Summative Assessment: Financial Management Strategies

Refer to the 3M Company – Good Corporate Citizen case study in an attachment. Respond to the following in a total of 350 to 525 words:

 

Research the current P/E ratio of the company mentioned in the case, 3M.

  • Compare 3M to another firm in the same industry.

 

Some critics of socially responsible companies claim that socially responsible companies lack significant profit margins.

  • Compare the net profit margins of the two companies you researched above.

 

Imagine you are a senior financial manager at a large publicly traded company.

  • Apply your capital budgeting decision-making skills to select projects that are lower in NPV, but higher in sustainable value regarding ESG.
  • Justify your decisions to the board of directors for your firm and to shareholders at the annual shareholder meeting.

 

There are additional risks that can come from implementing ESG strategies in capital budgeting decision-making.

  • List some additional risks that may not be apparent when considering implementing ESG into capital budgeting decision-making process.
  • If you were a senior financial manager at a public firm, how would you mitigate these additional or potential risk involved with implementing ESG into your capital budgeting process?

 

Stock market investors emphasize financial results and the maximization of shareholder value.

  • Evaluate whether it makes sense for a company to be socially responsible.
  • Analyze whether companies can be socially responsible and orientated toward shareholder value at the same time.

 

Apply the financial management strategies you have learned in the course to accomplish the goal of being socially responsible and oriented toward shareholder value.