Please follow instructions carefully and read what needs to be in the paper, which is attached.
ACCT 0105003 – Principles of Accounting II
Fall 2015 – Financial Statement Analysis Project
The project will be a research paper which will require use of your research skills as well as your analytical abilities. You are to select a corporation you wish to analyze in conjunction with Chapter 15 (Financial Statement Analysis) of the textbook. You should obtain a copy of the company’s 2012 annual report from the website of the corporation you select. (You may wish to consider analyzing a company you would like to work for.) Keep in mind that the only portion of the annual report that you will need to print out to hand in are the financial statements. USE YOUR JUDGMENT WHEN PRINTING!!! IT IS NOT NECESSARY TO PRINT OUT THE ENTIRE ANNUAL REPORT!!!! If you have difficulty finding the annual report with financial statements, please come see me or contact me for assistance.
You will analyze the corporation you select using the skills acquired from studying Chapter 15. These should include horizontal, trend, vertical, and ratio analyses as indicated on the grading rubric. The research paper should analyze the selected corporation and discuss how it has performed over the last few years. You must also compare its financial performance to industry averages. While there are several sources for industry data, please use Bizstats.com (http://www.bizstats.com/industry-financials.php) for industry information. That site is free, easy to access/use, and should be sufficient for our purposes. It has common-size income statements, common-size balance sheets, and certain ratios for 249 industries for corporations and 148 industries for sole proprietorships. The current year available on the website is 2012. As noted above, please use 2012 information for the company you choose, even though it will not be the most recent year available on the company’s website. (The annual report for 2014 will probably be the most recent.) You would then be comparing the company’s 2012 information with industry information for the same year so comparisons will be more accurate than if using two different years. If you cannot find the 2012 information for the company, please see me before using a year other than 2012 as perhaps I can find the 2012 information on the company’s website; if not, then I will give you permission to use a different year. (If I do give you permission to use a different year, then note in your paper that the annual report for 2012 was not available so you are using 20XX for the company while comparing to industry averages for 2012 acknowledging that the comparison will not be completely accurate due to the discrepancies in the years being compared.) Print out and hand in the information (i.e., common-size income statement, common-size balance sheet, and ratios) on bizstats.com for the industry chosen.
Note that you must compute ALL the ratios given in chapter 15 even though you will not be able to compare all the ratios to the average for the industry. Bizstats.com only lists averages for approximately eight (8) ratios. You still need to calculate all ratios for your chosen company even though you can only compare eight to the industry averages. If you feel that a ratio is not applicable for the information you have, please verify that with me and so note in your paper if I agree.
In addition to submitting hard copies of the information on bizstats.com, please note the exact industry that you used on Bizstat.com in your paper. Be sure to properly reference all sources (including the company’s website and Bizstat.com) so you do not violate the Academic Honesty Policy of Westfield State University.
The final paper should be a minimum of 15 double-spaced typed pages with a 12 point font. The cover/title page and bibliography page should not be counted as part of the minimum 15 pages. The financial information (i.e., financial statements from the annual report) used for the company and the information printed from bizstats.com should be handed in with the completed paper. That information should not be counted as part of the page count of the completed research paper. The paper will be graded on the basis of both content and appearance, so be creative (i.e., use graphs, exhibits, etc.)!! The grading rubric is posted on the course PLATO site and a copy will also be provided in class. You should review the rubric to ensure you are meeting the requirements for the project. The project is due at the beginning of class on 11/12/15. No late projects will be accepted!!!! Graded projects will be returned on or before 12/10/15.
Note that the analyses (horizontal, trend, vertical and ratio) that you complete should be included in the minimum page count including graphs you create. The financial information that you used to prepare those analyses (e.g., the financial statements) and the bizstats.com print-outs are NOT to be included in the page count. However, that information does need to be handed in with your paper so I can check your calculations. Your commentary included with your analyses of the data (i.e., included with the horizontal, trend, vertical, and ratio analyses) should be as long as necessary to ADEQUATELY discuss what you found and your comparison to industry averages. DO NOT TELL ME HOW TO CALCULATE EVERYTHING (e.g., “To calculate return on common stockholders’ equity, you first take net income and subtract …” – I assure you, I already know how to do horizontal analysis, etc. You may certainly (and should) include the formulas for the ratios with the numbers for your company but not detailed verbiage on the calculation itself, as noted above, to try to increase your page count. J
Principles of Accounting II (ACCT 0105)
Financial Statement Analysis Project
Grading Rubric Type of Analysis Chosen Company Industry
Horizontal Analysis – Income Statement
Horizontal Analysis – Balance Sheet
Income from Continuing Operations
Vertical Analysis – Income Statement
Vertical Analysis – Balance Sheet
Acid-Test (Quick) Ratio
Days’ Sales in Inventory
Gross Profit Percentage
Accounts Receivable Turnover
Days’ Sales in Receivables
Debt to Equity Ratio
Profit Margin Ratio
Rate of Return on Total Assets
Asset Turnover Ratio
Rate of Return on Common Stockholders’
Earnings per Share
Price Earnings (P/E) Ratio
Use of Graphs or Charts
Essay/Discussion of Results
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