Accounting Project

ACCOUNTING 6300

FINANCIAL STATEMENT ANALYSIS INSTRUCTIONS

Due April 22, 2024

Read Chapter 13 and Appendix 13A before you begin!

1. You will need the most recent two annual SEC 10-K filings for your company. Some places

to look for the data include the company website or the SEC website (EDGAR database)

https://www.sec.gov/edgar/searchedgar/companysearch.html

SEC website (Edgar database)

My recommendation is to use the SEC website option, so that you can have the information

downloaded as an Excel file. Using the website above, find your company, click on the red

numbers under the “CIK” column, then find the most recent two 10-Ks. After locating the 10-Ks

select the “Interactive Data” button beside the 10-K. This will then open a new page named

“View Filing Data” from here you will want to select “View Excel Document” which will be in

red letters underneath your company’s name.

To find the financial statements, go to the company's webpage and look for a link called Investor

Relations or Corporate Information or something along those lines. This may be found at the

bottom of the company's main webpage. You should see information on Annual Report, SEC

Filings, Stock Charts, etc. Using the SEC filings (either through the EDGAR link above or the

company website), you will need annual filings and you will need the most recent 2 years’ 10-

Ks. That is the SEC version of the annual report. Look for the financial statements in the 10-K (it

will be item 8). The SEC 10-K information may be downloaded in Excel which may save you

some time.

Do NOT use the financial statements on Yahoo or Google Finance or MSN Money because they

have summary or condensed formats and do not give you the detail account information. You

will need the most recent financial statements and you must use the annual financial statements,

not quarterly. Feel free to e-mail me if you have questions about the information you

need.

Company’s website

By April 22nd, do the following:

2. Using an Excel spreadsheet* and your company's financial statements, compute the following

for the most recent two years (chapters with information on each ratio are in parenthesis next to

the ratio, refer to the tables in Chapter 13 Learning Objective 3 Ratio Analysis on WileyPlus or

pages 15-26 in Chapter 13, (Illustrations 13.18 to 13.21 provide a great example of ratio

analysis):

• Current ratio (2,13)

• Working capital (not really a ratio) (2, 13)

• Inventory turnover ratio (6, 13)

• Accounts Receivable turnover ratio (8, 13)

• Debt to total assets ratio (2, 13)

• Return on assets (9,13)

• Asset turnover ratio (9, 13)

• Return on equity (11, 13)

• Gross profit ratio (5, 13)

• Profit margin ratio (5, 13)

3. Also using the spreadsheet, prepare the following for the most recent two years:

• Comparative Income Statement - Vertical Analysis (Illustration 13.12)

• Comparative Balance Sheet - Horizontal Analysis (Illustration 13.11)

4. Find industry comparative numbers on the MSN Money website (https://www.msn.com/en-

us/money) for the following items calculated in # 2 above:

• Current Ratio

• Inventory Turnover

• Return on Assets

• Asset Turnover

• Return on Equity

• Profit Margin (Net Profit Margin)

See specific instructions on "Industry Comparative Ratios" in the Project Folder. The industry

comparative numbers should be the most recent available. You should refer to Illustrations 13.18

to 13.21.

5. Using the information gathered and calculated above, write up an analysis of your company.

Begin with a brief history of the company to help the reader understand the company. Next

include a discussion of the company's financial performance as seen through ratios and other

calculations, whether favorable or unfavorable. The analysis should also give a conclusion

on how the company has performed in the past and what its future looks like.

The analysis is to be written by you, not copied from a professional analyst's work. When

writing up the analysis, refer back to the ratios and other calculations above to support your

conclusions. The data should be analyzed from two different perspectives: across time and across

companies (industry data). Be sure to explain what the calculations mean. The analysis should be

done in a professional manner (typed, double-spaced, 1” margins, 10-12 font, proper grammar,

appendices, cover page, graphs, references, etc.). The written portion of the paper should be

about 2-5 pages. Feel free to check the sample in same folder for an example.

Note: in the sample the years are outdated. For the purpose of the project the recent years should

be 2022 and 2023.

6. The following is to be turned in by April 22nd:

Report, with analysis and supporting data (cutting and pasting between Excel and Word might

save you some time). Submit your finished project with a cover sheet that incudes your name and

class section in the Financial Statement Analysis Dropbox (attach your Word and/or Excel files

or pdf). Please make sure it is ready for me to print.

Calculations & Industry Ratios MUST be entered into WTClass. They are called:

“FSA Project- Enter Your Answers to the Calculated Ratios Here- Worth 42 points”

“FSA Project- Enter Your MSN Money Industry Ratios Here- Worth 20 points”

The breakdown of the points is as follows:

Item Points

Ratio computations 42

Industry comparative analysis 20

Vertical analysis 18

Horizontal analysis 15

Analysis (written portion) 45

Sources & Format 10

Total 150

*If you have never used Excel, you may calculate your ratios and prepare your vertical and

horizontal analyses manually and type them in a Word document. Contact me if you have

questions.