Part 2 Ethics
Microsoft Word - Project_Instruction Summer2_2020 ACCT 5315 W01 Project Summer 2 (mini term) 2020, due midnight, August 7th, 2020 (Friday) Administrative instructions: 1. This individual project consists of two parts. Please review the summary of financial ratio file posted in this section and assigned readings and practice problems in Modules 1, 2, 4, 5, and 9 before working on this project. The expected time to complete this project is eight hours. 2. Content and values: Part 1: Financial reporting in the automotive industry 80 points (1) Common-size analysis (i.e., vertical analysis; not necessary to show calculations) (2) Liquidity ratios (show equations and calculations underneath the table) (3) Solvency ratios (show equations and calculations underneath the table) (4) DuPont Model (show equations and calculations underneath the table) Part 2: Ethics case (memo) 20 points Total: 100 points 3. Your answers will be graded on accuracy. Percentage values should be rounded to two decimal places, for example, 3.50%. Values should be rounded to two decimal places as well, for example, 1.25. 4. A single electronic pdf copy of solutions for this project is due midnight, August 7th, 2020 (Friday). Part 1: Automotive industry: 1) No more than four pages; 2) Delete the financial statements (i.e., Sheet 1) in the part 1 excel file. Part 2: Ethics memo: 1) No more than one page. Note: Convert all of your answer to a single pdf file and then name it as Last name_First name. 5. Submission 1) Upload your pdf file in the Project section on Blackboard. 3) Before submission, make sure to check whether your pdf file converted properly. Incomplete files might result in a failing grade. If you do not know how to covert excel files to pdf files, please follow the instruction file about the process or contact Ms. Dar or Ms. Calderon for suggestions. Sheet 1 Financial Statements Name: Student ID: Summary income statements and balance sheets are presented for Ford and General Motors for fiscal year 2001 (In millions). For additional information, their Web sites (and ticker symbols) are www.ford.com (F) and www.gm.com (GM). Note that these numbers are for over all operations, not just automotive. Note: These financial statements are partial statements. Income Statement (in millions) FordFordGMGM Fiscal Year12/31/0112/31/0012/31/0112/31/00 Revenue$162,412$170,064$177,260$184,632 COGS125,706140,499130,942145,664 Gross Profit36,70629,56546,31838,968 SG & A13,60211,84723,30222,252 Interest Expense10,84810,9028,5909,552 Tax Expense(2,151)2,7057682,393 Net Income(5,453)3,4676014,452 Balance Sheet (in millions) FordFordGMGM Fiscal Year 12/31/0112/31/0012/31/0112/31/00 Cash & Marketable Securities$7,218$4,851$18,555$10,284 Receivables, Trade (Net)3,1526,272141,394135,002 Inventories6,1917,51410,03410,945 Total Current Assets36,26039,310193,843208,920 Total Fixed Assets33,12137,50834,90833,977 Total Assets276,543284,421323,969303,100 Total Current Liabilities 44,54643,32764,24663,156 Total Liabilities268,757265,811304,262272,925 Total Stockholders' Equity7,78618,61019,70730,175 Cash Flow Statement (in millions) FordFordGMGM Fiscal Year12/31/0112/31/0012/31/0112/31/00 Cash Flow from Operations$22,764$33,764$9,166$10,871 Cash Flow from Investing(17,169)(9,867)(23,171)11,313 Cash Flow from Financing (2,976)(8,521)22,372(890) (1) Common Size Analysis Name: Student ID: (1) Common-size analysis - Given the information in Sheet 1 :a) Complete the following tables using common-size analysis; b) Summarize the highlights from common-size analysis for these companies and indicate possible red flags following the tables. Income Statement - Common Size FordFordGMGM Fiscal Year12/31/0112/31/0012/31/0112/31/00 Revenue100%100%100%100% COGS Gross Profit SG&A Net Income Balance Sheet - Common Size FordFordGMGM Fiscal Year12/31/0112/31/0012/31/0112/31/00 Cash & Marketable Securities Receivables, Trade (Net) Inventories Total Current Assets Fixed Assets, net Total Assets100%100%100%100% Total Current Liabilities Total Liabilities Total Equity (2) Liquidity Name:Student ID: (2) Given the information in Sheet 1, Calculate the liquidity ratios for Ford and GM. Show calulations following the table. FordGM Year20012001 Current Quick (3) Solvency Name: Student ID: (3) Given the information in Sheet 1, a) Calculate the solvency ratios. Show Calculations following the table. b) Do you have any concerns about their abilities to meet their debt obligations? FordGM Year20012001 Liabilities to Equity Interest Coverage (Times Interest Earned) (4) DuPont Model Name: Student ID: (4) Given the information in Sheet 1, calculate the DuPont Model. Show calculations following the table. DuPont Model FordGM Year20012001 Profit Margin (PM) Asset Turnover (AT) Return on Assets (ROA) Financial Leverage (FL) Return on Equity (ROE)