The assignment is attached below. We have sides 1-3 done and we have all the data you need to complete it.
ACTG 11 Introduction to Financial Accounting Financial Project Fall 2018 Financial Statement Project Requirements 1 Project Timetable The Project is worth 500 points 15% of your total grade Last quarter, 2/3 of class got > 90% Due Sunday March 7th (just before last week of classes) , by midnight 10 points off for each day its late You may choose to work individually or with one other person as a team. 20 points can be earned provided you prepare a detailed work plan with assigned roles for each team member, and submit that no later than Sunday Feb 28th (one week prior to due date). Groups will be established in Camino for these uploads 2 Project Requirement – Acctg 11A The Company to be analyzed is based on your minor: Entrepreneurship – Snap (SNAP) 12/31 y/e (10-K for 2020 filed) International Business – Spotify Technology S.A. (SPOT) 12/31 y/e (20-F for 2020 filed) Retail Studies – Best Buy (BBY) Jan 31 y/e (9 months ended Oct 2020 filed) Real Estate – AvalonBay (AVB) 12/31 y/e (9 months ended 2020 filed) Financial emphasis, MIS: any of the above, your choice 3 Project Requirement – Acctg 11 The Company to be analyzed – your choice: Snap (SNAP) 12/31 y/e Spotify (SPOT) 5/31 y/e Alphabet (formerly Google) (GOOG) 12/31 y/e Retail Studies – Best Buy (BBY) Jan 31 y/e (9 months ended Oct 2020 filed) Real Estate – Avalon Bay (AVB) 12/31 y/e (9 months ended 2020 filed) 4 Research Sources You will need to access certain financial and other information of the company: From SEC Website: Annual report on Form 10-K Quarterly report on Form 10-Q See the lecture on accessing information in Project Module Company press release of earnings – on the company’s “investor relations” tab on its website, or filed on Form 8-K Stock prices and dividends paid information Management’s conference call with analysts to discuss earnings – I will provide a transcript of the call on Camino Analyst reports – accessible through the SCU library website Investor presentations – find the most recent presentation contained in the investor relations tab on the website. 5 Project Report: Format 13+ page PowerPoint or Google Slides report The business world works in “slide decks” Don’t provide a Keynote presentation (Mac software); you can export it to PPT and then upload that you may extend one additional page maximum per required slide, except for those slides where the materials indicate you must limit yourself to one slide 6 Slide 1 Cover Slide Name of Company Date of most recent annual and interim financial information analyzed For the year ended December 31, 2020 and the nine months ended September 30, 2020 (for SNAP and GOOG) For the year ended December 31, 2020 and six months ended June 30,2020 for SPOT) For the year ended December 31, 2019 and the nine months ended September 30, 2020 (for AVB)* For the year ended January 31, 2020 and the nine months ended October 31, 2020 (for BBY) Your Names Due Date Even if the company has filed more recent financial information, you must use the dates specified above 7 bridget reynolds For the Year Ended January 28, 2019 and the six months ended July 29, 2018 November 26, 2018 Williams-Sonoma, Inc. Accounting 11 a project 8 Slide 2 Basic Company Information – Company Legal name and place of incorporation Location of the headquarters Name of the CEO and brief, no more than 3 lines, biography from website or from Proxy Statement Must be a comprehensive history Name of the stock exchange where the company’s stock is traded Price of the company’s stock as of the ending date of the most recent quarter covered by your financial analysis Sept 2020 for PLD Oct 2020 for BBY Dec 2020 for SNAP, SPOT and GOOG 9 Info Legal name: WILLIAMS-SONOMA, INC. Place of Incorporation: Delaware, US Headquarters located: San Francisco, US CEO – Laura J. Alber Joined Williams-Sonoma in 1995 as a senior buyer. Became president of Pottery Barn in 2002 and later of Williams-Sonoma in 2006. Became CEO in 2010. NYSE Company stock is traded at New York Stock Exchange Ticker Symbol: WSM Year ending Jan. 28, 2018 Most recent quarterly period ended Sunday July 29, 2018. Stock price of $56.18 on July 27, 2018, the last trading date of the quarter. Current information 10 Slide 2 Basic Company Information: Hints Price of the company’s stock as of the ending date of the most recent Quarter covered by your financial analysis If the quarter ended on a Saturday or Sunday, use the closing price as of the previous Friday. “Closing pricing on December 28, the last trading date of the quarter, was $xx.xx 11 Slide 3 Overview of Busines Identify the principal industry(ies) the Company operates in. Describe the industry and its outlook Identify at least three main competitors to the company as reported in the 10-K Summarize the company’s future plans based on your research the Company’s investor presentation, along with the business section of the 10-K, may prove useful in preparing this slide. 12 Slide 3 Overview Of Business Industry Outlook Rising consumer spending and disposable income will boost sales in the industry as well as increase spending on and competition between luxury companies within this industry. As tech-savvy millennials begin to dominate the market, companies in the industry are focusing on their e-commerce sales. Discount retailers offering home-centered assortments (HomeGoods) large department stores (Macy’s) other speciality retailers (Crate & Barrel) other e-commerce websites (Wayfair) other direct-mail catalogs (Frontgate) Competitors Future plans International expansion across 6 continents will tap into markets of opportunity valued at $350 billion enhance and strengthen core offerings with newness and aesthetic variations cater to the millennial customer through investment and enhancement of customers’ digital experience Operates within the specialty home furnishings and housewares industry which includes multi-channel specialty retailers of various home products. Identify the principal industry(ies) the Company operates in. Describe the industry and its outlook Identify at least three main competitors to the company as reported in the 10-K/20-F. Summarize the company’s future plans based on your research the Company’s investor presentation, along with the business section of the 10-K, may prove useful in preparing this slide. 13 Slide 3 Overview of Business: Hints Describe the industry and its outlook A common error has been to talk about the Company, rather than the industry Identify at least three main competitors to the company as reported in the 10-K If competitors are not named, but rather types of competitors, then list at least three types of competitors, and give an example for each type For example, Williams Sonoma listed its competitors as: “online retailers (such as Amazon)”. “omni-retailers (such as Macy’s) “specialty retailers (such as xxx) 14 Slide 4 Balance Sheet Information – Provide a summary balance sheet for the most recent fiscal period and, the two most recent annual periods (i.e., 3 in total) Most recent period is end of year SNAP and GOOG Sep 2020, Dec 2020 and Dec 2019 SPOT Jun 2020, Dec 2020 and Dec 2019 Most recent period is nine month data: BBY Oct 2020, Jan 2020 (2/1) and Jan 2019 (2/2) AVB Sep 2020, Dec 2019 and Dec 2018 You must limit this to one slide – combine line items as necessary 15 Slide 4 Balance Sheet Information: Hints Summary balance sheets for three periods: You must limit this to one slide – combine line items as necessary Do not condense too much. At a minimum, I would expect to see separately shown: Cash Accounts Receivable Inventory (n/a for software and service companies) Property Accounts payable Bank Debt All appropriate subtotals and totals (current assets, total assets. current liabilities, total liabilities, total equity, total liabilities & equity) Be sure it adds up – don’t exclude amounts - combine 16 Slide 4 Balance Sheet Information Would have included the Jan. 2017 balance sheet as well – 3 columns of data Slide 5 Balance Sheet Analysis Calculate the following amounts/ratios for the interim balance sheet and most recent annual balance sheet presented on Slide 4 Working capital Current ratio Days sales in receivables Inventory turnover* Asset turnover ratio Return on assets* (shown as a percentage) Debt to equity ratio* Return on equity* (shown as a percentage) *These ratios will be covered in coming chapters 18 6.6 9.8% 9.8% 3.2% 19 Slide 5-1 Appendix Provide the calculations used for the Balance Sheet Analysis in Slide 5 Provide any other supplemental calculations you were unsure of and would like partial credit if incorrect. DO NOT merely put down the formulas for calculating things like asset turnover or days sales in receivables. The purpose of this slide is to see the actual numbers used in the computations. 20 Slide 5 Balance Sheet Analysis: Hints Three types of calculations Based solely on balance sheet information Working capital Current ratio Debt to equity ratio* Based solely on income statement information (Slide 6) Gross Margin Return on Sales Net profit margin Uses both balance sheet and income statement information Days sales in receivables Inventory turnover* Asset turnover ratio Return on assets* Return on equity* You have to annualize interim information to have comparable data Addressed in a recorded lecture 21 Why annualizing certain interim data is so important Assume sales of $1,000,000 in 2018 Sales in first 6 months of 2019 are $500,000 (on pace to equal 2018) Receivables have stayed constant - $100,000 2018 Turnover 1,000,000/100,000 = 10x (36 days sales in receivables) 2019 Turnover 500,000/100,000 = 5x ??????? A pre-recorded lecture in the Project Module will discuss how to adjust this 22 Slide 6 Operating Results Provide summary income statement data for (1) the most recent year-to-date period; (2) the comparable year-to-date period in the prior year, (3) the last annual period and (4) the prior year amounts. Limit to one page – However, it must add up (i.e., all information included) and must show at a minimum: Revenues Gross profit Gross margin % Operating profit Return on sales % Any large, unusual items of other income(expense) Income before taxes Provision for Income taxes Net income Net profit margin % Effective Tax Rate % Earnings Per share, Basic and Diluted (from financials, do not calculate yourself) Dividends per share for the most recent year and 6 or 9 months (if paid; indicate NA if none paid) 23 Calculate yourself from information on this slide; do not rely on outside sources Slide 6 Operating results six months ended Basic earnings per share$1.17$1.07$3.03$3.45 Diluted earnings per share$1.16$1.06$30.2$3.41 Dividends per share$0.86$0.78$1.56$1.48 Gross margin36.2%35.4%36.5%37.0% Return on sales5.7%6.2%8.6%9.3% Net profit margin3.9%4.0%4.9%6.0% Effective tax rate29.7%35.8%42.7%35.3% show subtotals Slide 7 Analysis of Operating Results Compute the percentage change from the prior period information for the year-to date and annual information presented in Slide 6 for: Revenues Gross profit Operating Profit Net Income Net Income Per Share