ACC 205 Week Two Exercise Assignment Revenue and Expenses

ACC 205 Week Two Exercise Assignment Revenue and Expenses

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Week Two Exercise Assignment

Revenue and Expenses

  1. Recognition of concepts. Ron Carroll operates a small company that books enter­tainers for theaters, parties, conventions, and so forth. The company’s fiscal year ends on June 30. Consider the following items and classify each as either (1) pre­paid expense, (2) unearned revenue, (3) accrued expense, (4) accrued revenue, or (5) none of the foregoing.
  2. Amounts paid on June 30 for a 1-year insurance policy
  3. Professional fees earned but not billed as of June 30
  4. Repairs to the firm’s copy machine, incurred and paid in June
  5. An advance payment from a client for a performance next month at a convention
  6. The payment in part (d) from the client’s point of view
  7. Interest owed on the company’s bank loan, to be paid in early July
  8. The bank loan payable in part (f)
  9. Office supplies on hand at year-end
  1. Analysis of prepaid account balance. The following information relates to Action Sign Company for 20X2:
Insurance expense $4,350
Prepaid insurance, December 31, 20X2 1,900
Cash outlays for insurance during 20X2 6,200

Compute the balance in the Prepaid Insurance account on January 1, 20X2.

  1. Understanding the closing process. Examine the following list of accounts:
Interest Payable Accumulated Depreciation: Equipment
Alex Kenzy, Drawing Accounts Payable
Service Revenue Cash
Accounts Receivable Supplies Expense
Interest Expense

Which of the preceding accounts

  1. appear on a post-closing trial balance?
  2. are commonly known as temporary, or nominal, accounts?
  3. generate a debit to Income Summary in the closing process?
  4. are closed to the capital account in the closing process?
  5. Adjusting entries and financial statements. The following information pertains to Fixation Enterprises:
  • The company previously collected $1,500 as an advance payment for services to be rendered in the future. By the end of December, one third of this amount had been earned.
  • Fixation provided $2,500 of services to Artech Corporation; no billing had been made by December 31.
  • Salaries owed to employees at year-end amounted to $1,650.
  • The Supplies account revealed a balance of $8,800, yet only $3,300 of supplies were actually on hand at the end of the period.
  • The company paid $18,000 on October 1 of the current year to Vantage Property Management. The payment was for 6 months’ rent of Fixation’s headquarters, beginning on November 1.

Fixation’s accounting year ends on December 31.

Instructions

Analyze the five preceding cases individually and determine the following:

  1. The type of adjusting entry needed at year-end (Use the following codes: A, adjust­ment of a prepaid expense; B, adjustment of an unearned revenue; C, adjustment to record an accrued expense; or D, adjustment to record an accrued revenue.)
  2. The year-end journal entry to adjust the accounts
  3. The income statement impact of each adjustment (e.g., increases total revenues by $500)
  1. Adjusting entries. You have been retained to examine the records of Kathy’s Day Care Center as of December 31, 20X3, the close of the current reporting period. In the course of your examination, you discover the following:
  • On January 1, 20X3, the Supplies account had a balance of $2,350. During the year, $5,520 worth of supplies was purchased, and a balance of $1,620 remained unused on December 31.
  • Unrecorded interest owed to the center totaled $275 as of December 31.
  • All clients pay tuition in advance, and their payments are credited to the Unearned Tuition Revenue account. The account was credited for $75,500 on August 31. With the exception of $15,500 all amounts were for the current semester ending on December 31.
  • Depreciation on the school’s van was $3,000 for the year.
  • On August 1, the center began to pay rent in 6-month installments of $21,000. Kathy wrote a check to the owner of the building and recorded the check in Pre­paid Rent, a new account.
  • Two salaried employees earn $400 each for a 5-day week. The employees are paid every Friday, and December 31 falls on a Thursday.
  • Kathy’s Day Care paid insurance premiums as follows, each time debiting Pre­paid Insurance:
Date Paid Policy No. Length of Policy Amount
Feb. 1, 20X2 1033MCM19 1 year $540
Jan. 1, 20X3 7952789HP 1 year 912
Aug. 1, 20X3 XQ943675ST 2 years 840

Instructions

The center’s accounts were last adjusted on December 31, 20X2. Prepare the adjusting entries necessary under the accrual basis of accounting.

  1. Bank reconciliation and entries. The following information was taken from the accounting records of Palmetto Company for the month of January:
Balance per bank $6,150
Balance per company records 3,580
Bank service charge for January 20
Deposits in transit 940
Interest on note collected by bank 100
Note collected by bank 1,000
NSF check returned by the bank with the bank statement 650
Outstanding checks 3,080

Instructions:

  1. Prepare Palmetto’s January bank reconciliation.
  2. Prepare any necessary journal entries for Palmetto.
  3. Direct write-off method. Harrisburg Company, which began business in early 20X7, reported $40,000 of accounts receivable on the December 31, 20X7, balance sheet. Included in this amount was  $550 for a sale made to Tom Mattingly in July. On January 4, 20X8, the company learned that Mattingly had filed for personal bankruptcy. Harrisburg uses the direct write-off method to account for uncollectibles.
  1. Prepare the journal entry needed to write off Mattingly’s account.
  2. Comment on the ability of the direct write-off method to value receivables on the year-end balance sheet.
  3. Allowance method: estimation and balance sheet disclosure. The following pre-­adjusted information for the Maverick Company is available on December 31:
  • Accounts receivable $107,000
  • Allowance for uncollectible accounts 5,400 (credit balance)
  • Credit sales 250,000
  1. Prepare the journal entries necessary to record Maverick’s uncollectible accounts expense under each of the following assumptions:

(1) Uncollectible accounts are estimated to be 5% of Credit Sales.

(2) Uncollectible accounts are estimated to be 14% of Accounts Receivable.

  1. How would Maverick’s Accounts Receivable appear on the December 31 balance sheet under assumption (1) of part (a)?
  2. How would Maverick’s Accounts Receivable appear on the December 31 balance sheet under assumption (2) of part (a)?
  1. Direct write-off and allowance methods: matching approach. The December 31, 20X2, year-end trial balance of Targa Company revealed the following account information:
Debits Credits
Accounts Receivable $252,000
Allowance for Uncollectible Accounts $ 3,000
Sales 855,000

Instructions

  1. Determine the adjusting entry for bad debts under each of the following condi­tions:

(1) An aging schedule indicates that $12,420 of accounts receivable will be uncollectible.

(2) Uncollectible accounts are estimated at 2% of net sales.

  1. On January 19, 20X3, Targa learned that House Company, a customer, had declared bankruptcy. Present the proper entry to write off House’s $950 balance using the allowance method.
  2. Repeat the requirement in part (b), using the direct write-off method.
  3. In light of the House bankruptcy, examine the allowance and direct write-off methods in terms of their ability to properly match revenues and expenses.
  1. Allowance method: analysis of receivables. At a January 20X2 meeting, the presi­dent of Sonic Sound directed the sales staff “to move some product this year.” The president noted that the credit evaluation department was being disbanded be­cause it had restricted the company’s growth. Credit decisions would now be made by the sales staff.

By the end of the year, Sonic had generated significant gains in sales, and the president was very pleased. The following data were provided by the accounting department:

20X2 20X1
Sales $23,987,000 $8,423,000
Accounts Receivable, 12/31 12,444,000 1,056,000
Allowance for Uncollectible Accounts, 12/31 ? 23,000 cr.

The $12,444,000 receivables balance was aged as follows:

Age of Receivable Amount Percentage of Accounts Expected to Be Collected
Under 31 days $5,321,000 99%
31260 days 3,890,000 90
61290 days 1,067,000 80
Over 90 days 2,166,000 60

Assume that no accounts were written off during 20X2.

Instructions

  1. Estimate the amount of Uncollectible Accounts as of December 31, 20X2.
  2. What is the company’s Uncollectible Accounts expense for 20X2?
  3. Compute the net realizable value of Accounts Receivable at the end of 20X1 and 20X2.
  4. Compute the net realizable value at the end of 20X1 and 20X2 as a percentage of respective year-end receivables balances. Analyze your findings and comment on the president’s decision to close the credit evaluation department.
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ACC 205 Week Four Exercise Assignment Liability

ACC 205 Week Four Exercise Assignment Liability

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Week Four Exercise Assignment

Liability

  1. Partner investments; journal entriesThe LP partnership was formed on January 1, 19X7, by investments from Bill Levy and Marv Parcells. Levy contributed $30,000 cash and $80,000 of land. Parcells contributed cash of $50,000 and equipment with a value of $20,000.
  1. Prepare the journal entries needed to record the investments of Levy and Parcells.
  1. Payroll accounting. Assume that the following tax rates and payroll information pertain to Brookhaven Publishing:
  • Social Security taxes: 6% on the first $55,000 earned
  • Medicare taxes: 1.5% on the first $130,000 earned
  • Federal income taxes withheld from wages: $7,500
  • State income taxes: 5% of gross earnings
  • Insurance withholdings: 1% of gross earnings
  • State unemployment taxes: 5.4% on the first $7,000 earned
  • Federal unemployment taxes: 0.8% on the first $7,000 earned

The company incurred a salary expense of $50,000 during February. All employees had earned less than $5,000 by month-end.

  1. Prepare the necessary entry to record Brookhaven’s February payroll. The entry will include deductions for the following:
  • Social Security taxes
  • Medicare taxes
  • Federal income taxes withheld
  • State income taxes
  • Insurance withholdings
  1. Prepare the journal entry to record Brookhaven’s payroll tax expense. The entry will include the following:
  • Matching Social Security taxes
  • Matching Medicare taxes
  • State unemployment taxes
  • Federal unemployment taxes
  1. Current liabilities: entries and disclosure. A review of selected financial activities of Visconti’s during 20XX disclosed the following:
12/1 Borrowed $20,000 from the First City Bank by signing a 3- month, 15% note payable. Interest and principal are due at maturity.
2/10 Established a warranty liability for the XY-80, a new product. Sales are expected to total 1,000 units during the month. Past experience with similar products indicates that 2% of the units will require repair, with warranty costs averaging $27 per unit.
12/22 Purchased $16,000 of merchandise on account from Oregon Company, terms 2/10, n/30.
12/26 Borrowed $5,000 from First City Bank; signed a note payable due in 60 days.
12/31 Repaired six XY-80s during the month at a total cost of $162.
12/31 Accrued 3 days of salaries at a total cost of $1,400.

Instructions

  1. Prepare journal entries to record the transactions.
  2. Prepare adjusting entries on October 31 to record accrued interest.
  3. Prepare the Current Liability section of Red Bank’s balance sheet as of October 31. Assume that the Accounts Payable account totals $203,600 on this date.
  1. Issuance of stock: organization costs. Snowbound Corporation was incorporated in July. The firm’s charter authorized the sale of 200,000 shares of $10 par-value common stock. The following transactions occurred during the year:
7/1: Sold 45,000 shares of common stock to investors for $18 per share. Cash was collected and the shares were issued.
8/11 Sold 20,000 shares to investors for $22 per share. Cash was collected and the shares were issued.

9/1   Declared a cash dividend on 9/1 for $1.00 a share for shareholders on record 10/1 with payment being made on 11/1.

Instructions

  1. Prepare journal entries for the two stock issues.
  2. Prepare journal entries for the cash dividend declaration and payment.
  1. Notes payable. Red Bank Enterprises was involved in the following transactions during the fiscal year ending October 31:
8/2: Borrowed $75,000 from the Bank of Kingsville by signing a 120-day note.
8/20: Issued a $40,000 note to Harris Motors for the purchase of a $40,000 de­livery truck. The note is due in 180 days and carries a 12% interest rate.
9/10: Purchased merchandise from Pans Enterprises in the amount of $15,000. Issued a 30-day, 12% note in settlement of the balance owed.
9/11: Issued a $60,000 note to Datatex Equipment in settlement of an overdue account payable of the same amount. The note is due in 30 days and car­ries a 14% interest rate.
10/10: The note to Pans Enterprises was paid in full.

ACC 205 Week Five Exercise Assignment Financial Ratios

ACC 205 Week Five Exercise Assignment Financial Ratios

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Week Five Exercise Assignment

Financial Ratios

 

  1. Liquidity ratiosEdison, Stagg, and Thornton have the following financial information at the close of business on July 10:
Edison Stagg Thornton
Cash $4,000 $2,500 $1,000
Short-term investments 3,000 2,500 2,000
Accounts receivable 2,000 2,500 3,000
Inventory 1,000 2,500 4,000
Prepaid expenses 800 800 800
Accounts payable 200 200 200
Notes payable: short-term 3,100 3,100 3,100
Accrued payables 300 300 300
Long-term liabilities 3,800 3,800 3,800
  1. Compute the current and quick ratios for each of the three companies. (Round calculations to two decimal places.) Which firm is the most liquid? Why?
  1. Computation and evaluation of activity ratiosThe following data relate to Alaska Products, Inc:
19X5 19X4
Net credit sales $832,000 $760,000
Cost of goods sold 440,000 350,000
Cash, Dec. 31 125,000 110,000
Average Accounts receivable 180,000 140,000
Average Inventory 70,000 50,000
Accounts payable, Dec. 31 115,000 108,000
  1. Compute the accounts receivable and inventory turnover ratios for 19X5. Alaska rounds all calculations to two decimal places.
  1. Profitability ratios, trading on the equityDigital Relay has both preferred and common stock outstanding. The com­pany reported the following information for 19X7:

 

Net sales $1,500,000
Interest expense 120,000
Income tax expense 80,000
Preferred dividends 25,000
Net income 130,000
Average assets 1,100,000
Average common stockholders’ equity 400,000
  1. Compute the gross profit margin ratio, the return on equity and the return on assets, rounding calculations to two decimal places.
  2. Does the firm have positive or negative financial leverage? Briefly ex­plain.
  1. Horizontal analysis. Mary Lynn Corporation has been operating for several years. Selected data from the 20X1 and 20X2 financial statements follow.
20X2 20X1
Current Assets $ 76,000 $ 80,000
Property, Plant, and Equipment (net) 99,000 90,000
Intangibles 25,000 50,000
Current Liabilities 40,800 48,000
Long-Term Liabilities 143,000 160,000
Stockholders’ Equity 16,200 12,000
Net Sales 500,000 500,000
Cost of Goods Sold 332,500 350,000
Operating Expenses 93,500 85,000

Prepare a horizontal analysis for 20X1 and 20X2. Briefly comment on the results of your work.

  1. Vertical analysis. Mary Lynn Corporation has been operating for several years. Selected data from the 20X1 and 20X2 financial statements follow.
20X2 20X1
Current Assets $ 76,000 $ 80,000
Property, Plant, and Equipment (net) 99,000 90,000
Intangibles 25,000 50,000
Current Liabilities 40,800 48,000
Long-Term Liabilities 143,000 160,000
Stockholders’ Equity 16,200 12,000
Net Sales 500,000 500,000
Cost of Goods Sold 332,500 350,000
Operating Expenses 93,500 85,000

Prepare a vertical analysis for 20X1 and 20X2. Briefly comment on the results of your work.

  1. Ratio computation. The financial statements of the Lone Pine Company follow.
LONE PINE COMPANY

Comparative Balance Sheets

December 31, 20X2 and 20X1 ($000 Omitted)

20X2 20X1
Assets
Current Assets
Cash and Short-Term Investments $ 400 $ 600
Accounts Receivable (net) 3,000 2,400
Inventories 2,000 2,200
Total Current Assets $5,400 $5,200
Property, Plant, and Equipment
Land $1,700 $ 600
Buildings and Equipment (net) 1,500 1,000
Total Property, Plant, and Equipment $3,200 $1,600
Total Assets $8,600 $6,800
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts Payable $1,800 $1,700
Notes Payable 1,100 1,900
Total Current Liabilities $2,900 $3,600
Long-Term Liabilities
Bonds Payable 4,100 2,100
Total Liabilities $7,000 $5,700
Stockholders’ Equity
Common Stock $ 200 $ 200
Retained Earnings 1,400 900
Total Stockholders’ Equity $1,600 $1,100
Total Liabilities and Stockholders’ Equity $8,600 $6,800
LONE PINE COMPANY

Statement of Income and Retained Earnings

For the Year Ending December 31,20X2 ($000 Omitted)

Net Sales* $36,000
Less: Cost of Goods Sold $20,000
Selling Expense 6,000
Administrative Expense 4,000
Interest Expense 400
Income Tax Expense                  2,000 32,400
Net Income $ 3,600
Retained Earnings, Jan. 1 900
                                                                 $ 4,500
Cash Dividends Declared and Paid 3,100
Retained Earnings, Dec. 31 $ 1,400
*All sales are on account.

Instructions

Compute the following items for Lone Pine Company for 20X2, rounding all calcu­lations to two decimal places when necessary:

  1. Quick ratio
  2. Current ratio
  3. Inventory-turnover ratio
  4. Accounts-receivable-turnover ratio
  5. Return-on-assets ratio
  6. Net-profit-margin ratio
  7. Return-on-common-stockholders’ equity
  8. Debt-to-total assets
  9. Number of times that interest is earned
  10. Dividend payout rate

ACC 205 Week 3 Exercise Assignment Inventory

ACC 205 Week 3 Exercise Assignment Inventory

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Week Three Exercise Assignment

Inventory

  1. Specific identification method. Boston Galleries uses the specific identification method for inventory valuation. Inventory information for several oil paintings follows.
                                        Painting                      Cost
1/2 Beginning inventory Woods $11,000
4/19 Purchase Sunset 21,800
6/7 Purchase Earth 31,200
12/16 Purchase Moon 4,000

Woods and Moon were sold during the year for a total of $35,000. Determine the firm’s

  1. cost of goods sold.
  2. gross profit.
  3. ending inventory.
  4. Inventory valuation methods: basic computations. The January beginning inven­tory of the White Company consisted of 300 units costing $40 each. During the first quarter, purchases were:

Date                Quantity         Cost

1/15               700                 $45

1/31               1200               $48

2/12               800                 $46

2/27               650                 $51

Sales during the first quarter were.

Date                Sold

1/19               500

2/2                 600

2/13               500

2/28               100

The White Company uses a perpetual inventory system.

Using the White Company data, fill in the following chart to compare the results obtained under the FIFO, LIFO, and weighted-average inventory methods.

FIFO     LIFO Weighted Average
 

Goods available for sale

   $ $ $
Ending inventory, March 31
Cost of goods sold
  1. Perpetual inventory system: journal entries. At the beginning of 20X3, Beehler Company implemented a computerized perpetual inventory system. The following transactions occurred:
  • Purchases on account: 500 units @$4 =  $2,000
  • Sales on account: 300 units @ $5 = $1,500
  • Purchases on account: 600 units @$5 =  $3,000
  • Sales on account: 300 units @ $5 = $1,500
  1. Prepare journal entries for the above purchases and sales.
  2. Calculate the balance in the firm’s Inventory account.
  1. Inventory valuation methods: computations and concepts. Wave Riders Surfboard Company began business on January 1 of the current year. Below are the transactions for the year

:

1/3: Purchase 100 boards  @$125
3/17: Sold 50 boards @ $250
4/3: Purchase 200 boards  @$135
5/17: Sold 75 boards @ $250
6/3: Purchase 100 boards  @$145
1/3: Purchase 100 boards  @$155
3/17: Sold 300 boards @ $250
1/3: Purchase 100 boards  @$140

Wave Riders uses a perpetual inventory system.

Instructions

  1. Calculate cost of goods sold, ending inventory, and gross profit under each of the following inventory valuation methods:
  • First-in, first-out
  • Last-in, first-out
  • Weighted average
  1. Which of the three methods would be chosen if management’s goal is to

(1) produce an up-to-date inventory valuation on the balance sheet?

(2) approximate the physical flow of a sand and gravel dealer?

  1. Depreciation methods. Betsy Ross Enterprises purchased a delivery van for $30,000 in January 20X7. The van was estimated to have a service life of 5 years and a resid­ual value of $6,000. The company is planning to drive the van 20,000 miles annually. Compute depreciation expense for 20X8 by using each of the following methods:
  2. Units-of-output, assuming 17,000 miles were driven during 20X8
  3. Straight-line
  4. Double-declining-balance
  5. Depreciation computations. Alpha Alpha Alpha, a college fraternity, purchased a new heavy-duty washing machine on January 1, 20X3. The machine, which cost $1,000, had an estimated residual value of $100 and an estimated service life of 4 years (1,800 washing cycles). Calculate the following:
  6. The machine’s book value on December 31, 20X5, assuming use of the straight-line depreciation method
  7. Depreciation expense for 20X4, assuming use of the units-of-output depreciation method. Actual washing cycles in 20X4 totaled 500.
  8. Accumulated depreciation on December 31, 20X5, assuming use of the double-declining-balance depreciation method.
  1. Depreciation computations: change in estimate. Aussie Imports purchased a specialized piece of machinery for $50,000 on January 1, 20X3. At the time of acquisition, the machine was estimated to have a service life of 5 years (25,000 operating hours) and a residual value of $5,000. During the 5 years of operations (20X3 – 20X7), the machine was used for 5,100, 4,800, 3,200, 6,000, and 5,900 hours, respectively.

Instructions

  1. Compute depreciation for 20X3 – 20X7 by using the following methods: straight line, units of output, and double-declining-balance.
  2. On January 1, 20X5, management shortened the remaining service life of the machine to 20 months. Assuming use of the straight-line method, compute the company’s depreciation expense for 20X5.
  3. Briefly describe what you would have done differently in part (a) if Aussie Imports had paid $47,800 for the machinery rather than $50,000 In addition, assume that the company incurred $800 of freight charges $1,400 for machine setup and testing, and $300 for insurance during the first year of use.

ACC 205 Final Paper Public Company

ACC 205 Final Paper Public Company

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Final Paper

The final assignment for this course is a Final Paper. The purpose of the Final Paper is for you to culminate the learning achieved in the course. The Final Project represents 29% of the overall course grade.

Focus of the Final Paper

Write a five- to seven-page financial statement analysis of a public company, formatted according to APA style as outlined in the Ashford Writing Center. In this analysis, you will discuss the financial health of this company with the ultimate goal of making a recommendation to other investors. Your paper should consist of the following sections:

introduction, company overview, horizontal analysis, ratio analysis, final recommendation, and conclusions. Your paper needs to include a minimum of two scholarly resources in addition to the textbook as references.

Here is a breakdown of the sections within the body of the assignment:

Company Overview

Provide a brief overview of your company (one to two paragraphs at most). What industry is it in? What are its main products or services? Who are its competitors?

Horizontal Analysis of Income Statement and Balance Sheet

Prepare a three-year, horizontal analysis of the income statement and balance sheet of your selected company. Discuss the importance and meaning of horizontal analysis. Discuss both the positive and negative trends presented in your company.

Ratio Analysis

Calculate the current ratio, quick ratio, cash to current liabilities ratio, over a two-year period. Discuss and interpret the ratios that you calculated. Discuss potential liquidity issues based on your calculations of the current and quick ratios.

Are there any factors that could be erroneously influencing the results of the ratios? Discuss liquidity issues of competitive companies within the same industry.

Recommendation

Based on your analysis, would you recommend an individual invest in this company? What strengths do you see? What risks do you see? It is perfectly acceptable to state that you would recommend avoiding this company, as long as you provide support for your position.

Writing the Final Paper

The Final Paper:

  1. Must be five to seven double-spaced pages in length, and formatted according to APA style as outlined in the Ashford Writing Center.
  2. Must include a title page with the following:
  3. Title of paper
  4. Student’s name
  5. Course name and number
  6. Instructor’s name
  7. Date submitted
  8. Must begin with an introductory paragraph that has a succinct thesis statement.
  9. Must address the topic of the paper with critical thought.
  10. Must end with a conclusion that reaffirms your thesis.
  11. Must document all sources in APA style, as outlined in the Ashford Writing Center.
  12. Must include a separate reference page, formatted according to APA style as outlined in the Ashford Writing Center.

ACC 205 Final Paper Company Analysis of Starbucks

ACC 205 Final Paper Company Analysis of Starbucks

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Final Paper

The final assignment for this course is a Final Paper. The purpose of the Final Paper is for you to culminate the learning achieved in the course. The Final Project represents 29% of the overall course grade.

Focus of the Final Paper

Write a five- to seven-page financial statement analysis of a public company, formatted according to APA style as outlined in the Ashford Writing Center. In this analysis, you will discuss the financial health of this company with the ultimate goal of making a recommendation to other investors. Your paper should consist of the following sections:

introduction, company overview, horizontal analysis, ratio analysis, final recommendation, and conclusions. Your paper needs to include a minimum of two scholarly resources in addition to the textbook as references.

Here is a breakdown of the sections within the body of the assignment:

Company Overview

Provide a brief overview of your company (one to two paragraphs at most). What industry is it in? What are its main products or services? Who are its competitors?

Horizontal Analysis of Income Statement and Balance Sheet

Prepare a three-year, horizontal analysis of the income statement and balance sheet of your selected company. Discuss the importance and meaning of horizontal analysis. Discuss both the positive and negative trends presented in your company.

Ratio Analysis

Calculate the current ratio, quick ratio, cash to current liabilities ratio, over a two-year period. Discuss and interpret the ratios that you calculated. Discuss potential liquidity issues based on your calculations of the current and quick ratios.

Are there any factors that could be erroneously influencing the results of the ratios? Discuss liquidity issues of competitive companies within the same industry.

Recommendation

Based on your analysis, would you recommend an individual invest in this company? What strengths do you see? What risks do you see? It is perfectly acceptable to state that you would recommend avoiding this company, as long as you provide support for your position.

Writing the Final Paper

The Final Paper:

  1. Must be five to seven double-spaced pages in length, and formatted according to APA style as outlined in the Ashford Writing Center.
  2. Must include a title page with the following:
  3. Title of paper
  4. Student’s name
  5. Course name and number
  6. Instructor’s name
  7. Date submitted
  8. Must begin with an introductory paragraph that has a succinct thesis statement.
  9. Must address the topic of the paper with critical thought.
  10. Must end with a conclusion that reaffirms your thesis.
  11. Must document all sources in APA style, as outlined in the Ashford Writing Center.
  12. Must include a separate reference page, formatted according to APA style as outlined in the Ashford Writing Center.