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Name: Part 4 Financial Analysis Case relates to the textbook Modules 7 and 8. Requirements: Use this Word Document as your template to complete Part 4. Please answer the requirements in the order they...

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Name:
Part 4 Financial Analysis Case relates to the textbook Modules 7 and 8.
Requirements: Use this Word Document as your template to complete Part 4. Please answer the requirements in the order they are set up on the template, which follows the requirements listed below. Upload your completed Part 4 by clicking on the Part 4 Financial Analysis Case link. Please save your file with the initial of your first name and your last name. Also, include your name on the first page of the template submission. Use single space with proper English. Answer the following questions for each company using the 10-K document and Part 2 of the Financial Analysis Case. You can use direct references from the reports, but make sure you explain or comment in your own words. Do not use the interactive Data file to answer Part 4 of the Financial Analysis Project. The author of the text uses the reference of footnotes to the financial statements. Many companies use the terminology notes to the financial statement, which is a synonymous term to footnotes to the financial statements. It is important for you to understand that the notes to the financial statements are an integral part of the audited financial statements. Do not ignore the notes to the financial statements in your analysis.
J.C. Penney Company Inc. (Ticker: JCP) for year ended Feb. 1, 2020 Direct link to 10-K https:
www.sec.gov/ix?doc=/Archives/edga
data/1166126/ XXXXXXXXXX/jcp-0201202010k.htm

Kohl’s Corporation (Ticker KSS) for year ended Feb XXXXXXXXXXDirect link to 10-K https:
www.sec.gov/ix?doc=/Archives/edga
data/885639/ XXXXXXXXXX/kss-10k_ XXXXXXXXXXhtm
1. Operating liabilities arise from ordinary operations and provide a less expensive source of financing. Answer the following questions:
a. Identify the cu
ent operating liabilities(only include liabilities that will impact operating expenses) for each company and the applicable common-size percentage for each operating liability in the cu
ent year using your common-size balance sheet from part 2 of the financial analysis case. Explain why you picked these as the cu
ent operating liabilities. Operating liabilities were discussed in Module 4, but relates to module 7 with the continuation of the discussion on liabilities.
    
    List cu
ent operating liabilities and applicable common-size percentage for each account for the most recent year.
    JCP
    
    Kohl’s
    
Explanation:
. Identify the largest cu
ent operating liability for each company and explain why this cu
ent operating liability is so large compared to the other cu
ent operating liabilities. You should also use the notes to the financial statements to provide more detailed information of the
eakdown of cu
ent operating liabilities.
c. What cu
ent liabilities did you not include in your analysis of cu
ent operating liabilities? Make sure you list out each of the cu
ent liabilities that were not included in “a”. Explain why you did not include them.
    JCP
    
    Kohl’s
    
Explanation:
d. Read the notes to the financial statements of each company related to contingencies. Identify what these contingencies are for each company and how the company is reporting or not reporting these contingencies in the financial statements. Provide the page number of where you found this information.
    JCP
    
    Kohl’s
    
2. Using the Common-size statements from part 2 and notes to the financial statements answer the following questions:
a. What are the common-sized percentages of long-term debt for each company in the cu
ent year? Use your common-sized balance sheets from Part 2.
    JCP
    
    Kohl’s
    
. Using the appropriate financial statement what is the amount of long-term debt outstanding that is not a portion of cu
ent liabilities? Name the financial statement you found this information. Using the notes to the financial statements, what is the maturity date range of the long-term debt, and provide the page number you found this information?
    
    Total Dollar amount of long-term debt stated on a financial statement that is not a portion of cu
ent liabilities and name of financial statement
    Maturity Date range
    Page note reference.
    JCP
    
    
    
    Kohl’s
    
    
    
c. How much is considered cu
ent maturity of this long-term debt for the cu
ent year if applicable? What financial statement and subsection was this information found or if there is no cu
ent maturity of long-term debt where should it be found?
    In Millions
    How much is considered cu
ent maturity of this long-term debt for the cu
ent year if applicable?
    What financial statement and subsection was this information found or if there is no cu
ent maturity of long-term debt where should it be found?
    JCP
    
    
    Kohl’s
    
    
d. Identify the financial statement that shows the issuance and/or payment of long-term debt for cash in the cu
ent year. Provide the name of the section of the financial statement that provides this information even if there was no debt issued or paid and provide the specific action that is occu
ing (issuance and/or payment of long-term debt for cash) with the debt and the amount(s) of issuance and/or payment of long-term debt.
    
    Financial Statement
    Name of section
    Action and Amount of issuance and/or payment of long term debt
    JCP
    
    
    
    Kohl’s
    
    
    
3. Find the JCP and Kohl’s credit ratings for long-term debt using the following resources: Moody’s and Standard and Poor’s.
You will need to register. You do not need to pay for these services.  These are the registration websites:  
https:
www.moodys.com
egisterinfo.aspx?from=Nav_Reg
https:
www.standardandpoors.com/en_US/we
guest
egiste
a. What are the credit ratings from each of these agencies in reference to long-term debt for Standard and Poor’s Global it is listed as local cu
ency? Also, include the date of the rating.
    
    Moody’s
    Standard and Poor’s Global-local cu
ency LT
    JCP
    
    
    Kohl’s
    
    
. Are the two companies similarly rated? Which one is higher rated? Explain what the ratings mean for each company. Read over pages 7-21 and 7-22 in the textbook.
4. Use the balance sheet and the statement of stockholders’ equity to determine how the company has structured its equity.
a. What proportion of assets is financed with equity per your common-sized balance sheet of the cu
ent year from Part 2? Explain what this percentage means and discuss how the two companies compare to each other.
    
    Proportion of assets financed with equity
    JCP
    
    Kohl’s
    
Explain what this percentage means.
. Using the consolidated statements of stockholders’ equity statement or statements of changes in shareholders’ equity in the 10-K provide what accounts make up the stockholders’ equity do these companies have? The accounts are listed at the top going horizontally for JCP. The accounts are listed in bold in the left panel for Kohl’s.
    JCP
    
    Kohl’s
    
c. What transactions occu
ed in stockholders’ or shareholders’ equity or investment during the cu
ent year? The transactions are listed vertically on the left side of the statement. For Kohl’s, you need to reference the transactions listed affecting the accounts.
    JCP
    
    Kohl’s
    
d. Using the statements of stockholders’ equity or statement of changes in shareholders’ equity, provide the number of shares repurchased, which is the same thing as treasury stock and the total dollar amount of this repurchase for the cu
ent year if applicable.
    In Millions
    #shares
    Total dollar amount repurchased
    JCP
    
    
    Kohl’s
    
    
e. Using the consolidated statements of shareholders’ equity, are there any employee stock-based payment or stock options listed? What was the total amount of the stock-based compensation or stock options as shown on this statement in the total column? Go to the notes of the financial statements and explain who receives this stock-based compensation. Also, provide the page number you found this note information.
    In Millions
    Are there any employee stock-based payment or stock options listed?
    What was the total amount of the stock-based compensation or stock options shown on this statement in the total column?
    Go to the notes of the financial statements and explain who receives this stock-based compensation. Also, provide the page number you found this note information.
    JCP
    
    
    
    Kohl’s
    
    
    
5. As discussed in the text, the least costly form of financing is internal, which is reinvesting profits into new investments is a low-cost means to grow the company and return even more to stockholders.
a. Review the consolidated statements of comprehensive income/loss for the cu
ent year or if there is not a statements of comprehensive income/loss find the statement that lists comprehensive income on it. List all the accounts that are used in computing comprehensive income for the cu
ent year and the dollar amount for each of these accounts that impact cu
ent comprehensive income or if there is not a statement of comprehensive income provide the statement you found the comprehensive income and the dollar amount of the comprehensive income.
    In Millions
    All accounts that affected Comprehensive income for cu
ent year or if there is no statement of comprehensive income, where did your find comprehensive income.
    The dollar amount for each of these accounts that impact cu
ent comprehensive income during cu
ent year or if there is no statement what is the comprehensive income.
    JCP
    
    
    Kohl’s
    
    
. Which financial statements does the accumulated other comprehensive income/loss (AOCI) show up on? Read over the discussion of AOCI on ages 8-20 to 8-22 and explain why AOCI should be examined.
    
    Name the financial statements that includes AOCI
    JCP
    
    Kohl’s
    
Explain why AOCI should be examined.
c. Provide the financial statement that shows or would show the amount of dividends paid in the cu
ent year and the section name of that statement. What was the total amount of the dividends paid, if the company paid dividends? Compute the dividend payout for the cu
ent year, if the company paid dividends. Explain what the dividend payout ratio represents? Please review Page 8-17 to read the discussion on the dividend payout ratio.
    In Millions
    Provide the financial statement that shows or would show the amount of dividends paid in the cu
ent year and the section name of that statement.
    Total Amount of Dividends paid in dollar amount
    JCP
    
    
    Kohl’s
    
    
    
    Dividend Payout should be shown as a percentage. Show your computation. The calculation is Common stock dividends per share/Basic earnings per share in the textbook, but another way to determine dividend payout if per share information is not easily available is to calculate using total cash dividends paid/net income.
    JCP
    
    Kohl’s
    
Explain what the dividend payout ratio represents?
d. Which statement can you find the basic and diluted earnings per share (EPS) attributable to the continued operations of the shareholders of the company? What is the basic EPS for the cu
ent year? What is the diluted EPS for the cu
ent year? Comment on the trend of EPS and how diluted EPS has been impacted.
    
    Name the financial statement
Answered Same Day Jul 14, 2021

Solution

Khushboo answered on Jul 24 2021
144 Votes
Name:
Part 4 Financial Analysis Case relates to the textbook Modules 7 and 8.
Requirements: Use this Word Document as your template to complete Part 4. Please answer the requirements in the order they are set up on the template, which follows the requirements listed below. Upload your completed Part 4 by clicking on the Part 4 Financial Analysis Case link. Please save your file with the initial of your first name and your last name. Also, include your name on the first page of the template submission. Use single space with proper English. Answer the following questions for each company using the 10-K document and Part 2 of the Financial Analysis Case. You can use direct references from the reports, but make sure you explain or comment in your own words. Do not use the interactive Data file to answer Part 4 of the Financial Analysis Project. The author of the text uses the reference of footnotes to the financial statements. Many companies use the terminology notes to the financial statement, which is a synonymous term to footnotes to the financial statements. It is important for you to understand that the notes to the financial statements are an integral part of the audited financial statements. Do not ignore the notes to the financial statements in your analysis.
J.C. Penney Company Inc. (Ticker: JCP) for year ended Feb. 1, 2020 Direct link to 10-K https:
www.sec.gov/ix?doc=/Archives/edga
data/1166126/000116612620000022/jcp-0201202010k.htm
Kohl’s Corporation (Ticker KSS) for year ended Feb. 1 2020 Direct link to 10-K https:
www.sec.gov/ix?doc=/Archives/edga
data/885639/000156459020011512/kss-10k_20200201.htm
1. Operating liabilities arise from ordinary operations and provide a less expensive source of financing. Answer the following questions:
a. Identify the cu
ent operating liabilities(only include liabilities that will impact operating expenses) for each company and the applicable common-size percentage for each operating liability in the cu
ent year using your common-size balance sheet from part 2 of the financial analysis case. Explain why you picked these as the cu
ent operating liabilities. Operating liabilities were discussed in Module 4, but relates to module 7 with the continuation of the discussion on liabilities.
    
    List cu
ent operating liabilities and applicable common-size percentage for each account for the most recent year.
    JCP
    Merchandise accounts payable -10%, other accounts payable and accrued expenses- 12%, cu
ent operating lease liabilities -1%
    Kohl’s
    Accounts payable-8%, Accrued liabilities-8%, Income tax payable-0.3%
Explanation: All these are related with the primary business operations of the company and they are non-interest bearing and these are connected with the ordinary activities of the entity.
. Identify the largest cu
ent operating liability for each company and explain why this cu
ent operating liability is so large compared to the other cu
ent operating liabilities. You should also use the notes to the financial statements to provide more detailed information of the
eakdown of cu
ent operating liabilities.
The largest cu
ent operating liability for each company is accounts payable and accrued liabilities as these are directly related with the day to day operations of the entity and the main business activity is related with the purchase of merchandise and other related expenses such as payment of salaries, taxes and other expenses connected with the daily operations of the entity and thus payables will be high in case of each entity.
c. What cu
ent liabilities did you not include in your analysis of cu
ent operating liabilities? Make sure you list out each of the cu
ent liabilities that were not included in “a”. Explain why you did not include them.
    JCP
    cu
ent portion of finance lease and notes payable and cu
ent maturities of long term debt
    Kohl’s
    cu
ent portion of finance lease and financing obligations and operating leases.
Explanation: All the above mentioned cu
ent liability are not considered as operating liabilities because they are not related with the day to day expenses of the entity. It is clear that the operating liability are related with the primary business operations of the company and they are non-interest bearing
d. Read the notes to the financial statements of each company related to contingencies. Identify what these contingencies are for each company and how the company is reporting or not reporting these contingencies in the financial statements. Provide the page number of where you found this information.
    JCP
    Page no.93. As of Fe
uary 1, 2020 there is estimated accrual of $19 million in connection with potential environmental liabilities related to underground storage tanks and remedy of environment related condition and if losses were incu
ed at the estimated amount it is believed that such losses will not have any material effect on the result of operation or financial position.
    Kohl’s
    Page no.57. It is related to the legal...
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