1. Prepare a Statement of Cash Flows for the current year using the indirect method. Use the following template. 2. Using horizontal analysis, prepare a Comparative Balance Sheet.Copy the financial statements on Blackboard into an Excel spreadsheet and Insert a column to add the percentages. 3. Using vertical analysis, prepare a Comparative Income Statement. Copy the financial statements on Blackboard into an Excel spreadsheet and insert a column to add the percentages. 4. Using the financial statements in the practice set (located on Blackboard), calculate the ratios below: (Use the following templates shown here in the practice set) a. Working Capital both years b. Current Ratio both years Quick ratio both years d. Accounts Receivable Turnover 2020 e. Number of Days Sales in Receivables 2020 (Company policy states 30 days in receivables) 1. Inventory Turnover 2020 8. Number of Days Sales in Inventory 2020 (Company policy states 50 days to turn over inventory) h. Ratio of Liabilities to Stockholders' Equity 2020 1. Return on Total Assets 2020 Return on Stockholders' Equity 2020 C. 5. Acting as an accounting advisor to the firm, prepare a memo in which you analyze the financial statements you prepared in step two and prepare an analysis of the company's financial position. Identify two strengths and two weaknesses in the company. Make two recommendations to improve the company's financial position. Be specific in each of the recommendations and use as many of the ratios calculated in a-k and the vertical and horizontal analysis to support your explanation and analysis. If you do not use the ratios in your answer you will not credit for the memo. The length should be no more than three paragraphs; one for strengths, one for weaknesses and one for recommendations. 6. Blackboard Instructions a. Memo analyzing the company's strengths and weaknesses with two recommendations. Write your memo in a Word document using ratios to analyze the strengths and weaknesses of the company. Make sure there are no spelling. grammatical, or punctuation errors. Once it is completed make sure that you print it out and then rewrite it in Blackboard. Add information concerning numbers using the format as shown here below and enter it into Blackboard as specified: b. When the answer is in units enter the number as is (See example below) 1280 When the answer is for ratios (i.e. Current ratio) and has a decimal take it out two decimal spaces (See example below) i. 280.89 d. When ratios are in days/times take out to two decimal places and write days or times after the number (See example below) i. 280.96 days or times e. When the answer is in dollars ALWAYS include a dollar sign, comma in the dollar amount and cents as shown below: $280.83 or $3,800.44 or $480.00 or $3,600.00 c. Stevie's Surfboard Tables, Inc. Statement of Cash Flow For the Year Ended December 31, 2020 Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to net cash flow from operating activities Depreciation Amortization Gain or Loss Changes in current operating assets and liabilities Net Cash Flow from Operating Activities Cash Flows from Investing Activities Cash received from sale Less cash used for purchases Net Cash Flow from Investing Activities Cash Flow from Financing Cash received from issuance of stock Less cash paid dividends or long-term debt Net Cash Flow from Financing Activities Increase or decrease in cash Cash at the beginning of the year Cash at the end of the year
