Week 6
Financial Statement Analysis Paper Written Assignment
One basic method that an accountant can use to analyze the financial situation of a business is ratio
analysis. This can be a useful tool no matter the type of legal structure of the business and regardless of
whether ownership is public or private. To help assure the availability of the necessary data, though, this
assignment will be focused solely on a publicly traded company.
As an overview, you will choose a publicly traded company from a list provided at the end of this
assignment. Locate the company’s website, retrieve the latest company’s annual report from that site,
calculate specific ratios for the latest two fiscal years, and respond to a limited number of analysis
questions.
Please note that this entails far more than finding precalculated ratios from a website such as Yahoo!
Finance or Google Finance. If you desire, you can use such a site for a reasonableness check on the
results of your calculations, but any such comparisons should not be part of your resulting paper. Also,
you might not match exactly to their figures anyway because those may include quarterly updates.
The paper should be three to four double-spaced pages (not counting the cover page and bibliography).
The font size should be 12-point and the type can be Times New Roman, Verdana, or Arial.
Your paper should be properly cited using APA referencing style. This means that citations should be in a
bibliography and in the body of the paper wherever you refer to or directly quote any information or
terms from other sources.
Please submit your paper no later than midnight Sunday at the end of Week 6.
For the section showing the ratio calculations, provide appropriate details regarding the formula used,
the source of the data, and the resulting calculations. Although you are certainly welcome and
encouraged to use Excel to complete these tasks, copying and pasting from Excel into the Word
document is discouraged unless it can be done in a manner that is cosmetically appropriate.
The requirements for the ratio analysis section are as follows.
1. Compute the following for each of the two most recent years.
• Profit margin
• Return on shareholders’ equity
• Current ratio
• Interest coverage ratio
2. Document your work by properly citing items such as the following.
• The website for the company
• The web page link for the annual report
• The page number of the annual report
• Appropriate details of the calculations
The questions that should be addressed in the second section of the paper are as follows.
1. If you were an accountant for a potential vendor for this company, explain which of these ratios
would be of the most interest to you. Would there also be a second ratio of interest to you?
2. If you were an accountant for a potential investor in this company, explain which of these ratios
would be of the most interest to you. In your opinion, what other ratio or ratios beyond the
ones listed above should also be considered in an investment context?
3. What is your overall opinion of this company based on the limited analysis completed via the
four ratios? Feel free to mention any questions that you feel should still be considered in view of
the ratios or the changes from one year to the next.
Please also consider these suggestions for your success on this assignment.
o If you choose a company from the list and have any trouble finding its website, the annual
reports, or specific information, consider selecting a different company from the list instead.
o If the company has subsidiaries, be sure to use the consolidated financial statements.
o Be sure to use the financial statements rather than summaries elsewhere in the annual report.
List of companies (choose one):
Barnes & Noble, Inc.
Intuit Inc.
The Kroger Co.
Macy’s Inc.
Dell Inc.
Family Dollar Stores Inc.
Kodiak Oil & Gas Corp.
Tractor Supply Company
Verizon Communications Inc.
LMA: MSAC.ACCT601.Week6.Assignment
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Criteria
Ratings
Pts
Webex
Introduction
8.0 to >7.0 pts
15.0 to >0 pts
9.0 to >8.0 pts
Excellent
7.0 to >6.0 pts
Fair
6.0 to >5.0 pts
Poor
oftware
Good
Unacceptable
The paper
The paper
The paper does
not introduce the
The paper
thoroughly
introduces the
company, and
discusses the
mostly
introduces the
company, and
generally
discusses the
The paper only
remotely introduces
the company, and
discusses the role
introduces the
company, and
discusses the
role that the ratio
analysis will
provide in the
evaluation of
that the ratio
9.0 pts
analysis will provide
in the evaluation of
company, nor
does it discuss
the role that the
ratio analysis will
provide in the
evaluation of
company
performance.
role that the
ratio analysis
will provide in
the evaluation of
role that the ratio
analysis will
provide in the
evaluation of
company
performance in a
very limited manner.
company
performance in a
limited manner.
company
performance.
company
performance
Analysis
17.0 to >15.0 pts
15.0 to >13.0 pts
20.0 to >17.0 pts
Excellent
13.0 to >11.0 pts
Poor
11.0 to >0 pts
Unacceptable
Good
Fair
At least two of
the of the ratios
All four of the
ratios are
calculated
At least three of
the ratios are
calculated
properly based
are calculated
properly based
on the
Fewer than two of
the ratios are
calculated
properly based on
the information in
properly based
on the
on the
the financial
information in the
financial
All four of the
ratios are
calculated
properly based
on the
information in the
financial
statements. It
also details how
the ratios are
useful to both
investors and
creditors. Finally,
it provides a
general analysis
20.0 pts
statements. It
also details how
the ratios are
useful to both
investors and
creditors. Finally,
it provides a
thorough
Top
information in the
financial
statements. It
also provides
limited detail on
how the ratios
are useful to both
investors and
creditors. Finally,
it provides a
information in the
financial
statements. It
also provides
very limited detail
on how the ratios
are useful to both
investors and
creditors. Finally,
it provides a very
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statements. The
paper also does
not provide any
insight on how the
ratios are useful to
investors or
creditors. It
provides no
analysis of
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ratios.
Summary and
Conclusion
8.0 to >7.0 pts
7.0 to >6.0 pts
9.0 to >8.0 pts
Excellent
6.0 to >5.0 pts
Poor
5.0 to >0 pts
Unacceptable
Good
Fair
The paper
The paper
The paper
effectively
summarizes the
key points, and
provides a
conclusion
regarding
company
performance that
is based on a
thorough analysis
of the facts and
ratios in the
does not
summarize
key points,
and the
conclusion is
not presented.
9.0 pts
The paper
effectively
summarizes the
key points, and
provides a
conclusion
regarding
company
performance that
is based on an
analysis of the
facts and ratios in
the paper, with
minor error.
The paper does
not fully
summarize the
key points, and
the conclusion
regarding
company
performance is
not based on the
analysis of the
facts and ratios
presented in the
summarizes most
of the key points,
however, the
conclusion
regarding
company
performalice is
not fully based on
the analysis of the
facts and ratios
presented in the
paper.
paper.
paper.
Professionalism
6.0 to >5.0 pts
8.0 to >7.0 pts
Excellent
7.0 to >6.0 pts
Good
5.0 to >4.0 pts
Poor
4.0 to >0 pts
Unacceptable
Fair
The paper is
The paper is
somewhat
well
organized,
contains
correct
spelling and
grammar, and
has a
minimum of
three properly
formatted
references in
8.0 pts
The paper is
mostly
organized,
contains minor
spelling and
grammar errors,
has largely
formatted
references in
APA, and
includes an
overall impact.
organized, contains
a few errors in
spelling and
grammar, has a
few improperly
formatted
references in APA,
and/or includes a
partial overall
impact.
The paper is less
organized,
contains several
spelling and
grammar errors,
has a few
improperly
formatted
references in APA,
and/or includes a
very brief overall
impact
The paper is
unorganized,
contains many
spelling and
grammar errors,
has many
improperly
formatted
references in
APA, and does
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not include an
overall impact.
???. .
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contains
spelling and
spelling and
contains minor
spelling and
grammar errors,
has largely
formatted
grammar errors,
has a few
grammar errors,
has many
improperly
formatted
8.0 pts
a few errors in
spelling and
grammar, has a
few improperly
formatted
references in APA,
and/or includes a
partial overall
impact.
correct
spelling and
grammar, and
has a
minimum of
three properly
formatted
references in
improperly
formatted
references in APA,
and/or includes a
references in
APA, and
includes an
overall impact.
references in
APA, and does
not include an
very brief overall
impact.
overall impact
???.
g
0.0 pts
I
G MSAC.PLO-
A: Apply current
accounting
theory and
practice in a
wide range of
occupations.
threshold: 3.0 pts
4.0 pts
Excellent: The
paper provides a
proper and
detailed
application of
accounting
theory/practice
as it relates to
the occupation
and/or activities
requested in the
assignment.
3.0 pts
Good: The paper
provides a
mostly proper
and detailed
application of
accounting
theory/practice
as it relates to
the occupation
and/or activities
requested in the
assignment.
2.0 pts
Fair: The paper
provides a
limited
application of
accounting
theory/practice
as it relates to
the occupation
and/or
activities
requested in
the
assignment.
1.0 pts
Poor: The paper
provides an
extremely
limited
application of
accounting
theory/practice
as it relates to
the occupation
and/or activities
requested in the
assignment.
Unacceptable:
The paper
provides no
application of
accounting
theory/practice
as it relates to
the occupation
and/or
activities
requested in
the
assignment.
4.0 pts
Total Points: 50.0
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