Seton Hall University
BACC2103
Spring 2022
Financial Accounting Project
In
this project, you will use your understanding of financial accounting to
prepare an analysis of an assigned company’s financial statements. To prepare your
analysis, you will use Microsoft Excel and data from the internet. Then,
you will communicate the results of your analysis in a written report.
This
project will help you build your critical thinking, technology, and
communication skills.
This
project is a required component of BACC2103, Financial Accounting. To
receive a passing grade in this course, you must complete and submit the entire
project by the required deadlines.
Part 1 –
The Financial Statements (20 points) – Due Monday, February 7th at 3 pm.
This
part consists of two steps:
Step
1 – For the company assigned to you:
A. Obtain
the latest Annual Report (or it may be referred to as the SEC Form 10-K) from the
company’s Investor Relations website.
B. From
this report, locate the four basic financial statements (i.e., Balance Sheet,
Income Statement, Statement of Changes in Stockholders’ Equity, and Cash Flow
Statement[1]).
C. Extract
only these pages and save as a PDF file.
D. Submit
this PDF file on Blackboard by the required due date.
E. Safe
the complete copy of the Annual report / 10-K as a PDF file. You will be referring to this in later parts
of this project.
Step 2 – Within
the Annual Report obtained in Step 1, you will find a section describing your
company’s business. After reading this
section, prepare a one to one-and-half page paper describing how your company
generates revenue, including a description of their various business segments
if your company has multiple businesses to which revenue is generated. Based on this limited information you have
gathered so far, conclude with a “guess” as to whether you would invest in your
company or not. You may change you
conclusion after you have completed all parts of this project.
Part 2 – Completing
the Excel Template for the Balance Sheet & Income Statement (5
points) –
Due Monday, February
21st at 3 pm.
A. Download
the project’s Excel template from Blackboard.
B. Using
the Balance Sheet and Income Statement obtained in Part 1, input these
statements into the appropriate tabs found in this template (columns A to C on
the “Balance Sheet” and “Income Statement” tabs).
You
do not need to input the information found in the Statement of Changes in
Stockholders’ Equity and Cash Flow Statement.
But you may need this information in analyzing your company’s overall
financial performance and preparing your paper.
Part 3 – Prepare
the Common-size & Variance Analysis for the Balance Sheet & Income
Statement
(10 points)
– Due Wednesday, March 21st at 3 pm.
This part consists
of two steps.
Step #1 – Using
the completed Excel template for the Balance Sheet & Income Statement from
Part 2, complete columns E and F for the
Common Size – Vertical Analysis, and columns H & I for the Variance –
Horizontal Analysis found on the “Balance Sheet” & “Income Statement” tabs.
FOR THESE CALCULATIONS, YOU MUST ONLY USE FORMULAS WITH CELL
REFERENCES. DO NOT CALCUATE THE REQUIRED
AMOUNTS OUTSIDE OF THIS TEMPLATE AND MANUALLY INPUT THE RESULLTS! POINTS WILL BE DEDUCTED IF YOU DO SO.
A partial example of
these requirements is provided in the first few lines on the Balance Sheet and
Income Statement tabs.
Step #2 – Complete
the “Financial Ratios” tab.
CONSISTENT WITH PART 3, YOU MUST ONLY USE CELL REFERENCES AND
FORMULAS TO COMPLETE THESE RATIOS. DO
NOT CALCUATE THE RATIOS OUTSIDE OF THIS TEMPLATE AND MANUALLY INPUT THE
RESULLTS! POINTS WILL BE DEDUCTED IF YOU
DO SO.
Part
4 – Written Report (65 points) Due Wednesday, April 20th at 3 pm.
Prepare at least a three-page
paper addressing each of the topics listed below
1. How
profitable is your company? Referring back to the Variance – Horizontal
Analysis on the “Income Statement” tab (Column H & I), identify three to
four significant variances and provide explanations for why they are
changing. You will find the discussions
within the Management, Discussion & Analysis section (Item #7) of your
company’s Annual Report / 10-K to be helpful.
In addition, the Common-Size Vertical Analysis for the income statement
may assist in adding additional content.
2. What
is your overall assessment of your company’s financial performance? Review the Common-Size – Vertical
Analysis and the Variance – Horizontal Analysis on the “Balance Sheet” tab as
well as the various ratios found on the “Financial Ratios” tab, assess the
company’s performance with regards to asset management, liquidity, and
solvency. You do not need to address all of these. Only that which is most relevant to the next topic.
3. Would
you buy or sell an investment in your company’s stock? Referring to all the information you have gather
and the most recent stock price and price-to-earnings ratio, provide a
conclusion as to why you would or would not invest in you company. Your answer should be from the view of a
long-term investor; not that of a “day-trader.”
Organization. Your report should be organized in a logical manner. Do not simply describe formulas
for the various ratios but discuss the drivers impacting the balances used in these formulas.
In addition, your paper is limited to three to four pages. So please, do not wasted space. Statements should be concise. Points will be deducted for obvious statements
that are not necessary.
Professional Quality. Prepare your report as a professional-looking
document for which you were paid a great deal of money. Be careful with grammar
and spelling; business leaders have a zero-tolerance policy regarding basic
spelling and grammar mistakes. Use Microsoft Word, double-space, with one-inch
margins.
Proper Referencing. Copying or rewording another report without
proper citation and quotation is plagiarism. In the body of the paper, include
proper references to all written materials and internet sources with a complete
page of sources used at the end. This
page will not be counted towards the required three to four pages.
Submission. Before Wednesday, April 20th at 3 pm, submit a
digital copy of the written report in Blackboard. The document should be saved in
Microsoft Word labeled as [Last name in CAPS] [Company name].docx [e.g.,
REITEMEYER Ford Motor Company]. Please do not submit as a PDF file.
Your report will
be graded based on the comprehensive coverage and accuracy of your analysis, using
a clear and concise writing style
that is easy to understand, and professional in its appearance. Tables, graphs,
charts may be provided, but only if they are relevant and are referred to
within the text to add clarity. They
will not be count towards the required three to four pages.
[1]
The exact wording for the title of these statements may vary from what is
referred to here. In addition, their
title will generally begin with the word “Consolidated.” For example, the balance sheet may be titled
“Consolidated Balance Sheet,” or “Consolidated Statement of Position.” You can easily identify these four statements
by the information present in them.
