# MBA 520 Module Six Activity- forecasting financial statements using actual numbers and explaining the meaning of the analysis

MBA 520 Module Six Activity Guidelines and Rubric
Overview: For this task, you will practice forecasting financial statements using actual numbers and explain the meaning of the analysis.
Prompt: First, review the Module Six resources. Then revisit Chapter 10 in the textbook, which was assigned in Module Three. For this practice activity, we will
use the
End of Chapter exercise from pp. 703–704: “10.11 Identifying the Cost Structure and Projecting Gross Margins for Capital-Intensive, Cyclical Businesses.”
This includes the AK Steel case study. After reading the case study, answer the questions below in the
Module Six Activity Worksheet. Refer to the textbook and
other course materials to support your responses.
A.
Cost Structure: Compute the cost structure for each firm. You will need to calculate three variables for both companies:
1. Variable Cost per Dollar of Sales = Change in Cost of Products Sold / Change in Sales
2. Total Variable Cost = Variable Cost per Dollar of Sales * Sales
3. Total Fixed Cost = Total Cost of Product Sold – Total Variable Cost
B.
Structure of Manufacturing Cost: In one paragraph, compare the structure of manufacturing costs for each firm.
C.
Projected Financial Information: Compute the projected sales, cost of products sold, gross profit, and gross margin (gross profit as a percentage of sales)
of each firm for Year +1 through Year +5. Using the table in the Module Six Activity Worksheet is recommended.
D.
Gross Margin Comparison: In one to two paragraphs, explain why the levels and variability of the gross margin percentages differ for these two firms for
Year +1 through Year +5. Provide an example comparing the effect of the change in gross margin. (For example, if gross margin changed from 25% to
35%, what would it mean for each company?)
Rubric
Guidelines for Submission: Complete and submit the Module Six Activity Worksheet.

 Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Cost Structure Calculates the cost structure, including variable cost per dollar of sales, total variable cost, and total fixed cost for each company without any errors Calculates the cost structure, including variable cost per dollar of sales, total variable cost, and total fixed cost for each company, but there is one calculation error Calculates the cost structure, including variable cost per dollar of sales, total variable cost, and total fixed cost for each company, but there is more than one calculation error Does not calculate the cost structure, including variable cost per dollar of sales, total variable cost, and total fixed cost for each company 22.5 Structure of Manufacturing Cost Meets “Proficient” criteria and demonstrates a nuanced understanding of the financial impact of the structure of manufacturing cost Provides a complete, concise, and accurate analysis of the structure of manufacturing cost for each firm, and analysis is well supported by information from the course text and resources Provides an analysis of the structure of manufacturing costs for each firm, but the analysis is not concise, incomplete, or inaccurate, or is not supported by information from the course textbook and resources Does not provide an analysis of the structure of manufacturing cost for each firm 22.5

 Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value Projected Financial Information Computes the projected sales, costs of goods sold, gross profit, and gross margin for years 1–5 without any errors Computes the projected sales, costs of goods sold, gross profit, and gross margin for years 1–5, but there are 2–10 calculation errors Computes the projected sales, costs of goods sold, gross profit, and gross margin for years 1–5, but there are more than 10 calculation errors Does not compute the projected sales, costs of goods sold, gross profit, and gross margin for years 1–5 22.5 Gross Margin Comparison Meets “Proficient” criteria and provides multiple specific examples that illustrate the meaning of a change in gross margin Provides a complete, concise, and accurate explanation of why the levels and variability of the gross margin percentages differ for the two firms, and explanation is well supported by information from the course textbook and resources and contains a specific example that illustrates the meaning of a change in gross margin Provides an explanation of why the levels and variability of the gross margin percentages differ for the two firms, but the explanation is not concise, incomplete, or inaccurate, or is not well-supported by information from the course textbook and resources, or lacks a specific example that illustrates the meaning of a change in gross margin Does not provide an explanation of why the levels and variability of the gross margin percentages differ for the two firms 22.5 Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to read format Submission has no major errors related to citations, grammar, spelling, syntax, or organization Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas 10 Total 100%