Question

Go to www.sec.gov and obtain WorldCom’s Form 10- K405 for 2001. Using the income statement found on page F- 2 and the balance sheet found on page F- 3 of the 10- K405 form:
a. Prepare a common- size balance sheet and in-come statement for years 2000 and 2001.
b. Compute the following financial ratios for years 2000 and 2001:
Profitability
• Gross margin percent
• Return on sales
• Return on assets
• Return on equity
Efficiency
• Total asset turnover
• Accounts receivable turnover
• Accounts receivable days Leverage
• Debt to assets (including minority interest and preferred)
• Equity to assets
• Debt to equity
• Equity multiplier Liquidity
• Current ratio
• Acid test (quick) ratio
• Net working capital
Equity
• Book value per share
• Earnings per share
• Price to earnings
c. Does your analysis raise any questions that might lead to a fraud hypothesis? Explain.



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  • CreatedMarch 04, 2015
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