Enterprise Risk Management and Moat Strength

Congratulations! You have just gotten the opportunity of a lifetime to work as a senior financial advisor for
Warren Buffett. You will be responsible for conducting financial analyses on two companies Mr. Buffett is
reviewing NVIDIA (NASDAQ: NVDA) and Intel (NASDAQ: INTC) and providing recommendations for
action to the CFOs of those companies.
Instructions
In this assignment, you will evaluate several risk scenarios and make recommendations on how to position
the company for success by putting in place “reasonable” protections against downsides. To prepare for
the assignment: (1) download and review the latest annual reports for both companies from the Investor
Relations page of each company’s website; (2) read the Shareholder Letter and the Risks section
carefully, and (3) read the Morningstar Analyst Reports with particular emphasis on the Moat and Risk
sections.
A. Complete the Assignment 1 Worksheet to create risk profiles for both companies. The guidance
for this is found on pages 27-34 of The CFO Guidebook.
B. Summarize your Analysis and Recommendations by addressing the following questions:
i. Where is each company in its corporate lifecycle (startup, growth, maturity, or decline)?
Explain.
ii. Based on your review of the analysts’ reports and the 10-K reports, which company
appears to have more risk? Why?
iii. Which categories of risk pose the greatest threat to each organization? Why?
iv. Which company has the stronger economic moat? Explain.
v. For the company that has the weaker economic moat, what two risk factors should they
prioritize to improve their risk mitigation and strengthen their competitive advantage?
Make specific reference to the applicable risk management tools discussed on pages 35-
68 of The CFO Guidebook.