Financial Statement

Financial Statement Analysis

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Week Eight: Financial Statement Analysis
	Details	Due	Points
Objective	1    1.1  Apply ratio, vertical, and horizontal analyses to financial statements.
CheckPoint SCF Analysis	Complete BYP 13-5 in your text.	Friday	30
Individual Problems	Resources: Ch. 13 & 14 of Financial Accounting Complete Problems 13-7A and 14-5 (templates available) Submit as a Microsoft® Excel or Word® document.	Sunday	100

Week Nine: Ethics
	Details	Due	Points
Objectives	2    2.1  Identify situations that might lead to unethical accounting practices. 2.2  Examine the effects of unethical behavior and the Sarbanes-Oxley Act on financial statements.
Reading	Read the “Fraud and Internal Control” section in Ch. 7 of Financial Accounting.
Participation	Participate in class discussion.	All week	10
Capstone Discussion Question	Respond to the capstone discussion question. ·      Identify situations that might lead to unethical practices and behavior in accounting. Do you think the Sarbanes-Oxley Act has made a difference in the ethical behavior of companies regarding their financial accounting? Why or why not?	Post by Wed.	20
Individual Ratio Analysis Memo	Resources: Financial Statements Browse the Internet to acquire a copy of the most recent annual report for a U.S. publicly traded company. The following corporations are acceptable – if you wish to use any other company you must receive my approval first.  Target Macy’s Home Depot or Lowe’s Yum or Darden Restaurants Walgreens or CVS Krispy Kreme Amazon Locate the company’s most recent annual report (you can typically find this report at the company’s Web site at the bottom of the site under “Investors”. You will use this information (as well as some research you will conduct on the Web to find the information listed below.  Yahoo Finance at http://finance.yahoo.com/ can be a helpful resource for this project as well. Access the information contained in your selected organization’s balance sheet and income statement to calculate the following: Liquidity ratios Current ratio Acid-test, or quick, ratio Receivables turnover Inventory turnover (you would need to select a company that sells inventory for this purpose) Profitability ratios Asset turnover Profit margin Return on assets Return on common stockholders’ equity Solvency ratios Debt to total assets Times interest earned Show your calculations for each ratio.  Explain what the ratio results mean.  For example, if you calculate inventory turns and your number is 6, please interpret this number (this means that inventory is ‘turned’ six times a year (or that it takes around 60 days to sell inventory items).  Simply providing a number without interpreting what that number means is not enough.  Create a horizontal and vertical analysis for the balance sheet and the income statement. Write a 700- to 1,050-word memo to the CEO of your selected organization in which you discuss your findings from your ratio calculations and your horizontal and vertical analysis. In your memo, address the following questions: What do the liquidity, profitability, and solvency ratios reveal about the financial position of the company? Which users may be interested in each type of ratio? What does the collected data reveal about the performance and position of the company? Format your memo consistent with APA guidelines.  Use Times New Roman 12 pt double-spaced.  Ensure that you present your analysis in a format so that I can readily see all the results (a table would be the best approach).  Note that these results would not be considered toward the memo word count.

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