University:
Grand Rapids Community College
Course:
Financial and Managerial Accounting: Information for Decisions - John J. Wild
Academic year:

2024
Views:

25

Pages:

2
Author:

stud_ice13

Serial Problem 13 - Business Solutions (P3) 1. Calculate Ratios: o Gross Margin Ratio: Calculate with and without services revenue. o Net Profit Margin Ratio: Calculate and round to one decimal. o Current and Acid-Test Ratios: Round to one decimal. o Debt and Equity Ratios: Round percentages to one decimal. o Asset Composition: Determine the percentage of assets that are current and long-term. Tableau Dashboard Activities (DA 13-1 to DA 13-3) 1. Profit Margin and Return on Assets: These tasks involve computing ratios for analyzing profitability and decision-making, similar to prior questions like QS 13-15. 2. Business Decisions with Ratios: Exercises are set up to use data visualization tools (e.g., Tableau) to evaluate profit margins, return on assets, and other metrics. Company Analysis (AA 13-1) - Apple’s Financial Statements (A1, P1, P2) 1. Trend Analysis: Use fiscal year 2017 as the base year to compute trend percentages for net sales, cost of sales, operating income, and net income. 2. Common-Size Analysis: Calculate common-size percentages for current assets, property, plant, and equipment, and accounts receivable. 3. Liquidity Analysis: Determine if Apple’s asset composition in 2019 became more liquid compared to prior years. Comparative Analysis (AA 13-2) - Apple and Google (C1, P2) 1. Common-Size Percentages: Calculate for each company. 2. Impact of Dividends: Determine if Google’s retained earnings would increase or decrease with a dividend payment. 3. Gross Margin Comparison: Identify which company has a better gross margin ratio. Extended Analysis (AA 13-3) - Samsung Financial Data (A1) 1. Common-Size Percentages: Calculate for Samsung. 2. Gross Margin Ratio: Calculate and compare with the industry average (25%). Discussion Questions These questions explore broader concepts in financial analysis: 1. Financial Reporting vs. Financial Statements: Differentiate the two concepts. 2. Comparative Statements: Explain comparative and common-size statements. 3. 100% Value Items: Identify items commonly assigned a 100% value on balance sheets and income statements. 4. Current Ratio Evaluation: Discuss factors impacting current ratio adequacy. 5. Working Capital Importance: Explain its significance in balance sheet analysis. 6. Liquidity Indicators: Discuss indicators like days’ sales uncollected and accounts receivable turnover. 7. Capital Structure: Analyze why debt and equity ratios are essential. 8. Inventory Turnover and Ratios: Understand inventory turnover’s role in assessing liquidity and management performance. Beyond the Numbers 1. Ethics Challenge (BTN 13-1): Analyze why a CEO might selectively report certain financial ratios to analysts and consider the ethical implications. 2. Communicating in Practice (BTN 13-2): Team members analyze and compare company financial statements, focusing on liquidity, efficiency, solvency, and profitability. 3. Taking it to the Net (BTN 13-3): Access Hershey Company’s 10-K report to calculate profitability ratios and assess performance. 4. Teamwork in Action (BTN 13-4): Team-based activity exploring horizontal and vertical analysis and specific ratio categories. 5. Entrepreneurial Decision (BTN 13-5): Answer interview questions based on financial analysis, focusing on liquidity, receivables, asset investment, and profitability trends.