ACCT 102
Financial Statement Analysis
Term Paper Project
This term project requires you to analyze trends in corporate performance and to perform a financial statement analysis on a company of your choosing.
(I choose SEPHORA)
Choose a publicly held company, who reports their financial data in US dollars. They should be traded on either the New York Stock Exchange or the NASDAQ.
The title page of your paper should include the name of your company, and any logo that the company uses and your name.
A table of contents is encouraged but not mandatory. Charts or graphs are encouraged but not mandatory.
Based on the most recent financial report available (only Annual 10K reports filed with the SEC should be used ), perform the following:
A horizontal analysis of the complete Income Statement and Balance Sheet comparing the data from the two most recent years.**
A vertical analysis of the complete Income Statement and Balance Sheet utilizing the data for the two most recent years. **
Compute the following ratios for the two most recent years AND COMMENT ON THE RESULTS. (List the formula in words, then amounts, and then comment on the results. What do they mean, were the changes favorable or unfavorable. I highly recommend Excel for all numerical computations. )
Current Ratio
Acid Test Ratio
Accounts Receivable Ratio
Number of Day’s sales in receivables
Inventory Turnover
Number of Day’s sales in inventory
Return on Total Assets
Basic Earnings per share (This is computed at bottom of the income statement. Just disclose the amounts.)
Price Earnings ratio
Dividend Yield
Debt Ratio
Equity Ratio
Before presenting the financial data, prepare a narrative on your company. You should consider not only using the formal 10K, but other sites as well to gather the data needed. (ALL OF THE FINANCIAL DATA ABOVE SHOULD BE TAKEN ONLY OUT OF THE AUDITED 10K REPORT.) Within the body of your narrative, make sure you include the following:
The nature of the operations. (How did the company get started, what products or services they sell, what companies are consolidated into the financial statements, how they distribute products, and whether they experience seasonal business. Also include the state of incorporation within your narrative.)
The ticker symbol the company uses and what stock exchange they are sold on
Significant changes that have taken place
Significant future plans
What “Risk Factors”
Accounting methods related to costing inventory and recording depreciation
Any business combinations
How has technology changed their business
High and low stock prices for the years reported on. (Please also include what the current stock price is.
Any recent news after the date of your balance sheet.
COMMENT ON RESULTS of the financial analyses above in your paper.
You can include any other data as you see fit.
I STRONGLY SUGGEST that you have someone proofread your paper before submitting it. You may want to exchange papers with a classmate and have each other proof your work (and learn about another company in the process.)
Your project should be typed (in Word) and should include all of the above. (Excel attachments are ok but I prefer you export data into Word if you know how. Otherwise, you can attach excel files and refer to them in the Word document. No handwritten data will be accepted. All work must be uploaded in Canvas prior to the due date. Try your best to include all data In ONE FILE.
** This can be done using ONE line of FORMULAS in Excel. Just copy the formula down.
I prefer WORD better.
