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BUS 650 Evaluation of Corporate Performance

Finance
Ashford University
16 pages
Shared May 2025

Explores corporate performance evaluation techniques and financial analysis methods.

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Running head: Evaluation of Corporate Performance 1 BUS 650 Evaluation of Corporate Performance Based on a review of Bridgepoint Education’s financial statements, including the income statement, balance sheet, and pro forma projections, analyze the company's financial health over the past few years. Discuss its liquidity, profitability, and the impact of external factors, such as accreditation issues, on its financial performance. Additionally, using a 10% growth assumption in sales and Cost of Goods Sold (COGS), provide a forecast for the next two years. Calculate the return on equity (ROE) using the DuPont system, evaluate the company's economic value added (EVA), and assess its financial policies, offering recommendations on the purchase of its stock." Word count requirement : 1,500 - 2,000 words.
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Evaluation of Corporate Performance : Bridgepoint Education Managerial Finance BUS 6 50
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Evaluation of Corporate Performance 3 Thesis statement: In this paper I will review Bridgepoint education using data from its a nnual report. My report will include a review of Bridgepoint Education (BPI) financial statements, balance sheet, income statement for the next 2 years assuming growth of 10% in sales and Cost of Goods Sold (COGS) as well as a ratio analysis of its liquidity, financial leverage, asset management, profitability and market value. In addition , I will calculate the return o n e quity (ROE) using the DuPont system , assess the economic value added by assessing management performance and evaluate the company’s financial polices and provide my recommendation s on the purchase of company stock. Bridgepoint Education (BPI ) which is currently celebrating its 10 year anniversary was actually incorporated in May of 1999 under the name TeleUniversity, Inc . The company which is based out of San Diego, California changed their name to Bridgepoint Education in February 2004. Bridgepoint education was founded by Andrew Clark, current CEO along with several executives from University of Phoenix. Bridgepoint education, wh ose main business is postsecondary education, offers Associates, Bachelor’s , Master’s and doctoral programs both on campus and online at their institutions , Ashford Univer sity and University of the Rockies. Bridgepoint education prides itself in the usage of technology and a company tag line is “ innovative solutions to advance learning ”, fits well into their company mission and services they provide. On lineeducation is a relatively new sector and companies such as Bridgepoint ha ve experienced major growth over the past few years. Bridgepoint education competes with several for profit postsecondary schools as well as with the local nonprofit state academic institutions for
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Evaluation of Corporate Performance 4 potential students. The financials for Bridgepoint Education have fluctuated greatly over the past few years as have that of most in this sector and below I will discuss in detail some of findings from a review of their financials and how it has affected the company. Financial Statement review Bridgepoint Education is a service provider of postsecondary education to two academic institutions, Ashford University and University of the Rockies ( http://ir.bridgepointeducation.com/files/doc_financials/2012/2012%2010 - K.pdf retrieved 02/24/2014 ) . Based on the data listed on Bridgepoint educations financials, the company has zero debt , low fixed assets and is structured to operate on an asset light model ( http://ir.bridgepointeducation.com/files/doc_financials/2012/2012%2010 - K.pdf retrieved 02/24/2014 ) . Bridgepoint Education position as a service provider of postsecondary education yields the company a high net profit margin and return on equity . Bridgepoint education currently has zero debt or scheduled liabilities, which provides the company great liquidity and a comfortable current ratio and quick ratio. According to Byrd, J., Hickman, K., & McPherson, M. (2013) current ratio or liquidity ratio is a liquidity measurement of a company’s ability to pay their short term obligations. The formula for current ratio: Current Ratio= Current Assets Current Liabilities Bridgepoint Education= Liquidity=2.069 Current Assets/ Current Liabilities 496,147/224,285