Exam (elaborations)
WGU Financial Management for IT Professionals C928 Task 1
- Course
- WGU C928 (C928)
- Institution
- Western Governors University
WGU Financial Management for IT Professionals C928 Task 1
[Show more]
Seller
Follow
Content preview
Task 1: Reading and Understanding FinancialStatements
Course: Financial Management for IT Professionals — C928
Date: 08/04/2024
, A. See attached both completed Figures A1.1 (Income Statement) and A1.2
(Balance Sheet)
B. Analyze the current ratio measure of liquidity for Sparkit:
1. In order to determine financial well-being within a company it is
necessary to have a full view of a company’s liquidity. “Liquidity means
the extent to which a business has cash and other assets that could
readily be turned into cash” (Blackstaff, 2012). Management in general
should understand what liquidity means, how it is calculated and how it
affects the company. To determine liquidity, it is done via two ratios via
the current ratio- current assets and liabilities. The current assets
essentially fund current liabilities.
The Sparkit financial manager and CIO must know the company’s
Current Ratio to be able to set budgets for each department. Without
this knowledge, the company can potentially over budget or under
budget which can negatively impact the financial statement affecting
not only the company but also stakeholders. Utilizing this information
will help both the financial manager and CIO understand the overall
performance of the business and have the ability to compare year over
year.
2. Sparkit’s CIO and IT manager must understand the current ratio to
ensure that any new projects can be adequately funded without
bringing the company into the red (debt). This in turn can influence the
decisions made by the IT department. The Current Ratio must be in
good standing for there to be enough cash to be able to put towards
projects for the organization.
The goal is to have a high current ratio, this means Sparkit would
have enough cash to fund a project. The higher the ratio the more
qualified the business is to pay off the liability/debt. Ensuring the ratio
is high will then indicate good financial health of the company. Having
this knowledge by the CIO and IT management team will allow them to
make better decisions on projects and their agenda while maintaining
the company’s financial health and not going over budget.
3. Provide the current ratio values for Fiscal Year 2 from Figure A1.2:
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller melissarosario1. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $5.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75632 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now