Week 4 & 5 Discussion 1 & 2 Plus Journal

BUS627Week6-DiscussionForum1.docx

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Required Resources

Text

Brodersen, S., & Pysh, P. (2014). Warren Buffett accounting book: Reading financial statements for value investing . Retrieved from https://www.vitalsource.com

· Chapter 5: Financial Statements and the Stock Investor

· Chapter 6: Income Statement in Detail

· Chapter 7: Balance Sheet in Detail

· Chapter 8: Cash Flow Statement in Detail

Porter, G., & Norton, C. (2018). Using financial accounting information: The alternative to debits and credits (10th ed.). Retrieved from https://www.cengage.com

· Chapter 13: Financial Statement Analysis

Web Page

U.S. Securities and Exchange Commission. (n.d.). EDGAR company filings (Links to an external site.). Retrieved from https://www.sec.gov/edgar/searchedgar/companysearch.html

· This web page provides information about the Securities and Exchange Commission (SEC) and how to search for a company name. This web page will assist you in your Real-World Financial Statement Analysis final project this week. Accessibility Statement (Links to an external site.) Privacy Policy (Links to an external site.)

Recommended Resources

Book

Piper, M. (2010). Accounting made simple: Accounting explained in 100 pages or less (Links to an external site.). Retrieved from https://www.academia.edu/35733742/Accounting_made_simple_pdf

· This book provides a high-level overview of accounting, including the accounting equation, income statement, balance sheet, statement of cash flows, financial ratios, GAAP, cash vs. accrual accounting, inventory, and cost of goods sold, and it may assist you with your Financial Statement Horizontal Analysis Case Study and Vertical Analysis of Common-Size Financial Statements Case Study discussion forums, as well as your Real-World Financial Statement Analysis final project this week.

Articles

Calculating return on assets. (2011). In J. Law, Business: The ultimate resource (3rd ed.). Retrieved from https://www.bloomsbury.com/us/

· The full-text version of this article is available through the Credo Reference database in the Ashford University Library. This article provides a concise overview of how to calculate and interpret the return on assets, and it may assist you with your Real-World Financial Statement Analysis final project this week.

Liquidity ratio analysis. (2014). In QFinance: The ultimate resource (5th ed.). Retrieved from https://www.bloomsbury.com/us/

· The full-text version of this article is available through the Credo Reference database in the Ashford University Library. This article provides a concise overview of how to calculate and interpret liquidity ratios, including the current ratio, cash ratio, and quick ratio, and it may assist you with your Real-World Financial Statement Analysis final project this week.

Price/earnings ratio. (2014). In QFinance: The ultimate resource (5th ed.). Retrieved from https://www.bloomsbury.com/us/

Multimedia

ProfAlldredge. (2015, July 17). Financial accounting: Price-earnings ratio (Links to an external site.) [Video file]. Retrieved from https://youtu.be/jWSJ97oQ8Ak

· This video provides a discussion of how to calculate and analyze the price-earnings (P/E) ratio, and may help you with your Real-World Financial Statement Analysis final project this week. This video has closed captioning and a transcript. Accessibility Statement (Links to an external site.) Privacy Policy (Links to an external site.)

ProfAlldredge. (2015, July 27). Financial accounting: Vertical analysis (Links to an external site.) [Video file]. Retrieved from https://youtu.be/GAKDCk19dfU

· This video provides an overview with examples of how to use common-size financial statements to conduct a vertical analysis of a company, and it may help you with your Financial Statement Horizontal Analysis Case Study discussion forum and Real-World Financial Statement Analysis final project this week. This video has closed captioning and a transcript. Accessibility Statement (Links to an external site.) Privacy Policy (Links to an external site.)

ProfAlldredge. (2015, August 5). Financial statements: Return on assets (Links to an external site.) [Video file]. Retrieved from https://youtu.be/5HQfgKsJUV0

· This video provides a discussion of how to calculate and analyze the return on assets ratio and may help you with your Real-World Financial Statement Analysis final project this week. This video has closed captioning and a transcript. Accessibility Statement (Links to an external site.) Privacy Policy (Links to an external site.)

Routh, B. [Brian Routh TheAccountingDr]. (2011, May 22). What is financial statement analysis: Horizontal analysis? – Accounting video (Links to an external site.) [Video file]. Retrieved from https://youtu.be/x_ltrzpz4Ew

· This video provides an overview with examples on how to use comparative financial statements to conduct a horizontal analysis of a company, and it may help you with your Financial Statement Horizontal Analysis Case Study discussion forum and Real-World Financial Statement Analysis final project this week. This video has closed captioning and a transcript. Accessibility Statement (Links to an external site.) Privacy Policy (Links to an external site.)

Subjectmoney. (2012, December 31). Financial statement analysis #2: Ratio analysis - Liquidity (short term solvency) (Links to an external site.) [Video file]. Retrieved from https://youtu.be/G8v9hF0k3gI

· This video provides a discussion of how to calculate and analyze various liquidity ratios, including the current ratio, the quick ratio (acid test), and the cash ratio, and it may help you with your Real-World Financial Statement Analysis final project this week. This video has closed captioning and a transcript. Accessibility Statement (Links to an external site.) Privacy Policy (Links to an external site.)

Subjectmoney. (2012, December 31). Financial statement analysis #3: Long term solvency measures or leverage ratios (Links to an external site.) [Video file]. Retrieved from https://youtu.be/qg1N9_CQtyk

· This video provides a discussion of how to calculate and analyze various solvency ratios, including the total debt ratio, the debt-to-equity ratio, the equity multiplier, the TIE ratio, and the cash coverage ratio, and it may help you with your Real-World Financial Statement Analysis final project this week. This video has closed captioning and a transcript. Accessibility Statement (Links to an external site.) Privacy Policy (Links to an external site.)

Subjectmoney. (2013, January 1). Financial statement analysis #5: Ratio analysis - Profitability measures (Links to an external site.) [Video file]. Retrieved https://youtu.be/tKLcdoFKgp8

· This video provides a discussion of how to calculate and analyze various profitability ratios, including profit margin, EBITDA margin, return-on-assets, and return-on-equity, and it may help you with your Real-World Financial Statement Analysis final project this week. This video has closed captioning and a transcript. Accessibility Statement (Links to an external site.) Privacy Policy (Links to an external site.)

Instruction

Prior to beginning work on this discussion forum, read Chapter 13 in the course textbook, Using Financial Accounting Information: The Alternative to Debits and Credits.

Using the same company and annual reports that you chose for your Reading and Using the Annual Report Case Study discussion forum in Week 1,

· Prepare a comparative balance sheet, income statement, and statement of cash flows, and perform a horizontal analysis of the company’s balance sheet, income statement, and statement of cash flows for the most recent 2 years. Identify at least one significant change (increase or decrease) from one year to the next in a balance sheet account, income statement account, and statement of cash flows account.

· Identify the causes of the change in each of these accounts.

· Discuss the implications of each of these account changes, and your assessment of the company based on these changes. Do these changes reflect positively or negatively on the company, and what is your assessment of the outlook for the company?

Your initial response should be a minimum of 200 words. Graduate school students learn to assess the perspectives of several scholars. Support your response with at least one scholarly and/or credible resource, in addition to the text.