepts of working capital and the financial analysis of a company’s working capital position.
•Use technology and information resources to research issues in advanced accounting theory.
•Write clearly and concisely about advanced accounting theory using proper writing mechanics.
Class, regarding your assignment that is due this week. Start with a definition of working capital. You can watch and listen to the YouTube video below to refresh your understanding of working capital. Look in your two corporate annual reports for how they report working capital relative to the definition that you present. Describe how the two corporate reports reflect or do not reflect your definition. Describe how the two corporate reports are the same or different. Cite your corporate reports and include exact page numbers as to where you found the working capital information.
In addition to the YouTube reference list information below, there are two additional items that you might want to read and possibly use in your Week 6 assignment.
Bittner, J., Porter, J., & Serda, J. (n.d.). Working capital structure: Identifying opportunities and minimizing risks. American Bankruptcy Institute Journal. Retrieved from http://www.grantthornton.com/staticfiles/GTCom/Advisory/Restructuring%20and%20turnaround/financial%2012-11.pdf
Grant Thornton. (2016, February 2). Pitfalls of software M&A: Working capital can come back to hurt sellers. Grant Thornton. Retrieved from http://www.grantthornton.com/issues/library/articles/technology/2016/pitfalls-of-software-m-and-a.aspx
Working Capital Video Definition. YouTube.com. Retrieved from https://www.youtube.com/watch?v=2yrI2sM8LhI