MODR 1760 Lecture Notes - Lecture 2: Moodle, Astronomical Object, Zoom Lens
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Financial Statement Analysis Project—A Comparative Analysis ofOracle Corporation and Microsoft Corporation
Here is the link for the financial statements for OracleCorporation for the fiscal year ending 2011. First, select 2011using the drop-down arrow labeled Year on the right-hand side ofthe page, and then select Annual Reports using the drop-down arrowlabeled Filing Type on the left-hand side of the page.
You should select the 10k dated 6/28/2011 and choose to downloadin PDF, Word, or Excel format.
http://www.oracle.com/us/corporate/investor-relations/sec/index.html
Here is the link for the financial statements for MicrosoftCorporation for the fiscal year ending 2011. You need to press theword Go on the left-hand side of the page. Then you shouldselect the 10k dated 7/28/2011 and choose to download in Word orExcel format.
http://www.microsoft.com/investor/SEC/default.aspx?year=2011&filing=annual
A sample project template is available for download in DocSharing. The sample project compares the ratio performance ofTootsie Roll and Hershey using the 2012 financial statements ofTootsie Roll and Hershey provided at their websites.
Description | |
This course contains a Course Project. You will be required tosubmit one draft of the project at the end of Week 5 and the final,completed project at the end of Week 7. Using the financialstatements for Oracle Corporation and Microsoft Corporation,respectively, you will calculate and compare the financial ratioslisted further down this document for the fiscal year ending 2011and prepare your comments about the two companies’ performancebased on your ratio calculations. The entire project will be gradedby the instructor at the end of the final submission in Week 7, andone grade will be assigned for the entire project.
Overall Requirements | |
For the Final Submission
Your final Excel workbook submission should contain thefollowing items. You cannot use any software but Excel to completethis project.
A completed worksheet title page tab, which is really acoversheet with your name, the course, the date, your instructor’sname, and the title for the project.
A completed worksheet profiles tab that contains a one-paragraphdescription regarding each company with information about theirhistories, what products they sell, where they are located, and soon.
All 16 ratios for each company, with the supporting calculationsand commentary on your worksheet ratio tab. Supporting calculationsmust be shown either as a formula or as text typed into a differentcell. The ratios are listed further down this document. Yourcomments for each ratio should include more than just a definitionof the ratio. You should focus on interpreting each ratio numberfor each company and support your comments with the numbers foundin the ratios.
The Summary and Conclusions worksheet tab is an overallcomparison of how each company compares in terms of the majorcategory of ratios described in Chapter 13 of your textbook. A niceway to conclude is to state which company you think is the betterinvestment and why.
The Bibliography worksheet tab must contain at least yourtextbook as a reference. Any other information you use to profilethe companies should also be cited as a reference.
Required Ratios for Final ProjectSubmission
Earnings per Share of Common Stock
Current Ratio
Gross Profit Margin
Rate of Return on Sales (Net Profit Margin)
Inventory Turnover
Days’ Inventory Outstanding (DIO)
Accounts Receivable Turnover
Days’ Sales Outstanding (DSO)
Asset Turnover
Rate of Return on Total Assets (ROA)
Debt Ratio
Times Interest Earned Ratio
Dividend Yield (For the purposes of this ratio, useYahoo Finance to look up current dividend yield and stock price;just note the date that you looked up thisinformation.)
Rate of Return on Common Stockholders’ Equity (ROE)
Free Cash Flow
Price/Earnings Ratio (Multiple) (For the purpose of thisratio, for Oracle, use the market price per share on May 30, 2011and for Microsoft, use the market price per share on June 30,2011.)
The Excel files uploaded inthe Dropboxes should not include any unnecessary numbers orinformation (such as previous years' ratios, ratios that were notspecifically asked for in the project, etc.).
Here are some of theMicrosoft Ratios – (first 12) to ensure you are on the righttrack.
1. EPS – $2.73
2. Current ratio – 2.6
3. Gross profit rate – 77.7%
4. Profit margin ratio – 33.1%
5. Inventory turnover – 14.8
6. Day in inventory – 25 days
7. Receivable turnover – 5.0
8. Average Collection Period – 73 days
9. Asset Turnover Ratio – 0.72
10. Return on Assets Ratio –23.8%
11. Debt to Total AssetsRatio – 47.5%
12. Times Interest Earned –96.2
Thank you.
Your original post is due by Day 4 by 11:59 PM Central Time. Your responses to at least three other original posts are due by Day 6 by 11:59 PM Central Time. Posts should take place on multiple calendar days throughout the week to generate conversation among students and the instructor. Posts are expected to be at least 150 words in length, well-written, APA formatted, meaningfully add to the conversation about the given topic, and incorporate material from the text and other sources into your original post and responses. Ethics and the Manager Tom Kemper Case Study Using the Tom Kemper Case Study, your textbook, and at least one outside source, share with your peers what you believe Tom Kemper should do. Explain your thought process in complete sentences. Include proper APA citations for the sources you use.
Discussion from tom Kemper and I need to make a question about waht I think of the Tom Kemper report.
Tom Kemper is the controller of the Wichita manufacturing facility of Prudhom Enterprises, Inc. The annual cost control report is one of the many reports that must be filed with corporate headquarters and is due at corporate headquarters shortly after the beginning of the New Year. Kemper does not like putting work off to the last minute, so just before Christmas he prepared a preliminary draft of the cost control report. Some adjustments would later be required for transactions that occur between Christmas and New Year’s Day. The following is a copy of the preliminary draft report, which Kemper completed on December 21:
Wichita Manufacturing Facility Cost Control Report December 21 Preliminary Draft | |||
Actual Results | Flexible Budget | Spending Variances | |
Labor-hours | 18,000 | 18,000 | |
Direct labor |  $   326,000 | $   324,000 | $ 2,000 U |
Power | 19,750 | 18,000 | 1,750 U |
Supplies | 105,000 | 99,000 | 6,000 U |
Equipment depreciation | 343,000 | 332,000 | 11,000 U |
Supervisory salaries | 273,000 | 275,000 | 2,000 F |
Insurance | 37,000 | 37,000 | 0 |
Industrial engineering | 189,000 | 210,000 | 21,000 F |
Factory building lease | 60,000 |    60,000 | 0 |
Total expense | $ 1,352,750 | $1,355,000 | $ 2,250 F |
Melissa Ilianovitch, the general manager at the Wichita facility, asked to see a copy of the preliminary draft report. Kemper carried a copy of the report to her office where the following discussion took place:
Ilianovitch: Wow! Almost all of the variances on the report are unfavorable. The only favorable variances are for supervisory salaries and industrial engineering. How did we have an unfavorable variance for depreciation?
Kemper: Do you remember that milling machine that broke down because the wrong lubricant was used by the machine operator?
Ilianovitch: Yes.
Kemper: We couldn’t fix it. We had to scrap the machine and buy a new one.
Ilianovitch: This report doesn’t look good. I was raked over the coals last year when we had just a few unfavorable variances.
Kemper: I’m afraid the final report is going to look even worse.
Ilianovitch: Oh?
Kemper: The line item for industrial engineering on the report is for work we hired Ferguson Engineering to do for us. The original contract was for $210,000, but we asked them to do some additional work that was not in the contract. We have to reimburse Ferguson Engineering for the costs of that additional work. The $189,000 in actual costs that appears on the preliminary draft report reflects only their billings up through December 21. The last bill they had sent us was on November 28, and they completed the project just last week. Yesterday I got a call from Laura Sunder over at Ferguson and she said they would be sending us a final bill for the project before the end of the year. The total bill, including the reimbursements for the additional work, is going to be …
Ilianovitch: I am not sure I want to hear this.
Kemper: $225,000
Ilianovitch: Ouch!
Kemper: The additional work added $15,000 to the cost of the project.
Ilianovitch: I can’t turn in a report with an overall unfavorable variance! They’ll kill me at corporate headquarters. Call up Laura at Ferguson and ask her not to send the bill until after the first of the year. We have to have that $21,000 favorable variance for industrial engineering on the report.