Answer the following questions Questions and Exercises: 6.1, 6.2, and 6.3

Unit 5 Assignment 1 Rubric:

Earnings Management and Quality

Criteria Level 4 Level 3 Level 2 Level 1 Earned

(Excellent) (Good) (Fair) (Poor)

Criterion 1: (8 pts.)

Writing, spelling, and grammar

Consistently and ably uses properly structured paragraphs, sentences, grammar, and spelling.

Consistently and ably uses properly structured paragraphs, sentences, grammar, and spelling, with some minor errors.

Inconsistently uses properly structured paragraphs, sentences, grammar, and spelling. Document includes quite a few errors.

Does not consistently use properly structured paragraphs, sentences, grammar, and spelling. Document includes glaring errors.

Mechanics and structure 8 7 6 5 Earned:

Criterion 2: (20 pts.)

Checklist:

• 6.1: -Provides a specific example of poor accounting quality hindering forecasting of expected future earnings. • 6.2: -Explains how balance sheet quality and earnings quality are related. -Provides a specific management judgement, estimate, or choice decreasing both balance sheet and earnings quality.

Provides thorough/ insightful examples (5 pts.) and explanations (5 pts.), computes the correct amount of dividends Schwartz will pay (5 pts.), and presents the correct projected balance sheet (5 pts.) in response to all of the checklist items indicating a

Provides complete/ insightful examples (3 pts.) and explanations (4 pts.), computes the mostly correct amount of dividends Schwartz will pay (4 pts.) and presents the mostly correct projected balance sheet (4 pts.) and

Provides good examples (2 pts.) and adequate explanations (3 pts.), computes the somewhat correct amount of dividends Schwartz will pay (2 pts.) and presents the somewhat correctly projected balance sheet (3 pts.) and responds to the

Provides few: correct examples (3 pts.), adequate explanations (3 pts.), correctly computed amount of dividends Schwartz will pay (3 pts.), and a partially correctly projected balance sheet (3 pts.) in response to some of the

GM5 0 6 | Strategic Financial Analysis

-Specifies how judgement decreased quality in each of two financial statements.

-Provides a different example of how a management judgement, estimate, or choice could increase balance sheet quality, but potentially impair earnings quality.

• 6.3 -Explains what earnings management is. -Explains why it is difficult to discern whether a firm does in fact practice earnings management.

• 10.7 -Computes the amount of dividends you can assume that Schwartz will pay.

-Presents the projected balance sheet.

firm grasp of finance theory and methodology.

responds to most of the checklist items indicating a somewhat firm grasp of finance theory and methodology.

majority of checklist items but with some errors indicating an adequate grasp of finance theory and methodology.

checklist items indicating a limited grasp of finance theory and methodology.

Content 20 16 14 12 Earned:

Criterion 3: (12 pts.)

Critical thinking and analysis

Response exhibits strong higher-order critical thinking and analysis (e.g., evaluation). Paper shows original thought.

Response exhibits limited higher-order critical thinking and analysis (e.g., application of information). Paper shows some original thought.

Response exhibits simplistic or reductive thinking and analysis but does demonstrate comprehension . Paper shows no original thought.

Response exhibits simplistic or reductive thinking and analysis and demonstrates limited knowledge of the subject matter.

Critical thinking and analysis

12 10 9 7 Earned:

Total (40 pts.) Less than poor = 0 pts.

Earned: