Financial Report Project:
Annual Report Project, Fall 2015 Overall Instructions and Chapter 1
RadioShack and Best Buy are competitors in the retail consumer electronics industry. RadioShack has been experiencing financial hardship, leading to it filing for chapter 11 bankruptcy protection on February 5, 2015. Since then RadioShack has won court approval to be purchased by Standard General LP.
This project will consist of preparing two reports.
Report 1:
a comparative financial analysis of RadioShack and Best Buy, for the years 2011 - 2013. What you will do is use analytical techniques to evaluate the relative financial health of both of these organizations. Will your analysis show that RadioShack was in greater financial trouble? We'll see.
Best Buy's balance sheets and income statements are on pages 56 and 57 of their 10-k. Best Buy's March 3, 2012 column is the fiscal year 2011 income statement, its February 2, 2013 column is its 2012 income statement, and its February 1, 2014 column is its 2013 income statement. Use those columns in your analysis. Best Buy shows two balance sheets. Its February 2, 2013 column is the 2012 balance sheet and its February 1, 2014 column is its 2013 balance sheet. RadioShack's income statements and balance sheets are on pages 37 and 39 of their 10-k, respectively.
The benefit of this analysis is to expose you to analytical techniques that will be useful in assessing the financial health of businesses. Industry averages are available to compare analyses with, but for this project all you need do is compare RadioShack with Best Buy.
You will be given instructions by chapter on the analyses to be performed. Your finished product is to be typed, logical, and easy to follow. Be careful not to have analyses split inappropriately by page breaks. Your final report should have all detailed analyses you are instructed to do, with an assessment made after each comparative analysis. Also, a summary is to be prepared, giving your final judgment of the relative financial health of RadioShack and Best Buy, giving reasons for your conclusion regarding the relative strengths of each organization. Your analyses are to be to the point and brief, easy to follow and understand.
Report 2:
a report on various disclosures in the 2013 RadioShack annual report. Please only refer to the 2013 annual report when answering questions for this part of the assignment. Questions will be posted weekly. You will be examining the financial statements (balance sheet, income statement, statement of shareholders' equity, and statement of cash flows) and the footnotes following those financial statements. You need not refer to any other material in the annual report. Your answers are to be typed, immediately below the question asked. They should be easy to understand and follow. They should not consist of numbers, alone. For example, if asked "What was the total current assets for RadioShack?" your answer should not simply be $1,333 million, instead your answer should be "Current assets for RadioShack for 2013 was $1,333 million, as reported on page 39." Include the page number from which the information was obtained.
Begin your paper with an executive summary of conclusions derived from Report 1. This executive summary is to be no longer than 1 page.
Both reports are to be prepared in one word document,
Annual Report Project, Fall 2015 Overall Instructions and Chapter 1
Report 1,Financial Analysis Questions?For both businesses, for the years 2011 - 2013, perform a trend analysis on Sales, Cost of sales, and gross profit (if gross margin is not shown, it is sales - cost of sales). The trend analysis shows the percentage change from year to year of the items. The formula I use for yearly change is (y2 - y1)/y1. Compare RadioShack and Best Buy performances based on this analysis.
Report 2,Financial Report Questions (For this report, you will need the financial statements and footnotes following the financial statements, and nothing else, for RadioShack 2013 annual report). Only RadioShack and 2013, nothing else.?Chapter 1 Questions
1. What are the beginning and ending page numbers beginning with the first financial statement shown and ending with the final footnote following the financial statements?
2. The purpose of footnotes is to explain and clarify items shown on the financial statements. Please list the number and name of each of the footnotes, as well as the page the footnote appears. For instance, the first footnote following the financial statements is usually named "Summary of significant accounting policies.