BUS 591 Week 1 Homework Assignment

BUS591 – Financial Statement and Analysis

Week 1 Homework Assignment Templates

Instructions: Only enter data in the yellow boxes. The remaining areas are already completed for you.



Submit to the assignment box before the due date. (Late assignments will receive a late penalty).

Grading Rubric: There are a total of 68 “questions” for you to answer (as determined by the yellow box). Each item is worth 0.06 points for a total of 4.00 points.

P1-3B, Prepare an income statement, retained earnings statement, and balance sheet; discuss results.

Instructions:

(a) Prepare an income statement and a retained earnings statement for the month of May and a balance sheet at May 31, 2014.

SHAW’S GARDEN



(b) Briefly discuss whether the company’s first month of operations was a success. Enter text answer here.



(c) Discuss the company’s decision to distribute a dividend. Enter text answer here.



P1-4B, Determine items to be included in a statement of cash flows, prepare a cash flow statement and discuss the results.

Instructions:

(a) Determine which items should be included in a statement of cash flows and then prepare the statement for Preacher Corporation.



PREACHER CORPORATION

Statement of Cash Flows

For the Year Ended December 31, 2014

Cash flows from operating activities

Activity

Amount

Activity

Amount

Net cash provided by operating activities

Cash flows from investing activities

Activity

Amount

Activity

Amount

Net cash used by investing activities

Cash flows from financing activities

Activity

Amount

Activity

Amount

Net cash provided by financing activities

Net increase in cash

(b) Comment on the adequacy of net cash provided by operating activities to fund the company’s investing activities and dividend payments.

Enter text answer here.



(Continued)



Amount



Amount



Amount

Amount



P2-7B, Compute values and ratios for the following; discuss results.

Instructions:

(a) For each company, compute these values and ratios:

be sure to show your computations!

Working Capital

Current ratio (round to

two decimal places)

Debt to total assets ratio

Free cash flow

Earnings per share



(b) Compare the liquidity, profitability and solvency of the two companies. Enter text answer here.