Name:_________Zilin Li________ Name:__________Yueran Chen____ Name:__________Sylvia Tang _____ __ Accounting 211 Annual Report Analysis Using the financial statements you have prepared for the Behrend Company, complete the following questions. Use your Excel horizontal and vertical analyses to answer the following. Income Statement Analysis 1. By how much did net sales increase or (decrease) from 2012 to 2013? $ 216600 By how much is it predicted to increase from 2013 to 2014? $ 111300 2. By what percentage did net sales increase or (decrease) from 2012 to 2013? 24.2 % By how much is it predicted to increase from 2013 to 2014? 10.0 % 3. Net sales can change either due to the quantity sold, or because the same quantity is sold at a different price. What is the reason for the Net Sales change for this company? Net sale will increase if more quantities are sold and it will decrease if fewer quantities are sold (both under the condition of same price). If the same quantity is sold at a different price, the net sales will increase if the price is charge at a higher amount. The net sales will decrease if the price is charge at a lower amount. 4. What was the COGS Percentage for the first year of operations (2012)? -56.9 %_ What was the COGS Percentage for the second year of operations (2013)? -55 %_ What is the COGS Percentage projected for the third year of operations (2014)? -45 %_ 5. Cost of Goods Sold (“COGS”) decreased from the first year to the second year and from the second year to the third year. Normally, we would expect that when sales increase, the cost of those sales would also increase. How could a large increase in the quantity sold help lower the cost of each unit being purchased or manufactured for sale? Possibility 1: since there is always fixed cost, the higher amount of goods sold lowers the fixed cost per unit sold. Possibility 2: when a company produce more goods for sold, the company is likely to get a discount from material/inventory suppliers, which lowers the product cost per unit produced. Possibility 3: When a company produces one additional good, the cost of each unit decreases. The company should produce at marginal revenue equal marginal cost to maximize profit. 6. How much is the Company’s total gross margin in dollars in 2012? _$_ 386400 In 2013? _$_ 504900 In 2014? _$673365 7. What is the total gross margin percent in 2012? 43.1 % In 2013? _ 45 % In 2014? __ 55 % 8. How much is the Company’s operating expenses in dollars in 2012_$_ -362000 In 2013? _$_ -312463 In 2014? _$_ -598944 9. What is the operating expenses percentage in 2012? _ -49 % In 2013? _ -28 % In 2014? _ -40.4 % 10. What would cause operating expenses to decrease from the start-up year until the first full year, and then increase as a percentage of net sales as they ramped up their operations? Operating expenses decrease because the company cuts its labor an.

1. Name:_________Zilin Li________
Name:__________Yueran Chen____
Name:__________Sylvia Tang _____
__
Accounting 211
Annual Report Analysis
Using the financial statements you have prepared for the
Behrend Company, complete the following questions. Use your
Excel horizontal and vertical analyses to answer the following.
Income Statement Analysis
1. By how much did net sales increase or (decrease) from 2012
to 2013? $
216600
By how much is it predicted to increase from 2013 to 2014? $
111300
2.
By what percentage did net sales increase or (decrease) from
2012 to 2013? 24.2
%
By how much is it predicted to increase from 2013 to 2014?

2. 10.0
%
3.
Net sales can change either due to the quantity sold, or because
the same quantity is sold at a different price. What is the
reason for the Net Sales change for this company?
Net sale will increase if more quantities are sold and it will
decrease if fewer quantities are sold (both under the condition
of same price). If the same quantity is sold at a different price,
the net sales will increase if the price is charge at a higher
amount. The net sales will decrease if the price is charge at a
lower amount.
4.
What was the COGS Percentage for the first year of operations
(2012)?
-56.9
%_ What was the COGS Percentage for the second year of
operations (2013)?
-55
%_ What is the COGS Percentage projected for the third year
of operations (2014)?
-45
%_
5.
Cost of Goods Sold (“COGS”) decreased from the first year to
the second year and from the second year to the third year.
Normally, we would expect that when sales increase, the cost of
those sales would also increase. How could a large increase in
the quantity sold help lower the cost of each unit being
purchased or manufactured for sale?
Possibility 1: since there is always fixed cost, the higher

3. amount of goods sold lowers the fixed cost per unit sold.
Possibility 2: when a company produce more goods for sold, the
company is likely to get a discount from material/inventory
suppliers, which lowers the product cost per unit produced.
Possibility 3: When a company produces one additional good,
the cost of each unit decreases. The company should produce at
marginal revenue equal marginal cost to maximize profit.
6.
How much is the Company’s total gross margin in dollars in
2012? _$_
386400
In 2013? _$_
504900
In 2014? _$673365
7.
What is the total gross margin percent in 2012?
43.1
%
In 2013? _
45
% In 2014? __
55
%
8.

4. How much is the Company’s operating expenses in dollars in
2012_$_
-362000
In 2013? _$_
-312463
In 2014? _$_
-598944
9.
What is the operating expenses percentage in 2012? _
-49
%
In 2013? _
-28
% In 2014? _
-40.4
%
10.
What would cause operating expenses to decrease from the
start-up year until the first full year, and then increase as a
percentage of net sales as they ramped up their operations?
Operating expenses decrease because the company cuts its labor
and supply/ shipping cost from 2012 to 2013. The company

5. realized that they are spending too much money on operating
expense. One possible explanation is, when the company first
enter the market, it have low net sales because it didn’t have
many customers. Therefore, there left many finished goods
unsold. In the coming year, the company cut the labor cost and
supply cost which lowers the operation expense. However, the
company then has a bigger market share (more customers,
higher reputation) which leads to higher net sales. Goods unsold
were successfully sold out. Therefore, it cause operating
expenses to decrease from the start-up year until the first full
year, and then increase as a percentage of net sales as they
ramped up their operations.
Balance Sheet Analysis
1.
Using your Vertical Analysis for your balance sheet, list the two
assets that represent the largest percentage impact on total
assets at the end of 2014.
Percentage of

6. ASSET
Total Assets
1.
Accounts Receivable
35.6
%__
2.
Building-Net of A/D

7. 51.2
%__
2.
Using your Horizontal Analysis for your balance sheet, list the
two assets that increased or decreased by the largest dollar
amount, from 2013 to 2014.
Increase/(Decrease)
ASSET
in Dollars

8. 1.
Inventory
___$ 34600
2.
Building-Net of A/D
___$ 213000
3.
Using your Horizontal Analysis for your balance sheet, list the

9. two assets that increased or decreased by the largest percentage
from 2013 to 2014.
Increase/(Decrease)
ASSET
in Percentage
1.

10. Inventory
1193.1
%__
2.
Building-Net of A/D
244.8
%__
4.
Using your Vertical Analysis for your balance sheet, list the two
Liabilities/Stockholders’ Equity items that represent the largest
percentage impact on total liabilities/shareholders’ equity at the
end of 2014.

11. Percentage of
LIAB/STOCKHOLDERS’ EQUITY
Total Liab/Equity
1.
Utilities Payable
11.9
%__
2.
Retained Earnings

12. 46.6
%__
5.
Using your Horizontal Analysis for your balance sheet, list the
two Liabilities/Stockholders’ Equity items that increased or
decreased by the largest dollar amount from 2013 to 2014.
Increase/(Decrease)
LIAB/STOCKHOLDERS’ EQUITY
in Dollars

13. 1.
Interest Payable
___$ 2791
2.
Utilities Payable
___$ 50858
6.
Using your Horizontal Analysis for your balance sheet, list the
two Liabilities/Stockholders’ Equity items that increased or
decreased by the largest percentage from 2013 to 2014.

14. Increase/(Decrease)
LIAB/STOCKHOLDERS’ EQUITY
in Percentage
1.
Interest Payable
558.2

15. %__
2.
Utilities Payable
273.4
%__
Ratio Analysis
Compute the following ratios for the projected 2014 (budgeted)
operations. The 2013 analysis is completed. Indicate in the far
right column if the Company expects to get BETTER based on
their budget, have NO CHANGE, or get WORSE based on each
ratio. Do your work in the boxes provided below.
1.
TESTS OF LIQUIDITY (Measures a company’s ability to pay
debt in the short term):
Liquidity Ratios
2014
2013
Analysis?
1) Working Capital
349036
290837
BETTER
2) Current Ratio
2.47:1

16. 2.64:1
WORSE
3) Quick Ratio
2.32:1
2.62:1
WORSE
4) Accounts Receivable Turnover (use net sales and ending A/R
balance)
5.32
6.79
WORSE
5) Avg. # of Days to collect A/R
68.61
53.76
BETTER
6) Inventory Turnover (use ending inventory)
27.27
78.97
WORSE
7) Avg. # of days to sell Inventory
13.38
4.62
BETTER
2.
TESTS OF SOLVENCY (Measures a company’s ability to pay
long-term debt, and its financing structure):
Solvency Ratios
2014
2013
Analysis?
8) Debt to assets ratio

17. 0.4042:1
0.3787:1
NO CHANGE
9) Debt to equity ratio
0.6784:1
0.6096:1
BETTER
10) Times interest earned (Since we have not calculated a tax
expense, use “0”)
4.72
96.22
WORSE
11) Plant assets to long-term liabilities
6.6
2.34
BETTER
3.
TESTS OF PROFITABILITY (Measures a company’s ability to
generate earnings):
Profitability Ratios
2014
2013
Analysis?
12) Net (profit) margin
0.0479
0.1711
WORSE
13) Asset turnover
(Use total assets instead of average)
2.32
3.26
BETTER

18. 14) Return on investment ("ROI")
(Use total assets instead of average)
0.1113
0.5572
WORSE
15) Return on equity
(Use total stockholders’ equity instead of average)
0.1834
1.011
WORSE
4.
TESTS OF THE STOCK MARKET (Measures market
performance of a company’s stock):
Behrend Corporation began on January 1, 2012, they issued
5,000 shares of no-par common stock for $50,000.
Stock Market Ratios
2014
2013
Analysis?
16) Earnings per share (BASIC)
11.73
38.09
WORSE
17) Book value per share
69.81
58.17
BETTER
18) Price-Earnings Ratio
(Use an average market price of $37.00 and $32.00 per share for
2014 and 2013, respectively)
3.15

19. 0.84
WORSE
19) Dividend Yield (Use average market price noted in #18.)
0
0
NO CHANGE
Based on your results above, answer the following questions:
1. Overall, is the company expecting profitability to get better
or worse? Explain. Be specific given the profitability ratios
you prepared above.
The company expecting profitability to get worse
Based on the table above, the Net margin, ROI and Return on
equity this company from 2013 to 2014 are getting worse.
12) Net (profit) margin
0.0479
0.1711
WORSE
13) Asset turnover
(Use total assets instead of average)
2.32
3.26
BETTER
14) Return on investment ("ROI")
(Use total assets instead of average)
0.1113
0.5572
WORSE
15) Return on equity
(Use total stockholders’ equity instead of average)

20. 0.1834
1.011
WORSE
2. If you were a banker, would you lend them money based on
their forecast? Why? Be specific given the liquidity and
solvency ratios you prepared above.
3. If you had the cash to invest in the stock of this corporation
would you do so? EXPLAIN WHY? Be specific given the
stock market ratios you prepared above. You must state YES
you would or NO you wouldn’t and why.
PAGE
6
This week we are discussing how HR systems can influence
business results and evaluating HRM practices which are
appropriate to minimize or eliminate organizational conflicts. In
the last few years there have been some improvement in this
area. Some great strategies have emerged from studies that link
HR performance and business performance. The outcomes were
exceptional especially within the auto industry. There have been
some familiar processes come out of it including the balanced
scorecard. The key is to focus on what is important and how an
organization can leverage their HR department to improve
efficiency. This is just what the balance scorecard represents.
For an organization to succeed they must consider their
stakeholders and what will make the customers happy. If you
think about what you like about a store when you shop consider
these elements, does it smell good such as a comfort food or
perfume? Some stores will have a stand in the middle of their
store which pipes the smells throughout the store. They may use
nuts or popcorn. Using the sense of smell to give the shoppers a
feeling of home may get them to feel motivated to buy more.
This is just a theory and research has been done to back it up as

21. well but it works. The other element is ambiance. How will the
customer feel when they walk in the door. Of course there are
several options the managers may go with such as a luxurious
feeling when you enter Nordstrom or Neiman Marcus. The
women will be encouraged to purchase perfume knowing the
sample sprayed on them is wonderful and may make them feel
beautiful. When you walk into a store like Target you get a
good feeling from all of the red colors and the bold colors of
their products.
There have been many companies that reorganized based on
what their HR team outlines as their focal points. They keep
their skilled staff and minimize the superfluous staff to hone in
on their most productive areas. Most of the larger companies
now use contractors to fill in the gaps in their workforce. They
may keep their most experienced workers and outsource their
least experienced staff
To participate in the following Discussion Forums, go to this
week's Discussion link in the left navigation:
1. Linking Strategy to HRM Practices
Read pages 177 -180 from the course text and imagine how
“Well-designed HR systems can influence business results.”
Read Fast Company’s article on SAS
(http://www.fastcompany.com/magazine/21/sanity.html) as well
as the article on CBS "60" minutes
(http://www.cbsnews.com/stories/2003/04/18/60minutes/main55
0102.shtml--), and visit the SAS website
(http://www.sas.com/corporate/index.html) to learn more about
the company.
Consider how SAS used organizational strategy to drive HRM
practices. What are they doing that is different than most
others? How and why did SAS do what they did? What was their
goal? How did it work out? How did it impact their employees
in terms of retention, satisfaction, and productivity? Could your

22. firm do what SAS did? Explain why or why not. Present your
views in 200 words or more in your discussion post. Respond to
at least two of your classmates’ postings. Remember to properly
cite your sources.
2. Conflicting HRM Systems
Almost every organization with more than 200 employees has at
least one significant conflicting HRM practice, which
undermines the total performance of the organization at least
marginally—examples abound. Discuss one or more conflicting
practices you have experienced and recommend one or more
alternative HRM practices that could appropriately minimize, or
even eliminate, the conflict. Explain in detail. Present your
views in 200 words or more in your discussion post. Respond to
at least two of your classmates’ postings. Remember to properly
cite your sources.