Overview
Please review all three Articles, and provide a general review of the students response to the article. Three Articles: 100 - 150 words per article.
Article One
To successfully retire with $2 million by the age of 65, beginning your savings at age 30 will require setting aside approximately $21,171 each year, assuming a steady 5% annual return on your investments (Brigham & Ehrhardt, 2022). This figure is derived from the principles of the time value of money (TVM), which guides us in determining how much we need to save annually to meet our financial goals. While this calculation provides a great starting point, it's important to recognize its limitations. It operates under the assumption that the interest rate will remain unchanged over the next 36 years—something that is unlikely due to market fluctuations. Additionally, it does not factor in inflation, changes in income, or unexpected life events that may impact your capacity to save (Brigham & Ehrhardt, 2022). It also assumes that you will consistently make annual contributions. To enhance your chances of reaching your retirement goal, consider investing in a diversified portfolio. This approach can help manage risk and allow you to adjust for changing market conditions. Regularly reviewing your progress and increasing your contributions as your income grows can also be highly beneficial. Moreover, collaborating with a financial advisor can lead you to a more tailored and flexible savings strategy, making it easier to stay on track toward your financial aspirations.
Reference:
Brigham, E. F., & Ehrhardt, M. C. (2022). Financial management: Theory & practice (16th ed.). Cengage Learning.
Article Two
To reach your goal of saving $2 million by age 65, you’ll need to save a set amount every year starting at age 30. Since you have 36 years to save and expect a 5% return on your money, we can use a basic time value of money formula to figure out how much you need to save each year.
Using the formula for the future value of an annuity, the result shows that you would need to save about $21,188 every year. This means making 36 equal payments—one each year—into your retirement account, and letting the interest grow over time.
However, this plan has some risks. The biggest one is that we are assuming the interest rate will stay the same (5%) for the next 36 years, which is unlikely. Inflation could also reduce the real value of $2 million by the time you retire. And if you miss any payments or have poor investment performance, you may fall short of your goal.
To stay on track, you could start saving early, increase your savings over time, and regularly check your progress. It might also help to work with a financial advisor and adjust your investments as your situation changes.
Reference: Ross, S. A., Westerfield, R., & Jordan, B. D. (2019). Essentials of Corporate Finance (10th ed.). McGraw-Hill Education.
Article Three
The firm that I am choosing is Kroger. For performance, I am choosing the return on assets because this ratio indicates how efficiently Kroger is utilizing its assets to generate profit. As of Thursday, June 26, 2025, Kroger (KR) stock has a return on assets (roa) of 5.08% (n.d.). Compared to its 12-month average of 4.76%, it has improved (n.d.). This improvement in return on assets indicated that Kroger has been more efficient in generating profit from its assets in the most recent period. Analyzing trends in return on assets over a longer time can provide a more comprehensive understanding of Kroger's financial performance and efficiency. Kroger activity ratios, such as return on equity and return on investments, should be considered to asses the company's overall financial health and sustainability. Comparing Kroger's performance to industry benchmarks can provide further insights into its competitive position and potential risks. As for financing and liquidity ratio's it would be beneficial to evaluate Kroger's debt-to-equity ratio and current ratio to understand its ability to meet short-term obligations and manage long-term obligations effectively. By analyzing these financial metrics, investors can gain a more holistic view of Kroger's financial strength and stability in the market.
Kroger's strength lies in its strong market position as one of the largest grocery retailers in the U.S. with a wide network of stores and a diverse range of products. Its revenue streams are from both retail and digital channels. However, weaknesses may include debt levels that are high and potential vulnerability to shifts in consumer preferences or competitive pressure. Overall, Kroger performs adequately based on its debt-to-equity ratio and current ratio, indicating a balanced approach to managing its financial obligations and liquidity. They will need ongoing monitoring of these ratios to ensure continued financial health and stability.
Kroger (KR) return on assets (ROA) Chart. (n.d.-a). https://www.financecharts.com/stocks/KR/growth/roa