Purpose of Assignment

This week’s focus is on the preparation of financial reports for  internal users, such as managers. This case study applies the concepts  of managerial accounting, through comparative and ratio analysis, and  requires students to identify financial data needed by managers for  decision making.

About Your Signature Assignment

This signature assignment is designed to align with specific program  student learning outcome(s) in your program. Program Student Learning  Outcomes are broad statements that describe what students should know  and be able to do upon completion of their degree. The signature  assignments may be graded with an automated rubric that allows the  University to collect data that can be aggregated across a location or  college/school and used for program improvements.

Assignment Steps

Resources: Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Committee (SEC)

Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.

Scenario: You are a loan officer for White Sands  Bank of Taos. Paul Jason, president of P. Jason Corporation, has just  left your office. He is interested in an 8-year loan to expand the  company’s operations. The borrowed funds would be used to purchase new  equipment. As evidence of the company’s debt-worthiness, Jason provided  you with the following facts:

2017 2016   Current Ratio 3.1 2.1   Asset Turnover 2.8  2.2   Net Income Up 32% Down 8%   Earnings per Share $3.30 $2.50

Jason is a very insistent (some would say pushy) man. When you told  him you would need additional information before making your decision,  he acted offended and said, “What more could you possibly want to know?”  You responded you would , at minimum, need complete, audited financial  statements.

Develop a minimum 700-word examination of the financial statements and include the following:

  • Explain why you would want the financial statements to be audited.
  • Discuss the implications of the ratios provided for the lending  decision you are to make. That is, does the information paint a  favorable picture? Are these ratios relevant to the decision? State why  or why not.
  • Evaluate trends in the performance of P. Jason Corporation. Identify  each performance measure as favorable or unfavorable and explain the  significance of each.
  • List three other ratios you would want to calculate for P. Jason  Corporation, and in your own words explain in detail why you would use  each.
  • As the loan officer, what else would you do to gain a better  understanding of Paul Jason’s, and the Corporation’s financial picture  and why?
  • Based on your analysis of P. Jason Corporation, will you recommend  approval for the requested loan? Provide specific details to support  your decision.

Format the assignment consistent with APA guidelines.

Second part:

Financial Statement Analysis and Decision Making Activity

Companies :Medtronic and Boston Scientific. 

Purpose of Assignment

The activity requires students to perform research and analysis on  competing companies and the potential implications of international  standards. This real-world analysis is key to understanding how a  company’s profitability, liquidity, and solvency can be useful for all  users. Students also learn to analyze financial statements and use  managerial tools to make decisions from an investor’s and creditor’s  standpoint.

Assignment Steps

Resources: U.S. Securities and Exchange Commission (SEC), websites such as Annual Reports (

Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.

Select two competing companies, one of which must be  an international company, and locate annual reports for these two  companies on the Internet.

Research the two companies on the Internet and  download the Income Statement, Statement of Shareholders’ Equity,  Balance Sheet, and Statement of Cash Flows.

Develop a minimum 525-word examination of the financial statements and include the following:

  • Make a 5-year trend analysis for each company, using 2011 as the base year, of:
    • Net sales.
    • Net income. Discuss the significance of the trend results.
  • Compute for 2015 and 2014 the:
    • Debt to assets ratio.
    • Times interest earned. How would you evaluate each company’s solvency?
  • Compute for 2015 and 2014 the:
    • Profit margin.
    • Asset turnover.
    • Return on assets.
  1. Return on common stockholders’ equity. How would you evaluate each company’s profitability? 
  2. Evaluate the financial opportunity presented by the companies. If  you were a creditor, which company would you be more likely to lend  money to? Defend your decision.
  3. Which company would you recommend as an investment?  Discuss the items that were considered in your decision.
  • Research global implications for the international company selected.  How might changing environmental factors affect organizational  choices?
  • Consider the ethical climate (internal or external) of your chosen  companies. Describe the ethical issues and impact on the stakeholders.  What has been/is being done to resolve these issues? Do you agree with  these methods for resolution? If not, what might you do differently?

Show your work in Microsoft® Word or Excel®.

Complete calculations/computations using Microsoft® Word or Excel®.

Include the four financial statements along with your assignment.

Format your assignment consistent with APA guidelines.

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