Financial Analysis Assessmenr

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BUS-FP3061 - Fundamentals of Accounting Assessment 5, Part 1 Template 2013 Calculations Current ratio Quick ratio Receivables turnover Inventory turnover Profit margin Asset turnover Return on assets Return on equity Earnings per share Price-earnings Cash Dividend payout Debt ratio Debt-to-Equity Times interest earned 2013 Answers BUS-FP3061 - Fundamentals of Accounting Assessment 5, Part 1 Template Orange Company Income Statement For the Years Ended December 31 2013 Net sales (all on account) Expenses: Cost of Goods Sold Selling and administrative Interest Expense Income Tax Expense Total expenses Net Income 2012 $ 600,000 $ 520,000 $ $ $ $ $ $ 415,000 120,800 7,800 18,000 561,600 38,400 $ $ $ $ $ $ 354,000 114,600 6,000 14,000 488,600 31,400 Additional Data: 1. The common stock recently sold at $19.50 per share. 2. Cash dividends in the amount of $15,400 were paid-out in 2013. Orange Company Balance Sheets December 31 Assets Current Assets Cash Short-term investments Accounts Receivable Inventory Total Current Assets Plant Assets Total Assets Liabilities and Stockholder's Equity Current Liabilities Accounts Payable Income Taxes Payable Total Curent Liabilities Long-term Liabilities Bonds Payable Total Liabilities Stockholder's Equity Common Stock ($5 par value) Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity mpany heets r 31 2013 2012 $ $ $ $ $ $ $ 21,000 18,000 86,000 90,000 215,000 423,000 638,000 $ $ $ $ $ $ $ 18,000 15,000 74,000 70,000 177,000 383,000 560,000 $ $ $ 122,000 23,000 145,000 $ $ $ 110,000 20,000 130,000 $ $ 120,000 265,000 $ $ 80,000 210,000 $ $ $ $ 150,000 223,000 373,000 638,000 $ $ $ $ 150,000 200,000 350,000 560,000
6/30/2018 Assessment 5 – BUS-FP3061 - Spring 2018 - Section 01 Assessment 5 Financial Analysis Details Attempt 1 Available Tutorials Support Attempt 2 Felicia Smith Log Out Attempt 3 Overview Complete a 2-part assessment in which you analyze and compute financial ratios and interpret the results of a multi-year financial ratio analysis. Smart investors also execute due diligence by performing a bit of financial statement analysis (also known as ratio analysis), where financial statement numbers are used to evaluate three characteristics of an organization's performance: (1) liquidity, (2) profitability, and (3) solvency. By successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria: Competency 2: Apply accounting cycle strategies to manage business financial events. Compute financial ratios using accounting data from financial statements. Interpret the results of financial ratios. Interpret trends found in a multi-year financial ratio analysis. Recommend strategies to improve financial trends. Competency Map Use this online tool to track your performance and progress through your course. CHECK YOUR PROGRESS SHOW LESS  Context You have reached the end of the organization's accounting period. The accounting cycle, consisting of recording transactions, transferring to the ledger, and preparing the financial statements, is complete for this calendar or fiscal (an accounting period other than January to December) year. So now, what do you do with all the accounting information that has been gathered? You analyze it, synthesize it, and use it to make decisions concerning the current health of the organization and its future financial direction. If you were a potential investor (and had some disposable income to burn), you would mostly likely look through the annual reports of various organizations, read the comments of key decision makers, talk to friends and family members, and make an informed decision about which organization deserves your hard-earned money. Or, you could trust Wall Street to advise you on where to invest your money (but remember, they get a cut of your investment dollars as a commission). https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_108156_1&content_id=_6036494_1&mode=reset 1/4 6/30/2018 Assessment 5 – BUS-FP3061 - Spring 2018 - Section 01 Questions to Consider Tutorials Support Log Out Felicia Smith To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community. Consider these final reflections: What did you find to be the most complicated? What did you find to be the least complicated? What concept or principle surprised you the most? Which concepts and principles do you believe you will use the most in your professional life? Resources Required Resources The following resources are required to complete the assessment. Capella Resources Click the links provided to view the following resources: Assessment 5, Part 1 Template. Assessment 5, Part 2 Template. Suggested Resources The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom. Library Resources The following e-books or articles from the Capella University Library are linked directly in this course: Fields, E. (2011). The essentials of finance and accounting for nonfinancial managers (2nd ed.). New York, NY: AMACOM Books. Chapter 6, "Key Financial Ratios," is particularly applicable to the assessment. Course Library Guide A Capella University library guide has been created specifically for your use in this course. You are encouraged to refer to the resources in the BUS-FP3061 – Fundamentals of Accounting Library Guide to help direct your research. Internet Resources Access the following resources by clicking the links provided. Please note that URLs change frequently. Permissions for the following links have been either granted or deemed appropriate for educational use at the time of course publication. Accounting Basics for Students. (2013). Retrieved from http://www.accounting-basics-for-students.com/ Bean Counter's Free Accounting & Bookkeeping Tutorial Site. (n.d.). Retrieved from http://www.dwmbeancounter.com/moodle/ Bookstore Resources The resources listed below are relevant to the topics and assessments in this course and are not required. Unless noted otherwise, these materials are available for purchase from the Capella University Bookstore. When https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_108156_1&content_id=_6036494_1&mode=reset 2/4 6/30/2018 Assessment 5 – BUS-FP3061 - Spring 2018 - Section 01 searching the bookstore, be sure to look for the Course ID with the specific –FP (FlexPath) course designation. Tutorials Support Felicia Smith Log Out McCrary, S. A. (2010). Mastering financial accounting essentials: The critical nuts and bolts. Hoboken, NJ: Wiley & Sons. Mullis, D., & Orloff, J. (2008). The accounting game: Basic accounting fresh from the lemonade stand. Naperville, IL: Sourcebooks. Shim, J. K., & Siegel, J. G. (2010). Dictionary of accounting terms (5th ed.). Hauppauge, NY: Barrons Educational Series. SHOW LESS  Assessment Instructions This assessment includes two parts. Use the templates provided as you complete each part. Both of the templates are linked in the Resources under the Required Resources heading. Note that for Part 2 you will use the template for data but will create your own document to submit. Part 1: Ratio Analysis Making sense of accounting data on financial statements can be difficult. Thankfully, combining numbers from income statements, balance sheets, and other data provides a starting point to analyze a company's financial results. You now have the opportunity to demonstrate your prowess by identifying and computing financial ratios. Using the Assessment 5, Part 1 Template, analyze and compute the necessary financial ratios. The Financial Statements worksheet in the template contains the income statement, balance sheets, and additional information needed. The Ratio Analysis worksheet contains space for your calculations and answers. Part 2: Interpreting Financial Statement Analysis What does the calculation of a financial statement ratio represent? How does one year compare to another? Is there a trend to the ratio data? Is the trend positive or negative? What can be done to change the trend? These are some of the questions that can be answered when the ratio data is interpreted. For this part of the assessment, demonstrate your ability to interpret the results of a multi-year financial ratio analysis. On the Assessment 5, Part 2 Template you will find selected ratios for a company over a two-year period. Compare the ratios, and in a separate document (Word or Excel), submit your answers to the following questions: 1. What does the calculation of each ratio represent? 2. How does year one compare with year two, and what trend can be seen when you compare the two years? 3. Is the trend from year one to year two positive or negative? 4. What are the possible reasons for the trend? 5. What recommendations do you have for turning a negative trend to a positive trend? Submit the completed template for Part 1 and the document you created with answers to the questions for Part 2 for this assessment. Financial Analysis Scoring Guide VIEW SCORING GUIDE https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_108156_1&content_id=_6036494_1&mode=reset 3/4 6/30/2018 Assessment 5 – BUS-FP3061 - Spring 2018 - Section 01 Use the scoring guide to enhance your learning. Tutorials Support Log Out Felicia Smith How to use the scoring guide SUBMIT ASSESSMENT This button will take you to the next available assessment attempt tab, where you will be able to submit your assessment. https://courserooma.capella.edu/webapps/blackboard/content/listContent.jsp?course_id=_108156_1&content_id=_6036494_1&mode=reset 4/4
6/30/2018 Financial Analysis Scoring Guide Financial Analysis Scoring Guide NONPERFORMANCE BASIC PROFICIENT DISTINGUISHED Compute financial ratios using accounting data from financial statements. Does not compute financial ratios using accounting data from financial statements. Computes financial ratios using accounting data from financial statements, with errors. Computes financial ratios using accounting data from financial statements. Analyzes financial ratio results, and demonstrates insight and understanding of financial statements and data. Interpret the results of financial ratios. Does not interpret the results of financial ratios. Interprets the results of financial ratios, with errors. Interprets the Interprets the results of financial ratios, results of and demonstrates insight and financial ratios. understanding of what financial ratios represent and their use for reporting a business's financial results. Interpret trends found in a multi-year financial ratio analysis. Does not interpret trends found in a multiyear financial ratio analysis. Interprets trends found in a multiyear financial ratio analysis, with errors. Interprets trends found in a multi-year financial ratio analysis. Interprets trends found in a multi-year financial ratio analysis, and demonstrates insight and understanding of financial ratio results, trends, and contribution to business decision making. Recommend strategies to improve financial trends. Does not apply financial ratio results to financial trend analysis. Applies financial ratio results to financial trend analysis. Recommends strategies to improve financial trends. Recommends strategies to improve financial trends, and demonstrates exceptional insights and understanding of financial ratio application and analysis. CRITERIA https://courserooma.capella.edu/bbcswebdav/institution/BUS-FP/BUS-FP3061/160700/Scoring_Guides/u05a1_scoring_guide.html 1/1

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