Purpose
of Assignment 

This activity helps
students recognize the significant role accounting plays in providing financial
information to management for decision making through the evaluation of
financial statements. This experiential assignment requires students to use
ratios to evaluate and analyze a company’s liquidity, solvency, and
profitability. 

Assignment
Steps 

Resources:
Generally Accepted
Accounting Principles (GAAP), U.S. Securities and Exchange Commission (SEC),
University Library, Library resources: Company Directories and Financials 

Tutorial help on Excel^®
and Word functions can be found on the Microsoft^® Office website.
There are also additional tutorials via the web offering support for Office
products. 

Select a publicly traded, U.S.
corporation with which you are familiar or one where you currently work or have
worked in the past.

Research the company on the
Internet and download the Income Statement, Statement of Shareholders’ Equity,
Balance Sheet, and Statement of Cash Flows.

Develop a minimum 700-word
examination of the financial statements and include the following:

• Determine the net income for
  the current fiscal year (FY). Is this income up or down from the prior
  year? 
• Explain the relevance of
  changes in net income to investors.
• Determine the ending balance in
  shareholders’ equity. Why would organizations such as labor unions be
  interested in this?
• Determine the total value of
  assets. 
• Discuss the relevance of the
  total value of assets to potential creditors and why this is important.
• Compute the return on assets.
  Discuss the relative profitability of the company based on your results.
• Compute the working capital and
  current ratio. Evaluate the relative liquidity of the company based on
  your results.
• Compute the debt to assets
  ratio and the free cash flow for your company. Analyze the results and
  comment on the relative solvency of the company.
• Discuss how the financial
  statements are used in your current role or a position you would like to
  hold. How might these aid you in managerial decision making?

Show
your work in Microsoft^®
Word or Excel^®. 

Complete
calculations/computations
using Microsoft^® Word or Excel^®.   

Include the four financial
statements along with your assignment.