This document outlines an assignment to compare and contrast Exxon and Chevron's financial statements from 2012-2013. Students are asked to: 1) Compare single-step and multi-step income statements; 2) Analyze gross profit, operating profit, and net income to determine which company was more profitable; 3) Calculate price-earnings and price-to-sales ratios to assess earnings quality; 4) Review income statement notes and their investment implications; and 5) Cite at least three academic sources. The assignment requires a 5-6 page paper analyzing the companies' financial statements over the two years.

1. ACC 303 Assignment 1: Exxon versus Chevron
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Assignment 1: Exxon versus Chevron
Due Week 8 and worth 200 points
According to the textbook, the income statement measures the success of a company’s operations
for a given period. The income statement is important to investors and creditors, because it
determines the profitability, investment value, and creditworthiness of a company. Specifically,
the income statement helps investors and creditors predict the amounts, timing, and uncertainty
of future cash. Income statement preparers can make such informed predictions by analyzing a
company’s financial statements, calculating the price-earnings ratio, and reviewing notes to the
financial statements on the income statement.
In order to complete this assignment, use the Internet to research and review financial statements
for Exxon and Chevron for the years 2012 and 2013.
Write a five to six (5-6) page paper in which you:
1. Compare and contrast the limitations and usefulness of the single-step income statement
and the multi-step income statement.
2. Analyze the gross profit, operating profits, and net income of both Exxon and Chevron
for 2012 and 2013. Of the two (2) companies, speculate on the main reasons why one (1)
company may have been more profitable than the other company.
3. Compute each company’s price-earnings (P / E) ratio and price-to-sales ratio (PSR).
Identify primary estimates or assumptions that could result in overstated earnings, and
use the ratio data to compare the quality of each company’s earnings.
4. Review notes to both Exxon’s and Chevron’s financial statements. Next, identify at least
two (2) notes pertaining to the income statement, and explain the main way in which the
notes in question could influence your decision to invest in each of the companies.
Provide a rationale to justify your decision.

2. 5. Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and
other Websites do not qualify as academic resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all
sides; citations and references must follow APA or school-specific format. Check with your
professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s
name, the course title, and the date. The cover page and the reference page are not included in
the required assignment page length.
The specific course learning outcomes associated with this assignment are:
Analyze the functions and the main sections of the four (4) primary financial accounting
statements: the income statement, the statement of retained earnings, the balance sheet, and the
statement of cash flows.
Prepare the main sections of the four (4) primary financial accounting statements: the income
statement, the statement of retained earnings, the balance sheet, and the statement of cash flows.
Use technology and information resources to research issues in intermediate accounting
Write clearly and concisely about intermediate accounting using proper writing mechanics.