User Account

All Pages

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

Objectives of financial statement analysis, OBJECTIVES OF FINANCIAL STATEME...

OBJECTIVES OF FINANCIAL STATEMENT ANALYSIS Financial Statements are analyzed by dissimilar users for dissimilar purposes. Some of the purposes are as under- 1. To recognize

Define about assets and liabilities, Q. Define about Assets and Liabilities...

Q. Define about Assets and Liabilities? Assets are feasible future economic benefits obtained or controlled by a particular entity as a result of past events or transactions.

What is internal control - control of cash, What is Internal control - Co...

What is Internal control - Control of cash Internal control refers to procedures and methods a business uses to protect its assets. Checks are written for all transactio

Explain about accountants record expenditures, Q. Explain about Accountants...

Q. Explain about Accountants record expenditures? Accountants record expenditures on physical resources such like buildings, land and equipment that benefit future periods as a

State the classified balance sheet, State the classified balance sheet ...

State the classified balance sheet ASSETS Current Assets are cash and any other assets which are expected to be realized in cash, sold, used up or expire within one year.

Last-in first-out inventory, Q. Last-in first-out inventory? LIFO (last...

Q. Last-in first-out inventory? LIFO (last-in first-out): Ending inventory contains of the oldest costs. LIFO presumes that the costs of the most recent purchases are the first

Ethics on corporate governance, Critique the Ethics of those involved in th...

Critique the Ethics of those involved in the News of the World phone hacking scandal. Demonstrate in your critical analysis how the use of Ethics by the parties involved could have

Student, In Excel, I need help with formulas

In Excel, I need help with formulas

Explain about going-concern concept, Q. Explain about Going-concern concept...

Q. Explain about Going-concern concept? Except strong evidence exists to the contrary accountants assume that the business entity will continue operations into the indefinite

Hi, Purchase of office supplies what is the account classification?

Purchase of office supplies what is the account classification?

Write Your Message!

Captcha
Order Assignment

Featured Services

Order Now

Popular Subjects

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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