Worldcom Spreadsheet Analyses

ACC 646 Module Four Activity Guidelines and Rubric WorldCom Spreadsheet Analysis

Overview: Using Excel and WorldCom’s income statement and balance sheet for 2001, provided on pages F-2 and F-3 of Form 10-K, prepare a common-size balance sheet and income statement for the years 2000 and 2001. Using formulas, compute the following ratios: gross margin percent, return on sales, return on assets, return on equity, total asset turnover, accounts receivable turnover, accounts receivable days, debt to assets, equity to assets, debt to equity, equity multiplier, current ratio, acid test, net working capital, book value per share, earnings per share, and price earnings. Address the following questions and include your Excel spreadsheets in your submission as exhibits.

1. What did you learn about the relationship between the income statement and balance sheet? 2. Does your analysis raise any questions that might lead to a fraud hypothesis? Explain.

Guidelines for Submission: Your submission should be a 1–2 page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins. Any sources used must be cited in APA format. Include your Excel spreadsheets as exhibits. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions.

Critical Elements Exemplary (100%) Proficient (90%) Needs Improvement (70%) Not Evident (0%) Value

Financial Statement

Analysis

Meets “Proficient” criteria and demonstrates thorough understanding of the ratios

Prepares common-size financial statements and computes ratios for gross margin percent, return on sales, return on assets, return on equity, total asset turnover, accounts receivable turnover, accounts receivable days, debt to assets, equity to assets, debt to equity, equity multiplier, current ratio, acid test, net working capital, book value per share, earnings per share, and price earnings

Does not include common-size financial statements and/or all required ratios

Does not include common-size financial statements or ratios

30

Relationship Between the

Income Statement and Balance Sheet

Meets “Proficient” and demonstrates nuanced understanding of relationship between the income statement and balance sheet

Explains relationship between the income statement and balance sheet

Discusses financial statement analysis within each financial statement but does not explain relationship between the income statement and the balance sheet

Does not discuss financial statement analysis or explain relationship between the income statement and balance sheet

30

Fraud Hypothesis

Meets “Proficient” criteria and substantiates ideas with research

Explains how analysis may lead to a fraud hypothesis

Explanation of fraud hypothesis lacks detail

Does not explain how analysis may lead to a fraud hypothesis

30

Articulation of Response

Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to-read format

Submission has no major errors related to citations, grammar, spelling, syntax, or organization

Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas

Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas

10

Earned Total 100%