Week 1:

You are a new economist for a major financial institution, and you’ve been invited to speak as a guest lecturer for a Freshman Finance course at the local university.

Respond to the following in a minimum of 175 words:

  • Share how you would describe the overall purpose and mechanics of both primary and secondary markets.
  • How would you explain the way the performance of your company is influenced by the activity of the markets you described?
  • After your initial post, choose a classmate’s approach that is different from the approach you’d take on the guest lecture. What additional information might you include in your lecture based on your classmate’s approach? 

Week 2:

You are a research analyst for a publicly traded company, and you’ve been assigned to give a presentation on how a company uses performance metrics in corporate valuation.

Respond to the following in a minimum of 175 words:

  • Think about how you would present return on equity (ROE) and earnings per share (EPS) to a group of investors or senior management.
  • Explain the use of ROE and EPS in evaluating the value of a company. Include how to calculate ROE and EPS.
  • Why is understanding ROE and EPS important to a company’s value?
  • Share an example of a company whose ROE and EPS you calculated. What do these results say about the company?


Week 3:

You are a Finance Manager for a major utility company.

Respond to the following in a minimum of 175 words:

  • Think about some of the capital budgeting techniques you might use for some upcoming projects.
  • Discuss at least 2 capital budgeting techniques and how your company can benefit from the use of these tools.
  • Compare your approaches to other students’ responses. How were they similar or different? Why might you use the different approaches shared by your classmates?

Week 4:

You are writing a book on how to evaluate performance evaluation for a company.

Respond to the following in a minimum of 175 words:

  • Think about some of the influences and measures of company performance that you read about this week.
  • Explain the use of return on assets (ROA) and the price-to-earnings (PE) ratio in evaluating the performance of a company.
  • Write about how to calculate ROA and PE ratio and how market conditions can affect these metrics.
  • Share the ROA and PE ratio for a company you are familiar with. What do these metrics tell you about the financial health of the company?

Week 5:

You are the Chief Risk Officer for a company and you’ve been tasked with identifying the areas where your company is exposed to systematic and unsystematic risks.

Respond to the following in a minimum of 175 words:

  • Based on the information you learned this week, what approach would you take in explaining how systematic and unsystematic risks affect risk planning?
  • Describe your approach.
  • Name 3 or more systematic or unsystematic risks your company might face.
  • Think of some implications if your company decides not to be proactive and plan for these risks. 

Week 6:

You are a business consultant who works with new business owners. A new client wants to start a bakery and seeks your advice.

Respond to the following in a minimum of 175 words:

  • Based on what you’ve learned from the readings, discuss the advantages and disadvantages of using venture capital as startup funding for a business.
  • Describe what approach you would recommend for the client by using the information you researched.
  • How does your approach differ from the recommendations of your classmates?
  • How might your recommendation change after reading your classmates recommendations?


Discussion Posts

Discussion Posts

Week 1

Without a market, the aim of a business is unrealistic. Every market tends to bring producers or entrepreneurs in a close range to potential buyers with the willingness to purchase the products or services they need. Agreeably, both the primary and secondary markets have a meticulous role in the success of a business. While activities within the primary market largely depend on the secondary market’s progress, the former allows companies, governments, and other entities to sell new bonds and stock to the public for the first time through Initial Public Offering (Tomal, 2019). Besides, most primary markets create an enabling environment for the expansion or start of a business. Successively, secondary markets allow investors to trade existing bonds and stocks among themselves.

Categorized under the financial markets, the primary and secondary markets significantly influence resources within a country’s economy. For instance, in real estate management and valuation, primary markets allow companies to interact with investors directly; resultantly, converging house prices (Tomal, 2019). On the other hand, the secondary market offers brokers an opportunity to enter the market to aid investors in trading securities. In that case, my real estate consultancy company can enjoy access to a large customer base. For primary markets, the organization’s performance in market capitalization and stock listing is affected by the rise in share price value. Equally, secondary markets improve allocative effectiveness; hence, determinate.

Week 2

Performance metrics helps owners and managers understand the progress of their business and offers investors an opportunity to examine the probability of success for a particular company of interest. In explaining the return on equity (ROE) to the senior management, return on shareholder equity translates to the results obtained after dividing a company’s profit by the total shareholders’ equity, according to Emerson & Nabatchi (2015). Markedly, since ROE is obtained by multiplying the return on net assets by a hundred gives the overall percentage, the higher the values, the more money returns to investors. Conversely, earnings per share (EPS) equals the company’s profitability. Noteworthy, it is calculated by dividing the company’s profit by the outstanding shares.

As previously mentioned, the higher the percentage of ROE, the more money returns to investors. Similarly, when the EPS percentage is high, it means the company’s profitability is also great. Based on findings after evaluating the productivity of collaborative governance regimes, Emerson & Nabatchi (2015) believe that managers can gauge the profit-generating efficiency of a business to determine whether it is worth the investment. Interestingly, EPS helps stakeholders evaluate the amount of money a company makes for each share of its stock. Amenably, investors are willing to pay more for companies with higher profits compared to share prices. Therefore, both these ratios benefit owners and investors in terms of every party’s objective.

                                        Annual Net Income

                        ROE =   

                                        Shareholder’s Equity

Walmart’s ROE:                  14.88m

                                                              * 100% = 18.27%


                                                   Net Income                       7.6b 

             Ford’s EPS =                                                   =                     = 1.91b

                                      Weighted Common Shares            3.98b

Week 3

The indispensable role of capital budgeting for businesses surpasses the overall culmination goal; to make a profit. Therefore, in that case, the various techniques of capital budgeting help actualize goals in various aspects of the organization; this is as described by Al-Mutairi, Naser & Saeid (2018). Markedly, to deliver on any project, budgeting techniques impact the daily unfolding of business activities. An emphasis on accountability and measurability, essential for profitability, facilitates the planning and execution of projects straightforwardly. Examples of typical capital budgeting techniques I would use for upcoming projects include payback period, profitability index, net present value, internal rate of return, and accounting rate (Al-Mutairi, Naser & Saeid, 2018). Payback period capital budgeting is often preferred due to its simplicity to calculate and understand.

As the name suggests, the payback period technique allows a company to calculate the amount of time taken to recover the principal investment. Like other capital budgeting techniques, the payback period provides business owners with means to measure the long term economic and financial profitability of a project. Correspondingly, the net value approach is another most preferred capital budgeting technique. Due to its accuracy and reliability, the net present value illustrates how an organization can benefit from a project. All projects with a positive net present value are considered worth investing in, while negative values are rejected.

Week 4

Both business and financial experts agree that evaluating company performance is critical for its overall growth in the long term. Ideally, most entrepreneurs regularly evaluate their businesses to safeguard against the financial, market, and shareholder problems that may arise in an advanced juncture (Agustina & Ardiansari, 2019). Undoubtedly, the best influences and measures for evaluating a business’s different parameters to determine its performance are the net margin ratios. Some examples of influences and measures affecting company performance include delving into Business Financial Statements, assessing customer satisfaction, morale and corporate culture, competition, employee and customer relationship, and overall job satisfaction. The return on assets ratio (ROA) is one of the many net margin ratios used to determine a business’s profitability. As an indicator of how well a company has utilized its assets, ROA compares the overall revenue to a similar company’s total assets or with the previous performance.

Like its counterpart, Price-to-Earnings (P/E) ratio helps analysts determine the relative value of a company’s share. Further, it indicates how much the market is willing to pay for a particular stock based on past or future earnings (Agustina & Ardiansari, 2019). ROA is obtained by dividing the business’s net income by the total assets. At the same time, P/E is calculated by dividing the overall market value price per share by the company’s earnings per share. Noteworthy, when market conditions such as a rise in stock, alongside earnings per share remaining constant, the P/E ratio inevitably rises. For instance, fluctuating market conditions offer more buyers willing to acquire particular security, raising the ROA over time.

                                             Net Income

            ROA =   

                                        Average Total Assets

Exxon’s ROE:                      $19.7b

                                                              * 100% = 5.8%

                                            $ 81.44b

                                         Market Value per Share            $91.09b 

      Walmart’s PE =                                                      =                     = 20.70x

                                            Earnings per Share                 $4.40b

Week 5

The significance of risk planning management cannot be understated. On average, risk planning enables a business to recognize threats likely to deter the means for better decision making and overall performance. For starters, both the systematic and unsystematic risk affects the overall risk planning process; this is according to Soleimany Amiri & Gerveie (2017). Systematic risk refers to probable losses associated with the aggregate income or the broad market returns, while unsystematic risk involves possible losses occurring within a particular industry or security. Systematic risks, compared to unsystematic risks, are uncontrollable. The size and number of factors involved facilitate this condition. Unsystematic risk is controllable since most of the factors are internal and exist for a relatively short time. The approach utilized in this case constitutes comparing the two types of risks to explain how they influence risk planning. This approach focuses on the many securities affected by systematic risk due to the ubiquitous effect of interest rate fluctuations by the country’s Central Bank.

Conversely, the approach dictates how unsystematic risk affects the stock and securities of a specific company. For instance, Netflix has become a more popular and volatile organization offering better management risk plans for its stakeholders (Soleimany Amiri & Gerveie, 2017). Some examples of systematic risk that my company could encounter include inflation, population trends, natural disaster, currency fluctuations, political instability, and tax reforms. On the other hand, entry of a new competitor into the market, product return by customers, change in policies regulating the industry, business possessing fraudulent financial statements, and the company becoming a target for employee walkout are unsystematic examples of risks. Undoubtedly, the immediate effect of failing to prepare a risk plan can inevitably result in the collapse of a business. Without a risk plan, my organization could fail to recognize potential threats that can be turned into actionable steps. Further, the company could lose market share, increase theft, and break employee engagement if risks are not identified.

Week 6

The initial steps of starting a business involve taking into account the best funding source that could guarantee its success in the long run. Ko & Lee (2016) argue that to come up with the best strategic decision for a startup business, the owner must consider the most appropriate startup funding based on their business’s motive. Examples include small business loans, angel investment, self-funding, equity crowdfunding, and venture capital. Mentioning but a few, some of the advantages of venture capital include the opportunity to grow and expand the company, the absence of obligated repayment, easy access, trustworthy venture capitalists, guidance, and expertise, alongside offering building networks connections.

On the contrary, venture capitalists’ disadvantages include under-valuation, intermittency during fund release, prolonged delays by the venture capitalists, involves a tedious process approaching venture capitalists, and may sometimes require high Return on Original Investment (Ko & Lee, 2016). In most cases, experts and analysts have agreed that the best approach for funding a new business entails self-funding as the first and best choice, followed by funding from friends and family or enrolling for small business loans. Necessary to note, self-funding as a classical way of financing a new business offers great flexibility, cost management opportunities, lower costs, and increased financial control.


Tomal, M. (2019). House Price Convergence on the Primary and Secondary Markets: Evidence from Polish Provincial Capitals. Real Estate Management and Valuation27(4), 62-73.

Emerson, K., & Nabatchi, T. (2015). Evaluating the productivity of collaborative governance regimes: A performance matrix. Public Performance & Management Review38(4), 717-747.

Al-Mutairi, A., Naser, K., & Saeid, M. (2018). Capital budgeting practices by non-financial companies listed on Kuwait Stock Exchange (KSE). Cogent Economics & Finance6(1), 1468232.

Agustina, D., & Ardiansari, A. (2019). The Effect of Good Corporate Governance towards Company Financial Performance. Management Analysis Journal8(2), 123-134.

Soleimany Amiri, G., & Gerveie, P. (2017). The impact of managerial overconfidence on systematic and unsystematic risk.

Ko, Y. H., & Lee, H. S. (2016). Interrelation between Start-up Characteristic and Venture Capital Investment Portfolio for Strategic Decision. Asia-Pacific Journal of Business Venturing and Entrepreneurship11(2), 63-73.