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1. Company Introduction and Overview
Give me quick overview of your company. What is your company’s name? What products and services do you sell?
2. Journal Entry List
Record entries from the transaction and event list provided below in proper journal entry format. NOTE: You are recording entries for the fiscal year 2019 (Jan 1 – Dec 31). This list must be organized. Make sure that I can easily identify the journal entry or adjusting journal entry with the related transaction/event. Show your work if the entry requires you to make a calculation (i.e. depreciation, interest expense, etc.).
3. Chart of T-Accounts
Create a chart of T-Accounts and post each journal entry to the appropriate accounts.
4. Financial Statements
Build a multi-step income statement and a balance sheet for the year ending December 31, 2019 (include three years of data for 2019, 2018, and 2017 on both the income statement and balance sheet). Create a statement of cash flows for 2019 and 2018 using the indirect method.
PART II Analyze the Company
5. Ratio Analysis (ALL THREE YEARS)
Compute the following using the information from the financial statements you have produced for 2019. Show your work. Explain to me what every calculation means (i.e. explain the meaning of your answers, not repeating definitions of the ratios). Provide graphs which show the three year trends of each ratio.
? Earnings Per Share
? Price-earnings ratio
? Return on Equity
? Working Capital
? Current Ratio
? Quick Ratio
? AR Turnover
? Inventory Turnover
? Gross Profit
? Gross Profit Ratio
? Operating Income
? Operating Margin
? Debt-to-equity ratio
? Book value per share
6. Business Analysis
Separate from your ratio analysis, perform an analysis of your business using your results from the required calculations listed above and any other trend information you deem to be relevant. Use these calculations to determine how the company is doing overall. Hint: Consider creating graphs/tables to support your conclusions NOTE: Assume that you are the CEO of the company when preparing your response to this question.
7. Projected Income Statement for 2020
Build a projected income statement for next year based on forecasted sales that equal $3,500,000 (do not use a different amount than the $3,500,000 provided). Use the results of the analysis you performed in the preceding question and any other information you deem to be relevant to build this income statement. Provide a brief explanation of the method(s) your group used to determine the projected numbers per account.
8. Actual vs. Predicted Earnings Per Share Evaluation
Analysts predicted earnings per share (EPS) for your company to be $0.13 at the close of 2019. How does this compare to actual EPS for 2019? If actual EPS is higher than the analysts’ prediction, what factors contributed to the success? If actual EPS is lower than the prediction, how will you explain the shortfall to your investors? Is there anything you could have done to meet the prediction? NOTE: Assume that you are the CEO of the company when preparing your response to this question.
