Annual Report Project - Section 4
ACC-616-O500
Grand Canyon University
Dr. Elaine Gregory, CPA, CFE
ARP – Section 4: Liquidity and Coverage Ratio
https://www.loom.com/share/e8c277cf8c804dceb08c83c03a397523
We are called to witness the depth of both the wisdom and knowledge of God Romans 11:33
ARP Section 4 – Liquidity and Coverage Ratio Analysis - Overview
Prepare Liquidity and Coverage Ratio Analysis for your Chosen Company for 3 years. Select 3 each from the list you have in your assignment
Using the analysis, summarize strengths and weaknesses of your company.
What do the results indicate?
What might be possible reasons for the increase or decrease of ratios over the years?
What are the relationships within the accounts used in the ratio analysis and rationale of the results
Requirements – Process Step 1: Develop Analysis
In the Excel Spreadsheet you started in Assignment 3, there are two tabs for your calculations:
4-Liquidity Ratio
Current Ratio
Acid Test Ratio
Cash Ratio
Current cash debt coverage ratio
Working Capital
4-Coverage Ratio
Times Interest Earned
Debt ratio
Debt/Equity ratio
Fixed charge coverate
Select only 3 Liquidity Ratios and 3 Coverage Ratios for your assignment.
You will go back 3 years for your data to develop trends
Hints:
Do not ‘cut and paste’ the data
Do not include .00. Instead use the whole numbers.
List years in descending order
Embed the calculations (sums) in the cell
Include the reference
Remember, you provide just 3 of the ratios from the list
Elaine Gregory (EG) -
YOUTUBE videos - Refresher
https://www.youtube.com/watch?v=s_aZAQQr9EM
Net Working Capital
Current Ratio
Quick (Acid Test) Ratio
https://www.youtube.com/watch?v=HI4_ORWRD6E
Cash Ratio
https://www.youtube.com/watch?v=EbBVnuh0GOE
Current Cash Debt Coverage Ratio
YOUTUBE videos - Refresher
https://www.youtube.com/watch?v=ECDpMUXwPiA
Times Interest Earned
https://www.youtube.com/watch?v=zeZOjxK-908
Debt Ratio
https://www.youtube.com/watch?v=6Lslqs0Wdh4
Debt to Equity Ratio
https://www.youtube.com/watch?v=bWN6jpEPm44
Fixed Charge Coverage
Requirements – Process Step 2: Summarize results
Ignore the minimum word requirements. Instead, focus on a thorough analysis of the content of the paper.
Include a cover sheet
Suggested headers and length:
Introduction and Overview of Company 1-2 paragraphs. Remember an introduction introduces us to the assignment. One paragraph refresh on the company would be enough.
Liquidity Ratio 1-2 paragraph to define this. Just give us an overview of what a liquidity ratio is and why we look at them…what do they tell us about a company?
Now, at least 1 paragraph on each specific ratio you chose. Remember, we want not only the results (include the data), but also what is the story or rationale behind the data. What has happened over the last 3 years not only with the data but what is going on with the company which is causing the data results?
Requirements – Process Step 2: Summarize results
Long-Term Debt-Paying (Coverage) Ratio 1-2 paragraphs. Just give us an overview of what a liquidity ratio is and why we look at them…what do they tell us about a company?
Now, at least 1 paragraph on each specific ratio you chose. Remember, we want not only the results (include the data), but also what is the story or rationale behind the data. What has happened over the last 3 years not only with the data but what is going on with the company which is causing the data results?
Financial Strengths and Weaknesses of the Company – Minimum 2 paragraphs each based on the results of your analysis.
Conclusion – 1-2 paragraphs that summarizes your paper
References – on a separate page
Rubric: Grading Expectations
Liquidity ratio and long-term debt ratio analysis results. (Results and analysis/rationale over 3 years)
Summary Analysis (strengths and weaknesses)
Paper Format, Writing, and APA (correct format for paper inclusion of all of the headers/criteria, references and in-text citations in APA format)
40%
30%
30%
Additional notes
Provide analysis beyond numbers…what was the rationale behind the results?
What relationships exist between accounts that may correlate the results with the information provided by the company?
Submit both the excel spreadsheet AND the paper
Sources: Appropriate versus Not Appropriate
Appropriate
Textbooks,
Texts from Credible Authors,
Scholarly Peer-Reviewed Journals,
Practitioner Magazines,
Government/Trade Sites
Corporate Websites
NOT Appropriate
Wikipedia, Investopedia, Motley Fool, Technopedia
Open source, lacking expert review
Caveat: If the site has a reference cited, you can look ‘that’ source up and use it if it is correct.
CourseHero, Scrib.com, Chegg.com (plagiarism)
Journal entry from a scholarly journal or a trade magazine:
Phua, F. T. T. (2018) The role of organizational climate in socially embedding construction firms’ sustainability goals. Construction Management & Economics, 36, 409-521. doi:10.1080/1446193.2018.1424348
SEC 10-K Report: (Starbucks Corporation):
U.S. Securities and Exchange Commission (2018). 2018 Annual SEC Form 10-K Report, Starbucks Corporation. Retrieved from: https://www.sec.gov/Archieves/edgar/data/829224/000082922418000052/sbux-9302018x10xk.htm
Textbook:
Young, S.D., Cohen, J., & Bens, D.A. (2019). Corporate financial reporting and analysis: A global perspective. (4th ed.). Hoboken, NJ: John Wiley & Sons Inc.
Hanging Indent!!!!!
Article from the Web where there is an ‘Author’:
Rivas, T. (2020, June). Starbuck’s sales are coming back, but the outlook is worse than feared. Barron’s. Retrieved from https://www.barrons.com/articles/starbucks-earnings-were-worse-than-expected-so-is-the-outlook-51591795658
Article from the Web where a company is the ‘Author’:
Starbucks Company (2020, June). Starbucks publishes 2019 global social impact report. Retrieved from https://stories.starbucks.com/stories/2020/starbucks-publishes-2019-global-social-impact-report/
Another Example:
Starbucks Company (n.d.). Company Information. Retrieved from https://www.starbucks.com/about-us/company-information
Italicize the website
Italicize the article name