ACC 101 FINANCIAL STATEMENT ANALYSIS PROJECT

Objective: to understand the importance and significance, of accounting information for making business decisions.

1.You are required to research selected financial information from one of the companies listed below. The financial information will be related to the chapter subject matter being studied in class. The student will get a better understanding of the relevance and importance of the subject matter and the story that the accounting records and statistics create of the financial position of the company.

No.	Name	Symbol
1	Target Corporation	TGT
2	Wal-Mart Stores, Inc.	WMT
3	Home Depot, Inc. (The)	HD
4	Lowe's Companies, Inc.	LOW
5	Nike	NKE
6	Adidas	ADDYY
7	Michael Kors	K

2,Download the two (2) most recent 10-K financial statements for the company. You need two (2) years of data.

Download the most recent 10-K financial statements.

Financial statements 10-K MUST be accessed through the SEC website: http://www.sec.gov/

a)Click on the COMPANY FILINGS link

b)Type in the Companys Name into the COMPANY NAME diagonal box, or type in the Companys Symbol into the FAST SEARCH diagonal box and hit SEARCH.

c)If you had search from the COMPANY NAME diagonal box, you will be prompted to click on the CIK link and then select the 10-K link under the FILINGS header. If you had searched from the FAST SEARCH diagonal box, you will be prompted directly to the FILINGS header and then select the 10-K link.

d)Select the INTERACTIVE DATA format and print out the Excel spreadsheet of the financial statements (Income Statements Balance Sheet, Statement of Cash Flow, and Statement of Owners Equity).

e)You can also access the selected companys 10-K information from http://www.finance.yahoo.com. You can search by the companys name or symbol.

3.Please conduct a thorough research on the company you had selected. Please provide the following information from the 10-K report:

I.Name of Company: _______________________________________________

II. Information about the company: What is the industry classification for the company?

Describe the nature of the companys business.

List the companys primary products or services (use brand names where available).

What is the address of the companys corporate headquarters?

What is the address of the companys Web site?

Give number of countries in which the company operates (list a few of the countries):

What were the companys revenues for the most recent fiscal year?

List the names of the companys Chairman, President, CEO and CFO, along with their age and length of time with the company.

III.Provide the following market data:

On what stock exchange is the companys stock traded?

What was the price of the companys stock at the end of one day during this past week?

Price: _______________________ Date: ______________________

What were the lowest and highest stock prices during the past year?

52-week low: __________________ 52-week high: _________________

IV. Obtain a copy of an article about the company. Attach a copy of the article.

Name of article: ______________________________________________

Source of article (name of magazine or newspaper, date, page numbers):

__________________________________________________________

Summarize the article. Use complete sentences and well-organized paragraphs. Your summary

should be no fewer than 100 words in length.

4. You would have completed chapter4 of the textbook at this stage of the course and you will now be tasked with interpreting the companys financial information. Remember, the roles of accountants are to analyze the economic event, records the financial activities, and communicates the financial information to the users of the financial statements.

V. THE BALANCE SHEET

Locate the companys balance sheet. Balance sheet date: __________________

The accounting equation is Assets = Liabilities + Stockholders Equity. Replacing the words in the accounting equation with dollar amounts, give the companys accounting equation at the end of the current and prior years.

Assets = Liabilities + Equity

	Assets	=	Liabilities	+	Equity
Year 1
Year 2

VI. THE INCOME STATEMENT

Locate the companys income statement.

What is the period covered by the income statement?_________________________

Calculate the companys net Profit/(Loss) for the Years 1 and 2

	Year 1	Year 2
Net Revenue
Cost of Goods Sold
Gross Profit
Operating Expenses
Net Profit

5. You would have completed chapters 5 and 6 of the textbook at the stage of the course and you will now be tasked with calculating and explaining the Horizontal and selected Ratio Analysis.

VII. Horizontal Analysis: Please select two (2) Income Statement and two (2) Balance Sheet accounts from the most recent and prior year financial. In the accompanied Excel spreadsheet please calculate the $ and % changes, then in your own word explain the changes. Your answer should include a comparison of the current and prior years analysis.

VIII. Ratio Analysis. In the accompanied Excel spreadsheet please calculate and interpret the selected ratio analysis. Your answer should include a comparison of the current and prior years analysis.

Project Deliverables and DUE DATES:

1.Item # 3 is due by TBD

2. Item # 4 is due by TBD

3. Item # 5 is due by TBD

Selected Ratios

Financial Statement Analysis

Profitability the ability to earn satisfactory income (profit)

Liquidity the ability to pay bills when due and meet unexpected cash needs.

Profitability Ratios

Profit Margin = Net Income/Net Revenues

This ratio shows the amount of income that was generated by each $1 of sales.

Asset turnover = Net Revenues/Average total assets

This ratio shows the amount of revenue generated by each $1 of assets.

Return on Assets = Net Income/Average Total assets

This ratio shows the amount of income generated by each $1 of assets.

PM X Assets T/O = ROA

Liquidity Ratios

Inventory Turnover = Cost Of Goods Sold/Average Inventory

This ratio shows the amount of times the company sold its inventory during the accounting period.

Receivable Turnover = Net sales/Average Account Receivable

This ratio shows the number of times the company collected its Accounts Receivable during the accounting period.

Supplemental financial ratios for assessing liquidity and operate asset mgt

Current ratios = Current Assets/Current Liabilities - How many times did total CA cover CL

Quick ratios = (Cash + Marketable Securities + Accounts Receivable) / Current Liabilities - How many times did current financial assets cover Current Liabilities.