Fall 2020Dina Aburous1A Financial Accounting ProjectObjectiveThis is a nice project that introduces you to real companies’ financial reporting. It also encourages you to apply the knowledge and analytical skills you developed during this course to real situations. As you complete the analysis you will gain experience in relating broader economic factors to companies’ financial reports. For example, you are likely to see COGS decrease year over year when world oil prices go down. RequirementsIn pairs, or by yourself, obtain the 2019 annual reports (Form 10-k) for two manufacturing or retail companies of your choice. Make sure they are in the same industry (e.g. Target and Walmart). This is easily done by doing a quick internet search.Prepare a report in which you:Analyze how each company performed financially relative to the prior year (horizontal analysis). Start with the largest changes in the Income statements. Compare the numbers, is there growth in sales, in net income? Is there decline? Always look at % of change, not absolute numbers. Find out and discuss why the numbers appear to be improving, or declining. This can be easily done by reviewing the front part of the annual report where management discusses the year’s operations. For example, a company’s sales declined by 10% in 2019 relative to 2018, the explanation maybe because 50% of their sales are international and boarders have been closed with these countries (I am just making it up). Move on to the Balance Sheets. What were the largest changes in the balance sheet numbers? Pick two or three (other than cash) Explain the business drivers behind these changes. Again, this is done by reading the front part of the report.In the Cash Flow Statement identify the two largest investing activities and the two largest financing activities and explain in your words the strategies behind these activities – again, from reading the front part and looking at the relevant footnotes. Finally, compare the results of both companies for 2018 using two profitability ratios, two liquidity ratios and two solvency ratios (using chapter 13 or online information such as Investopedia or other resources). For each ratio, offer your conclusions for why one of the companies may be doing better than the other.Fall 2020Dina AburousThe reportKeep the report limited to 5 pages, typed, double-spaced, using 12-point font. Focus on what is important and relevant. Use your own words. Due date: Sunday November 22. There will be a way for you to upload it online. Attach the entire annual report for each company being discussed. Your analysis must include page references to relevant portions of the annual reports. For example, if you are explaining the changes with the boarder closure (as mentioned up) add the page number where you got that in parenthesis. You may use other material from financial media. If you do, make sure you show the link in your references at the end. Your report should include citations of any other material you use.GradingOverallPLAGERISMZeroWords used in the report are not those of the students, except if cited properly.LIMITED 4-5Very basic command of material, or lack of demonstrated effort. GOOD ENOUGH6-8Indicates good quality but does not merit special distinction.VERY GOOD9-10Indicates a full mastery of the case on hand and related concepts.GradeComprehension:3 pointsStudents miss relevant points, or do not make enough connection with the course material. Students at times report using opinions, not facts.Students engage with the course materials effectively, even though they may miss some relevant points.Students clearly grasp the key points and effectively use course concepts to discuss and add value to the case presented.Completeness:4 pointsMinimal effort demonstrated and incomplete analysis.Analysis is at times not clear and missing relevant information.Provided clear, concise and thorough analysis and added relevant information.Mechanics: 3 pointsThe writing or presentation of the material is hard to follow. Or the report contains too much media-sounding wording. The errors are not large enough to make understanding difficult. Students use their own words and material flows relatively easily.The writing is almost error-free. Students use their own words, material flows easily.Total grade