Analysis of the Scenario
A. Interpret the macroeconomic events described in the scenario to determine their likely impacts to capital market conditions. Cite specific
evidence and principles discussed in the course that support your claims.
B. Draw connections between your analysis of the events and the more specific likely impacts to your own firm and their strategic objectives. Cite
specific evidence and principles discussed in the course that support your claims.
C. Assess the potential for the macroeconomic events to pose financial risks to your firm.
i. First accurately identify the risks. For example, how might your firm be negatively impacted by fluctuations in the money supply?
Provide a specific example to illustrate each identified risk.
ii. Then measure (i.e., quantify) the risks using appropriate financial tools. For example, consider calculating your firm’s debt-to-capital
ratio, debt/equity ratio, interest coverage ratio and their degree of combined leverage.