project-two-business-report-accounts-receivables-and-inventory
Two Pages: Single spaced, One inch margins, APA. Please reference attachments (project 1, SEC 10-K and Project two Guid)
Accounts Receivables and Inventory
Your SEC 10-K company should have accounts receivable and inventory. For answers to the questions below, read the Notes to the Financial Statements presented immediately after the financial statements. This is usually part of section 8 of the SEC 10-K. Section 7 is Management and Analysis (M&A). Section 15 is often referenced as financial exhibits.
I.Write down the Accounts Receivables values over the last two years. How have the values changed? Do you believe this change is significant? Why or why not? Are you surprised at these results? Who owes money to your Sec 10K Company? What information did you find about Accounts Receivables in the Notes to the Financial Statements section? Do not merely cut and paste from the SEC 10 K report. Summarize the information using your own words as much as possible. 20 points
II.Write down the Inventory values over the last two years. How have the values changed? Do you believe this change is significant? Why or why not? Are you surprised at these results? Is this information available to you? What information did you find about Inventory in the Notes to the Financial Statements section? How is it described? Do the notes tell you what Inventory method is being used such as FIFO, LIFO, etc. Do not merely cut and paste from the SEC 10 K report. Summarize the information you find in the Notes section using your own words as much as possible.
20 points.
III.Using the resources of our course materials compute the following for two years and comment briefly interpreting the results:
(a)Accounts Receivable Turnover
The formula: Net Credit Sales/Average Accounts Receivable.
If Net Credit Sales information is not available, use Sales for purposes of this assignment.
Formula for computing Average Accounts Receivables: Beginning AR + Ending AR/2
Year 1 Ratio:
Year 2 Ratio:
Comments:
10 points
(b)Day’s sales in Accounts Receivable (AR)
The formula: Average AR/Average Daily Sales
Average Daily Sales = Sales/ 365
Comment briefly interpreting your results.
10 points
( c ) Inventory Turnover
Formula: Cost of Goods Sold/Average Inventory
Formula for computing Average Inventory: Beginning Inventory + Ending Inventory/2
Comment briefly interpreting your results.
Year 1 Ratio:
Year 2 Ratio:
Comments:
10 points
(d) Day’s sales in Inventory for two years.
Formula:
Average Inventory/Average Daily Cost of Goods Sold
Average Daily Cost of Goods Sold = Cost of Goods Sold / 365
Year 1 Ratio:
Year 2 Ratio:
Comments:
Comment briefly interpreting your results. In order to calculate two years of ratios, you will need to review there years of financial statement information. Supporting computations for reach ratio must be shown clearly.
10 points
IV.Property, Plant & Equipment
Write down the Property, Plant & Equipment values over the last two years. Show te breakdown of the numbers in this category. How have
the values changed? Do you believe this change is significant? Why or why not? Are
you surprised at these results? What information did you find about this category in
the Notes to the Financial Statements section? What information was provided about
the depreciation method(s) being used. Do not merely cut and paste from the
SEC 10 K report. Summarize the information using your own words as much as possible.
20 points
Your submission must cross reference the question numbers and the sub parts such as III a, III b etc. Failure to follow these instructions will result in loss of points.
Good Luck! Analyzing the SEC Annual Report is an important skill!
