ONLY NEED TO DO PART 1!!
- Prepare a set of financial statements
- Analyze the financial statements
- Prepare a financial statement package
Purpose: This assignment pulls together all the learning objectives of the ACCOUNT 701 course. Thisincludes applying knowledge of basic accounting concepts, preparing financial statements, and being able to analyze and interpret key pieces of financial information. In addition, this project also incorporates written and verbal communication related tothe identification and discussion of strengthsand weaknesses of a given set of financial information.The majority of skills that we have worked through in ACCOUNT 701 will be used.To simplify your work with this project, I will provide the needed data in an Excel file format. This format should simplify the completion of the first part of the project. To allow for ample time to complete the first part of the project, I will distribute the data files to each group at the beginning of Module 7. PART 1 (DUE WEEK 8-Tuesday(midnight)| March 10, 2020Role:Youserve as asenioraccountant/top level manager for an organization. End Deliverable: Financial Statement PackageTo Be Completed:A.You will be givena trial balance type document that reflects past fouryears. You will need to use some creativity in deciding what type of business it is. Thisincludes coming up with a name, etc.B.You will create a set of financial statements for the time periodsprovided. The set of statements should include multistepincome statement, statement of equity,classifiedbalance sheetfor 2018 and2019, and statement of cash flows for 2019(indirect format).Theline items in statement of cash flowsshould clearly label the reason for change in cash.For example, use Increase (or decreasedepending onthe fact) in Accounts Receivableinstead of only Accounts Receivable; use Sale (or Purchase) of Equipmentinstead of Equipment, anduse Issuance (or Repurchase) of Common Stockinstead ofjustCommon Stock.C.The package should include a document that provides horizontal and vertical (common sized) analysis of the balance sheet and income statement.Similar to previous assignment, thehorizontal analysisshould cover one year (2019)and vertical analysisshould cover two years (2018 and2019).D.Graphs and other charts may be included in the financial statement package if youfeel they would assist in communicating the results of the business.These are NOT required.Page 2of 3E.The financial statement package needs to include calculationof relevant ratios, percentages, and other key financial highlights.A totaloffiveratios should be selectedfrom the following table and included in your financial statement package.Gross Profit PercentageNet Profit PercentageReturn on AssetsMarket to bookratioReturn on EquityEBIT PercentageEBITDA PercentageDividend payout percentageEarnings per shareDebt to equity ratioEquity ratioInterest coverageCurrent ratioQuick ratioInventory turnoverDays sales outstandingDays payable outstandingAsset turnoverPPE turnoverF.A cover letter needs to be preparedthat will sit on top of the financial statementpackage. Theletter canbe addressedto the board of directors of the business. The letter will be used to provide a brief introductionto the package as well as provide a few highlights aboutthe business. G.A PowerPoint needs to be used to create aboard presentation that summarizes the performance of the entity.The financial statement package should be complete (at least in raw form) prior tothe creation ofthe presentation. Be sure to cover pieces in the presentation that highlight the performance of the company. Concerns, highlights, and suggestions can be addressedbut the spin/focus of the presentation should be on the positiveaspectsof your organization.H.Once the PowerPoint is assembled,students of the same group shouldcontribute and prepare a recorded presentation(e.g.similar to the Module 1 discussion post). The presentationcan be about 10to 15minutes long. The easiest way to do this will probably be by combining group memebers’voice-over-PowerPointpresentation as a group presentation.It isacceptable if a team decides to have 2 or 3 memebers do the recording and the other member(s)takeresponsibility of other parts of theboard presentation.I.Thecompleted voice-over file and your financial statement packet (letter, financials, vertical and horizontal analysis, ratios, etc.) will be submittedto the Module 8discussion form by the end of Tuesday –March 10, 2020.NOTE: The financial statement package needs to be in a single combined PDF file.Thiswill be similar to the PDFs that you submitted during the course (specifically, the Week 5Financial Statement Analysis assignment). J.The discussion post reference in step I should include a shortwritten“welcome and introduction”to the discussion audience.Page 3of 3SUMMARY OF PART 1:The goal behind part 1 of this project is to assemble a presentation that you will share with the board membersof the company (assume you work for the companyas the accounting team). The deliverables will include the financial statement package (in PDF form) and the boardroom presentation (audio/visual recording). ADDED TIPS AND SUGGESTIONS: 1.HAVE FUN:Have fun with the assignment. You will have to make up assumptions about what the business is, what the business is doing, what the plans are for the future. Try and make up a story that fits the numbers and bring that story into the presentation. We have worked hard to get to this point –so have some fun with this assignment.2.RETAINED EARNINGS CHECK FIGURE:The trial balancedocument that I provide includes all of the accounts that will be needed to prepare the required financial statements. For each period, I have provided a beginning of year retained earnings number. If the financial statements are preparedcorrectly, all numbers will be used, and the calculated end of period retained earning number will equal the beginning of period retained earnings number for the subsequent period. DUE DATE FOR PART 1:Canvas Discussion Post with Presentation and Financial Statement PackageMarch 10, 2020(midnight)