Accounting Assignment, Accounting Basics

Assignment Help:

Go to https://moneycentral.msn.com and look up the companies Lowe’s (symbol: LOW) and Home Depot (symbol: HD).

To the left, you will see several different tabs. At the bottom, you will see one titled “FINANCIALS”. Below this header is a link to Income Statement, Balance Sheet and Statement of Cash Flow. Each of these tabs will give you five years’ worth of financial information.

1. Below are ten financial ratios. Run the following ratios for the past THREE years on both companies. You MUST show all computations to receive credit for this part.
1) Current ratio = Current assets / Current liabilities

2) Quick ratio = Cash, short-term investments, and net receivables / Current liabilities

3) Current cash debt ratio = Net cash provided by operating activities / Average current liabilities

4) Receivables turnover = Net sales / Average trade receivables (net)

5) Inventory turnover = Cost of good sold / Average inventory

6) Asset turnover = Net sales / Average total assets

7) Profit margin on sales = Net income / Net sales

8) Rate of return on assets = Net income / Average total assets

9) Debt-to-total assets ratio = Total liabilities / Total assets

10) Cash debt coverage ratio = Net cash provided by operating activities / Average total liabilities


2. Using your interpretations of the ratios above, answer the questions below. (Note: you must explain which ratio(s) you used and how you applied that ratio to determine each answer).

a) Which company is more liquid?
b) Which company is doing a better job of managing receivables?
c) Which company is doing a better job of managing inventory?
d) Which company is better utilizing its assets?
e) Which company is better able to meet their debt obligations?

3. Go back to https://moneycentral.msn.com and go to the links on the left. Under the “FUNDAMENTALS” tab, you will find SEC Filing information for each company. Retrieve the 10-K’s for both companies for the most recent year.


Answer the following questions:

a) What is the difference between the 10K, the 10Q and the 8K reports?

b) How does each company value its inventory (FIFO, LIFO, etc….)

c) How does each company establish their Allowance for Doubtful accounts?

d) Does each company appear to fully disclose anything that can impact future performance

e) Is either company in jeopardy of being a going concern? (Please see the article I have posted about the “Growing Concern of Going Concern” over things you should evaluate to make this determination.


4) List two things that would be different if the financials for either company were prepared using IFRS. Be sure to thoroughly cite all sources used to answer this question.

Related Discussions:- Accounting Assignment

Show recording changes in assets, Q. Show Recording changes in assets? ...

Q. Show Recording changes in assets? Recording changes in assets, liabilities, and stockholders' equity While recording commerce transactions remember that the foundation of

Describe the methods of recording, Q. Describe the methods of recording? ...

Q. Describe the methods of recording? Two general deductions from gross sales are (a) sales discounts and (b) sales returns and allowances. Sellers trace these deductions in co

Consistency concept, Consistency Concept In practice, there are some m...

Consistency Concept In practice, there are some manners to record an event or a transaction in the books of account. For illustration, the trade discount on raw material purch

Explain about stable dollar assumption, Q. Explain about stable dollar assu...

Q. Explain about stable dollar assumption? In the United States accountants make one more assumption regarding money measurement that the stable dollar assumption. Under the st

The type of accounting concerned with providing information, The type of ac...

The type of accounting concerned with providing information and analyses to managers within the organization is referred to as

Revenue recognition, Revenues from the theatrical supply of motion pictures...

Revenues from the theatrical supply of motion pictures are recognized when motion pictures are exhibited. Television licensing revenues are recorded while the program material is a

Show the chart of accounts, Q. Show the Chart of accounts? Chart of acc...

Q. Show the Chart of accounts? Chart of accounts -- a listing of all accounts or categories into that businesstransactions would be classified and recorded. Every account gener

Account, #quthe books of deven verma could not be tallied.the accountant tr...

#quthe books of deven verma could not be tallied.the accountant transferred the difference of Rs.1270 in the suspense account on the debit side the following mistakes were found la

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd