Marketing homework help
Marketing homework help. Week 2 – Discussion Forum 2
Required Resources
Text
Block, S. B., Hirt, G. A., & Danielson, B. R. (2019). Foundations of financial management (17th ed.). Retrieved from https://www.vitalsource.com/
- Chapter 4: Financial Forecasting
- Chapter 5: Operating and Financial Leverage
Recommended Resources
Articles
Rao, D. (2018, July 12). Why bottom up forecasting can improve your top-line predictions (Links to an external site.). Forbes. Retrieved from https://www.forbes.com/sites/dileeprao/2018/07/12/why-bottom-up-forecasting-can-improve-your-top-line-predictions/#8d095384c3ae
- This article provides information about financial forecasting and may assist you in your Financial Forecasting discussion forum this week.
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Shah, A. (2018, November 27). Basic forecasting of revenues for unit-based businesses, a Chipotle example (Links to an external site.). Forbes. Retrieved from https://www.forbes.com/sites/alapshah/2018/11/27/basic-forecasting-of-revenues-for-unit-based-businesses-using-chipotle-as-an-example/#5d7e1b5e5be8
- This article provides information about financial forecasting and may assist you in your Financial Forecasting discussion forum this week.
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Multimedia
Jackson, B. [Brandon Jackson]. (2011, May 25). Financial leverage explained (Links to an external site.) [Video file]. Retrieved from https://youtu.be/RE47rGfHSTo
- This video provides details about financial leverage and may assist you in your Financial Leverage discussion forum this week. This video has closed captioning and a transcript.
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Nelson, T. [Thomas Nelson]. (2015, October 18). Pro forma business statements part one (Links to an external site.) [Video file]. Retrieved from https://youtu.be/NbY2O7IuFZA
- This video provides details about pro formal financial statements and may assist you in your Week 2 Homework Problems assignment and Week 2 Quiz this week. This video has closed captioning and a transcript.
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INSTRUCTION
Prior to beginning work on this discussion, read Chapter 5: Operating and Financial Leverage in your textbook.
As you explored in your textbook, financial leverage refers to the amount of debt used in the capital structure of a business. The degree of financial leverage measures the effect of a change in the earnings per share (EPS) of the company that occurs because of a percent change in the earnings before interest and taxes (EBIT).
List some of the benefits and limitations of financial leverage when it comes to profitability. Then, explain the factors a company should consider when deciding which type of leverage plan (i.e., leveraged or conservative) it should follow.