Financial Reporting – 3rd Marking Period The Balance Sheet (200 pts.) Name ________________________________________________________ Due Monday, April 3rd (five points off for each late day). This assignment must be typed & printed. This assignment focuses on your company’s balance sheet. It will be broken into two sections: Current Assets & Current Liabilities and Long-term Assets. Upon completion, you should understand your company’s holdings of current assets and current liabilities and how well your company manages them. You will also have reviewed and evaluated decisions which your company’s management has made regarding long-term assets. Section 1: Current Assets and Current Liabilities Briefly describe the properties of current assets: _______________________________________________________________ _______________________________________________________________________________________________________________________ Briefly describe the properties of current liabilities: ____________________________________________________________ _______________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________ A) Identify the changes in current asset and current liability accounts that occurred during the most recent accounting period. Blank spaces have been provided for you to write in any additional items that appear on your company’s balance sheet. Current Assets Amount on most recent Balance Sheet Amount at end of prior year Net Change in Dollars Net Change in Percent (difference / previous year #) Cash & Cash Equivalents Temporary Assets (short-term investments, marketable securities, etc.) Accounts Receivable, net Other Receivables, net Inventories Total Current Assets These two numbers should match what is on the B/S Current Liabilities Amount on most recent Balance Sheet Amount at end of prior year Net Change in Dollars Net Change in Percent (difference / previous year #) Accounts Payable Other Payables Accounts Payable, net Accrued Salaries & Wages Deferred Tax Liabilities Accrued Interest Current maturities of long-term debt Other: (tell me what they are) Total Current Liabilities These two numbers should match what is on the B/S What significant changes (in amount or percentage) occurred during the most recent year among the current assets and current liabilities? Are any of the changes troubling? Are there any that you would want to investigate further if you were an owner or creditor of your firm? Discuss. ___________________________________________________________________________________________________________________________________ B) Effective management of receivables is c ...

1. Financial Reporting – 3rd Marking Period
The Balance Sheet (200 pts.)
Name
_____________________________________________________
___
Due Monday, April 3rd (five points off for each late day).
This assignment must be typed & printed.
This assignment focuses on your company’s balance sheet. It
will be broken into two sections: Current Assets & Current
Liabilities and Long-term Assets. Upon completion, you should
understand your company’s holdings of current assets and
current liabilities and how well your company manages them.
You will also have reviewed and evaluated decisions which
your company’s management has made regarding long-term
assets.
Section 1: Current Assets and Current Liabilities
Briefly describe the properties of current assets:
_____________________________________________________
__________
_____________________________________________________
_____________________________________________________
_____________
Briefly describe the properties of current liabilities:
_____________________________________________________
_______
_____________________________________________________
_____________________________________________________
_____________

2. _____________________________________________________
_____________________________________________________
_____________
A) Identify the changes in current asset and current liability
accounts that occurred during the most recent accounting
period. Blank spaces have been provided for you to write in any
additional items that appear on your company’s balance sheet.
Current Assets
Amount on most recent Balance Sheet
Amount at end of prior year
Net Change in Dollars
Net Change in Percent (difference / previous year #)
Cash & Cash Equivalents
Temporary Assets (short-term investments, marketable
securities, etc.)
Accounts Receivable, net
Other Receivables, net
Inventories

3. Total Current Assets
These two numbers should match what is on the B/S
Current Liabilities
Amount on most recent Balance Sheet
Amount at end of prior year
Net Change in Dollars
Net Change in Percent (difference / previous year #)
Accounts Payable
Other Payables

4. Accounts Payable, net
Accrued Salaries & Wages
Deferred Tax Liabilities
Accrued Interest
Current maturities of long-term debt
Other: (tell me what they are)
Total Current Liabilities

5. These two numbers
should match what is on the B/S
What significant changes (in amount or percentage) occurred
during the most recent year among the current assets and
current liabilities? Are any of the changes troubling? Are there
any that you would want to investigate further if you were an
owner or creditor of your firm? Discuss.
_____________________________________________________
_____________________________________________________
_________________________
B) Effective management of receivables is critical for most
firms. They must be able to collect their receivables in a timely
manner! Generally, if there is a change in receivables, there
should be a similar change in sales. Provide the following
information regarding sales, accounts receivables. In addition,
show the amount for allowance for bad debts (may also be
called allowance for doubtful accounts). This account provides
an estimate of how much of the accounts receivable the
company believes might never be collected. Your balance
sheet may say “Accounts Receivable, net”. The “net”
represents the amount of receivables less the allowance for bad
debt. This amount might be listed on the statement or in the
notes to the financial statements.
End of most recent year
End of Previous Year
Percent Change (difference / previous year #)
Sales Revenues

6. Gross Accounts Receivable
Less: Allowance for Bad Debt
Net Accounts Receivable
Are the percentage changes in accounts receivable and
allowance for bad debts similar to the changes in Sales or are
they different? Analyze and discuss the meaning or
implications of any differences you may observe.
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
C) Effective management of inventory is also critical for most
firms. They must be able to sell what they buy! Changes in the
level of inventory should be consistent with changes in the level
of cost of goods sold. For example, if the balance of inventory
increases sharply and there is not the same change in cost of
goods sold, it may be a signal of poor inventory management or
sales expectations that did not happen (they spent too much on

7. inventory that they never sold). Provide the following detailed
information regarding cost of goods sold and the various
categories of inventory. Note that for some of this information
you may have to look to the notes to the financial statements.
Blank spaces have been provided for you to write in any
additional items that appear on your company’s balance sheet.
End of most recent year
End of Previous Year
Percent Change (difference / previous year #)
Cost of Goods Sold
Merchandise Inventory
*Raw Materials Inventory
*Work in Process Inventory
*Finished Goods Inventory
Total Inventories
*Companies that manufacture goods may have these types of

8. inventory. If your company has them, please note them here.
Is the change in total inventories similar to the change in cost of
goods sold or different? Discuss the implications of any
differences that you observe.
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
Which inventory valuation methods are used by your firm? This
information usually provided in the first few notes to the
financial statements.
List all inventory methods and describe how that method
calculates the value of ending inventory:
Are inventories reported using lower-of-cost-or-market? What
does this mean?
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________

9. _____________________________________________________
_________________________
D) The following four ratios provide information about how
well a firm manages its current assets and current liabilities.
For each one, calculate the ratio for the most recent year and the
one before it. Compare the two and discuss what conclusions
can be drawn from the ratios and the trend of the change.
a. Current Ratio (current assets / current liabilities)
b. Quick (acid-test) ratio (quick assets / current liabilities)
c. Accounts Receivable turnover ratio (sales revenue / *average
accounts receivable)
d. Inventory turnover ratio (cost of goods sold / *average
inventory)
*average = beginning balance + ending balance / 2
E) In prior assignments, you were asked to discuss the
financials of your firm’s strongest competitor. Compute the
ratios listed above for that firm and discuss how it compares to
your firm’s findings.
Section 2: Long-term Assets
F) Long-term assets include plant (or fixed) assets, intangible
assets and long-term investments. Identify the changes in your
firm’s long term asset accounts that occurred during the most
recent accounting period. You may have to search the footnotes
and notes to the financial statements for some of this
information. Note that this chart summarizes all accumulated
depreciation onto one line. You may find it easier to show each
asset’s accumulated depreciation separately. Blank spaces have
been provided for you to write in any additional items that

10. appear on your company’s balance sheet.
Long-term Assets
Amount on most recent Balance Sheet
Amount at end of prior year
Net Change in Dollars
Net Change in Percent
Machinery & Equipment
Building/Leasehold Improvements
Land
Less: Accumulated Depreciation

11. Net Property, Plant & Equipment
Deferred Tax Assets
Long-term Investments
Goodwill
Patents, copyrights & Trademarks
These two numbers
should match what is on the B/S
Based on the information, briefly summarize the significant
changes in long-term asset accounts, if any, that occurred
during the most recent year.
_____________________________________________________
_____________________________________________________
_________________________

12. _____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
Which depreciation valuation methods are used by your firm?
Check all that apply:
_____ Straight-line
_______ Units of Production
______ Declining Balance
______ Other (specify)
___________________________________
If they use more than one, which is used most often?
_________________________________________
Does your firm disclose the estimated useful lives it assumes
for depreciating its tangible fixed assets. If yes, describe them.
Note that for some of this information you may have to look to
the notes to the financial statements.
_____________________________________________________
_____________________________________________________

13. _________________________
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
Does your firm report any intangible assets on the balance
sheet? If yes, describe the policies (method and estimated life)
your firm uses to compute amortization expense. Note that for
some of this information you may have to look to the notes to
the financial statements.
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
Does your firm report any natural resource assets on the balance
sheet? If yes, describe the policies (method and estimated life)
your firm uses to compute depletion expense. Note that for
some of this information you may have to look to the notes to
the financial statements.
_____________________________________________________
_____________________________________________________
_________________________

14. _____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
G) Did your firm acquire or dispose of any long-term assets
during the most recent year? If so, describe.
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________
_____________________________________________________
_____________________________________________________
_________________________