1. User Story: Calculate the Weighted Average Cost of Capital (WACC)
– Precondition: The company has gathered all the necessary financial data, including the cost of debt and equity, as well as the weightings of each component.
– Post condition: The WACC is calculated accurately, providing a benchmark for evaluating the company’s financial performance.
– Potential business benefit: By knowing the WACC, the company can determine if its investments are generating returns higher than the cost of capital, helping to make informed financial decisions.
– Processes impacted: Financial analysis, investment evaluation, and capital budgeting.
– User Story description: As a financial analyst, I want to be able to calculate the WACC accurately, as it provides a vital measure for evaluating the company’s financial performance. By inputting the cost of debt and equity, along with their respective weightings, the system should automatically calculate the WACC.
– Key Roles Involved: Financial analyst, finance manager.
– Data Objects description: Cost of debt, cost of equity, weightings of debt and equity.
– Key metrics involved: WACC.
2. User Story: Evaluate the Return on Investment (ROI) for a specific project
– Precondition: The company has identified a specific project and gathered all the necessary financial data, including the initial investment and projected cash flows.
– Post condition: The ROI for the project is calculated accurately, providing insight into the project’s profitability.
– Potential business benefit: By evaluating the ROI, the company can determine if the project is generating returns higher than the cost of capital, helping to prioritize investments and allocate resources effectively.
– Processes impacted: Project evaluation, investment decision-making.
– User Story description: As a project manager, I want to be able to calculate the ROI for a specific project accurately. By inputting the initial investment and projected cash flows, the system should automatically calculate the ROI, providing valuable information for decision-making.
– Key Roles Involved: Project manager, finance manager.
– Data Objects description: Initial investment, projected cash flows.
– Key metrics involved: ROI.
3. User Story: Assess the Economic Value Added (EVA) for the company
– Precondition: The company has gathered all the necessary financial data, including the net operating profit after tax (NOPAT) and the cost of capital.
– Post condition: The EVA for the company is calculated accurately, providing insight into the company’s value creation.
– Potential business benefit: By evaluating the EVA, the company can determine if it is generating returns higher than the cost of capital, helping to measure its value creation and make strategic decisions.
– Processes impacted: Financial analysis, performance evaluation.
– User Story description: As a finance manager, I want to be able to assess the EVA for the company accurately. By inputting the NOPAT and the cost of capital, the system should automatically calculate the EVA, providing valuable information for performance evaluation.
– Key Roles Involved: Finance manager, executive team.
– Data Objects description: NOPAT, cost of capital.
– Key metrics involved: EVA.
4. User Story: Analyze the Return on Equity (ROE) for the company
– Precondition: The company has gathered all the necessary financial data, including net income and shareholders’ equity.
– Post condition: The ROE for the company is calculated accurately, providing insight into the company’s profitability.
– Potential business benefit: By analyzing the ROE, the company can determine how efficiently it is utilizing shareholders’ equity to generate profits, helping to make informed financial decisions.
– Processes impacted: Financial analysis, performance evaluation.
– User Story description: As a financial analyst, I want to be able to analyze the ROE for the company accurately. By inputting the net income and shareholders’ equity, the system should automatically calculate the ROE, providing valuable information for performance evaluation.
– Key Roles Involved: Financial analyst, finance manager.
– Data Objects description: Net income, shareholders’ equity.
– Key metrics involved: ROE.
5. User Story: Monitor the Return on Assets (ROA) for the company
– Precondition: The company has gathered all the necessary financial data, including net income and total assets.
– Post condition: The ROA for the company is calculated accurately, providing insight into the company’s efficiency in generating profits from its assets.
– Potential business benefit: By monitoring the ROA, the company can assess how effectively it is utilizing its assets to generate profits, helping to identify areas for improvement and optimize resource allocation.
– Processes impacted: Financial analysis, performance evaluation.
– User Story description: As a finance manager, I want to be able to monitor the ROA for the company accurately. By inputting the net income and total assets, the system should automatically calculate the ROA, providing valuable information for performance evaluation.
– Key Roles Involved: Finance manager, executive team.
– Data Objects description: Net income, total assets.
– Key metrics involved: ROA.
6. User Story: Calculate the Cost of Debt
– Precondition: The company has gathered all the necessary financial data, including the interest expense and the outstanding debt.
– Post condition: The cost of debt is calculated accurately, providing insight into the company’s borrowing costs.
– Potential business benefit: By calculating the cost of debt, the company can assess the financial impact of its debt obligations, helping to make informed financing decisions and negotiate better borrowing terms.
– Processes impacted: Financial analysis, capital structure management.
– User Story description: As a finance manager, I want to be able to calculate the cost of debt accurately. By inputting the interest expense and the outstanding debt, the system should automatically calculate the cost of debt, providing valuable information for financial analysis.
– Key Roles Involved: Finance manager, treasury team.
– Data Objects description: Interest expense, outstanding debt.
– Key metrics involved: Cost of debt.
7. User Story: Evaluate the Cost of Equity
– Precondition: The company has gathered all the necessary financial data, including the dividend payments and the market value of equity.
– Post condition: The cost of equity is evaluated accurately, providing insight into the company’s required return on equity.
– Potential business benefit: By evaluating the cost of equity, the company can determine the return expected by shareholders, helping to make informed decisions regarding equity financing and valuation.
– Processes impacted: Financial analysis, capital structure management.
– User Story description: As a financial analyst, I want to be able to evaluate the cost of equity accurately. By inputting the dividend payments and the market value of equity, the system should automatically calculate the cost of equity, providing valuable information for financial analysis.
– Key Roles Involved: Financial analyst, finance manager.
– Data Objects description: Dividend payments, market value of equity.
– Key metrics involved: Cost of equity.
8. User Story: Assess the Weightings of Debt and Equity in the capital structure
– Precondition: The company has gathered all the necessary financial data, including the book value of debt and equity.
– Post condition: The weightings of debt and equity in the capital structure are assessed accurately, providing insight into the company’s financing mix.
– Potential business benefit: By assessing the weightings of debt and equity, the company can determine its optimal capital structure, helping to minimize the cost of capital and maximize shareholder value.
– Processes impacted: Financial analysis, capital structure management.
– User Story description: As a finance manager, I want to be able to assess the weightings of debt and equity in the capital structure accurately. By inputting the book value of debt and equity, the system should automatically calculate the weightings, providing valuable information for financial analysis.
– Key Roles Involved: Finance manager, executive team.
– Data Objects description: Book value of debt, book value of equity.
– Key metrics involved: Weightings of debt and equity.
9. User Story: Calculate the Net Present Value (NPV) of a project
– Precondition: The company has gathered all the necessary financial data, including the projected cash flows and the discount rate.
– Post condition: The NPV of the project is calculated accurately, providing insight into its profitability.
– Potential business benefit: By calculating the NPV, the company can determine if the project’s cash flows are generating returns higher than the discount rate, helping to make informed investment decisions.
– Processes impacted: Investment evaluation, financial analysis.
– User Story description: As an investment analyst, I want to be able to calculate the NPV of a project accurately. By inputting the projected cash flows and the discount rate, the system should automatically calculate the NPV, providing valuable information for investment evaluation.
– Key Roles Involved: Investment analyst, finance manager.
– Data Objects description: Projected cash flows, discount rate.
– Key metrics involved: NPV.
10. User Story: Evaluate the Internal Rate of Return (IRR) of a project
– Precondition: The company has gathered all the necessary financial data, including the projected cash flows.
– Post condition: The IRR of the project is evaluated accurately, providing insight into its profitability.
– Potential business benefit: By evaluating the IRR, the company can determine the discount rate at which the project’s cash flows break even, helping to assess its viability and compare it with other investment opportunities.
– Processes impacted: Investment evaluation, financial analysis.
– User Story description: As a finance manager, I want to be able to evaluate the IRR of a project accurately. By inputting the projected cash flows, the system should automatically calculate the IRR, providing valuable information for investment evaluation.
– Key Roles Involved: Finance manager, executive team.
– Data Objects description: Projected cash flows.
– Key metrics involved: IRR.