Financial Statement Project
Use the attached financial statements and the company's main corporate web-site (not the retail web-site) to answer the following questions:
1. What type of business is each company? How do you know this? What things in industry or the economy are impacting the operations of this company?
2. Compare 2-3 accounts on the balance sheet between the companies. Discuss the accounts and what they mean.
3. Compare 2-3 accounts on the income statement between the companies. Discuss the accounts and what they mean.
4. What key items from these financial statements do you feel are important for an interested person to learn about? Hint: Level of liabilities vs. equity, net income or loss, gross profit. Along with this, how would you explain the importance of these financial statements to a friend who hasn't had accounting before?
5. Compute and discuss the following ratios. Did the ratios or percentages improve from the previous year or decline? Do you see any trends in the financial statements that may cause these ratios to improve or decline?
Current Ratio - Current Assets/Current Liabilities
Return on Assets - Net Income/Total Assets
Return on Equity - Net Income/Total Equity
Common-sized analysis - (% of sales or % of assets) (These are completed in the attached financial statements - you will just need to evaluate). How does the gross profit percentage compare to the net profit percentage? Would you expect these to be different? Why?
Horizontal Analysis - (year-to-year trends)(These are completed in the attached financial statements - you will just need to evaluate). Do you feel the companies are improving or declining?
5. Overall, which company do you think is performing better? List two to three reasons why you think this.
Go to the discussion board and post your answers to these questions. Read two classmates responses and reply.
Attachment:- Assignment Files.rar