Microsoft Word - Project_Instruction Summer2_2020
ACCT 5315 W01 Project
Summer 2 (mini term) 2020, due midnight, August 7th, 2020 (Friday)
Administrative instructions:
1. This individual project consists of two parts. Please review the summary of financial ratio file posted
in this section and assigned readings and practice problems in Modules 1, 2, 4, 5, and 9 before
working on this project. The expected time to complete this project is eight hours.
2. Content and values:
Part 1: Financial reporting in the automotive industry XXXXXXXXXX80 points
(1) Common-size analysis (i.e., vertical analysis; not necessary to show calculations)
(2) Liquidity ratios (show equations and calculations underneath the table)
(3) Solvency ratios (show equations and calculations underneath the table)
(4) DuPont Model (show equations and calculations underneath the table)
Part 2: Ethics case (memo) XXXXXXXXXX20 points
XXXXXXXXXXTotal: XXXXXXXXXXpoints
3. Your answers will be graded on accuracy. Percentage values should be rounded to two decimal places,
for example, 3.50%. Values should be rounded to two decimal places as well, for example, 1.25.
4. A single electronic pdf copy of solutions for this project is due midnight, August 7th, 2020 (Friday).
Part 1: Automotive industry:
1) No more than four pages;
2) Delete the financial statements (i.e., Sheet 1) in the part 1 excel file.
Part 2: Ethics memo:
1) No more than one page.
Note: Convert all of your answer to a single pdf file and then name it as Last name_First name.
5. Submission
XXXXXXXXXXUpload your pdf file in the Project section on Blackboard.
XXXXXXXXXXBefore submission, make sure to check whether your pdf file converted properly. Incomplete
files might result in a failing grade. If you do not know how to covert excel files to pdf files,
please follow the instruction file about the process or contact Ms. Dar or Ms. Calderon for
suggestions.
Sheet 1 Financial Statements
Name: Student ID:
Summary income statements and balance sheets are presented for Ford and General Motors for fiscal year 2001 (In millions). For additional information, their Web sites (and ticker symbols) are www.ford.com (F) and www.gm.com (GM). Note that these numbers are for over all operations, not just automotive. Note: These financial statements are partial statements.
Income Statement (in millions)
Ford Ford GM GM
Fiscal Year 12/31/01 12/31/00 12/31/01 12/31/00
Revenue $162,412 $170,064 $177,260 $184,632
COGS 125,706 140,499 130,942 145,664
Gross Profit 36,706 29,565 46,318 38,968
SG & A 13,602 11,847 23,302 22,252
Interest Expense 10,848 10,902 8,590 9,552
Tax Expense (2,151) 2,705 768 2,393
Net Income (5,453) 3,467 601 4,452
Balance Sheet (in millions)
Ford Ford GM GM
Fiscal Year 12/31/01 12/31/00 12/31/01 12/31/00
Cash & Marketable Securities $7,218 $4,851 $18,555 $10,284
Receivables, Trade (Net) 3,152 6,272 141,394 135,002
Inventories 6,191 7,514 10,034 10,945
Total Cu
ent Assets 36,260 39,310 193,843 208,920
Total Fixed Assets 33,121 37,508 34,908 33,977
Total Assets 276,543 284,421 323,969 303,100
Total Cu
ent Liabilities 44,546 43,327 64,246 63,156
Total Liabilities 268,757 265,811 304,262 272,925
Total Stockholders' Equity 7,786 18,610 19,707 30,175
Cash Flow Statement (in millions)
Ford Ford GM GM
Fiscal Year 12/31/01 12/31/00 12/31/01 12/31/00
Cash Flow from Operations $22,764 $33,764 $9,166 $10,871
Cash Flow from Investing (17,169) (9,867) (23,171) 11,313
Cash Flow from Financing (2,976) (8,521) 22,372 (890)
(1) Common Size Analysis
Name: Student ID:
(1) Common-size analysis - Given the information in Sheet 1 :a) Complete the following tables using common-size analysis; b) Summarize the highlights from common-size analysis for these companies and indicate possible red flags following the tables.
Income Statement - Common Size
Ford Ford GM GM
Fiscal Year 12/31/01 12/31/00 12/31/01 12/31/00
Revenue 100% 100% 100% 100%
COGS
Gross Profit
SG&A
Net Income
Balance Sheet - Common Size
Ford Ford GM GM
Fiscal Year 12/31/01 12/31/00 12/31/01 12/31/00
Cash & Marketable Securities
Receivables, Trade (Net)
Inventories
Total Cu
ent Assets
Fixed Assets, net
Total Assets 100% 100% 100% 100%
Total Cu
ent Liabilities
Total Liabilities
Total Equity
(2) Liquidity
Name: Student ID:
(2) Given the information in Sheet 1, Calculate the liquidity ratios for Ford and GM. Show calulations following the table.
Ford GM
Year 2001 2001
Cu
ent
Quick
(3) Solvency
Name: Student ID:
(3) Given the information in Sheet 1, a) Calculate the solvency ratios. Show Calculations following the table. b) Do you have any concerns about their abilities to meet their debt obligations?
Ford GM
Year 2001 2001
Liabilities to Equity
Interest Coverage (Times Interest Earned)
(4) DuPont Model
Name: Student ID:
(4) Given the information in Sheet 1, calculate the DuPont Model. Show calculations following the table.
DuPont Model
Ford GM
Year 2001 2001
Profit Margin (PM)
Asset Turnover (AT)
Return on Assets (ROA)
Financial Leverage (FL)
Return on Equity (ROE)