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financial accounting (Oracle company)

The purpose of this project is to develop and apply financial statement analysis skills based on an understanding of accounting. Please work in groups of no more than five people. You should turn in a hard copy of your work and present your findings on the last day of class.
Part I. Download annual reports from company website
Select a company from the following list of large companies headquartered in California.
Activision Blizzard
Adobe Systems
Aecom
Amgen
Applied Materials
Avery Dennison
Cisco Systems
Clorox
Disney
Gap
HP
Intel
Netapp
Netflix
Oracle
Qualcomm
Ross Stores
Sketchers
Symantec
Western Digital
Download the annual reports from the company’s website (usually under investors relations) or www.sec.gov. Extract the balance sheet, income statements, and statement of cash flows for fiscal years 2017, 2018, and 2019 and include them in your report. It is your job to format the financial statements properly (e.g., include balance sheets as of the end of the three years in one table). You may use Excel to format the financial statements and complete Parts II – V and then copy and paste the tables and charts to your report. Include the financial statements in Appendix A of your final report.
Part II. Balance Sheets
1. Identify the auditor and include the information as a note below the balance sheet.
2. Create a pie chart of the firm’s assets for the most recent year, highlight the firm’s most significant asset by “pulling” the slice out of the pie. If there are too many accounts under the firms’ assets section, aggregate accounts when you see fit. Include a legend.
3. Create another pie chart that shows the firm’s current liabilities, long-term liabilities and equity for the most current year. On both pie charts remember to include a label and the date of the balance sheet. Include a legend.
4. Calculate all balance sheet items as a percent of total assets. This table is called common size balance sheets.
5. Calculate all balance sheet items in 2019 as a percent of corresponding items in 2017. This table is called trend balance sheets.
6. Include the charts and the tables in Appendix B of your final report.
Part III: Income Statements
1. Calculate all income statement items as a percent of sales. This table is the common size income statement.
2. Calculate all income statement items in 2019 as a percent of corresponding items in 2017. This table is called trend income statements.
3. Create a pie chart of the firm’s expenses for the most recent year, highlight the firm’s largest expense by “pulling” the slice out of the pie. If there are too many accounts under the firms’ expense section, aggregate accounts when you see fit. Include a legend.
4. Include the tables and the chart in Appendix C of your final report.
Part IV: Statement of Cash Flows
Prepare a table to report the following items for 2017-2019. Include it in Appendix D of your report.
o Cash flow from Operations
o Cash flow from Investing
o Cash flow from Financing
Part V: Stock Price and Trading Volume Graphs
1. Download the monthly closing stock price and the trading volume of the companies being analyzed into an Excel spreadsheet. A useful site to obtain this information is: http://finance.yahoo.com. Search for the company by name and then click on “Historical Data”. You should download monthly data for the period November 2018 through October 2020.
2. Use the graph function in Excel to plot
1) A line graph of the monthly closing stock prices and,
2) A bar graph of the monthly trading volume for the 24 months. Remember to label the charts and the axis. Insert a text box on the volume graph that identifies the stock market on which the company’s shares are traded on. Copying an existing graph is not acceptable.
3. Perform a range analysis by calculating the maximum, minimum, average and median share price for the 24-month period below the stock price data. Organize this data in a manner that is visually pleasing.
4. Include the above graphs and analysis in Appendix E of your report.
Part VI: Financial Statement Analysis
1. Compute the ratios for fiscal 2018 and 2019.
o Price/Earnings Ratio
o Current Ratio
o Receivable Turnover Ratio
o Working Capital
o Return on assets
o Financial Leverage Ratio
o Quick Ratio
o Total Assets Turnover Ratio
o Net Profit Margin
o Inventory Turnover Ratio
o Primary (Basic) earnings per share
o Return on equity
2. Select a major competitor of the company from the same industry. Download its annual report from www.sec.gov. Compute the above financial ratios.
3. From the annual reports of the firm of interest and its competitor, find out the following information for each firm (if it is disclosed).
(1) The amount of bad debt expense and the amount of bad debts written off for the most recent fiscal year;
(2) Inventory costing method for the most recent fiscal year;
(3) Depreciation method for the most recent fiscal year;
(4) Did the company issue bond in the most recent year? If yes, how much did they raise from issuing bond? Did the company have bonds outstanding?
(5) Did the company issue stocks in the most recent year? If yes, how much did they raise from issuing stock?
4. Include the above analysis in Part VI in Appendix F of your report.
5. Write a short report (no more than 3 pages long). In the report, you should analyze the common size and trend balance sheets and income statements and the charts prepared in Parts II and III and the cash flow data from Part IV. Interpret the financial ratios you compute for the company of interest relative to its peer and to its past performance. State clearly which company you would recommend to an investor and the rationale for your recommendation. Include the tables and charts from Parts I-VI as appendices.

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