ACCT 2013

Financial Statement Analysis Project

1. You will use two companies in the same industry and obtain their annual reports.

(You may get information about these companies only from the internet or a computer database through the library) Describe the principal product or service that each company provides, its main geographic area of activity, and the ending date of its last fiscal year.

2. Find at least articles, again using the internet, that discuss the current situation in this industry or that present information about your companies. A.) Summarize the main points of these articles. B.) Describe the industry and its outlook and summarize the companys future plans based on your research and on reading the annual report.

3. Look up both companies stock prices and record them each day for a week. On what stock exchange are the stocks traded? What are their ticker symbols?

4. Prepare a horizontal analysis of each company using their balance sheets for the last two years. Prepare a vertical analysis (common-sized) of each company using their income statements. Make comparisons between the two companies.

5. Prepare a comparison of the following ratios for the two companies:

1- Working capital

2- Current ratio

3- Receivable turnover

4- Average days sales uncollected (Days Sales in Receivables)

5- Inventory turnover

6- Average days inventory on hand (Days Sales in Inventory)

7- Profit margin

8- Asset turnover

9- Return on Assets (Net income / Average Total Assets)

10- Return on Equity (Net income / Average Total Equity)

11- Debt to equity

12- Price/earnings per share use the market price that correlates to the date of the EPS ratio on the respective income statement.

6. Examine the Statements of Cash Flows for Both Companies

1- Are cash flows from operations more or less than income for the past two years?

2- Are the companies expanding through investing activities?

3- What are the companies most important sources of financing?

4- Overall, has cash increased or decreased over the past two years?

7. Prepare three paragraphs giving your conclusions about these two companies. Each team member will act as a different financial statement user. One team member should evaluate the companies based on the investors point of view, one from the creditors point of view, and one from the managers point of view. Support your answer given the results of your analysis.

(The entire project should be from 6 to 10 pages in length.)

(You may use graphs or charts showing the results of your comparisons)

You may choose from the following:

Group 1 Industry Retail

Macys

Nordstrom

Group 2 Industry Retail (Home improvement)

Home Depot

Lowes

Proofread your project! Organization, neatness, and grammar matter. Include references

Macy's Financial Statements found on web. http://www.annualreports.com/HostedData/AnnualReports/PDF/NYSE_M_2016.pdf

The selected financial data set forth below should be read in conjunction with the Consolidated Financial Statements and the notes thereto and the other information contained elsewhere in this report. 2016 2015 2014 2013 2012* (millions, except per share) Consolidated Statement of Income Data: Net sales...................................................................................... $ 25,778 $ 27,079 $ 28,105 $ 27,931 $ 27,686 Cost of sales................................................................................ (15,621) (16,496) (16,863) (16,725) (16,538) Gross margin............................................................................... 10,157 10,583 11,242 11,206 11,148 Selling, general and administrative expenses ............................. (8,265) (8,256) (8,355) (8,440) (8,482) Impairments, store closing and other costs................................. (479) (288) (87) (88) (5) Settlement charges...................................................................... (98) Operating income........................................................................ 1,315 2,039 2,800 2,678 2,661 Interest expense........................................................................... (367) (363) (395) (390) (425) Premium on early retirement of debt .......................................... (17) (137) Interest income............................................................................ 4 2 2 2 3 Income before income taxes ....................................................... 952 1,678 2,390 2,290 2,102 Federal, state and local income tax expense ............................... (341) (608) (864) (804) (767) Net income .................................................................................. 611 1,070 1,526 1,486 1,335 Net loss attributable to noncontrolling interest........................... 8 2 Net income attributable to Macy's, Inc. shareholders................. $ 619 $ 1,072 $ 1,526 $ 1,486 $ 1,335 Basic earnings per share attributable to Macy's, Inc. shareholders ............................................................... $ 2.01 $ 3.26 $ 4.30 $ 3.93 $ 3.29 Diluted earnings per share attributable to Macy's, Inc. shareholders ............................................................... $ 1.99 $ 3.22 $ 4.22 $ 3.86 $ 3.24 Average number of shares outstanding................................................ 308.5 328.4 355.2 378.3 405.5 Cash dividends paid per share.............................................................. $ 1.4925 $ 1.3925 $ 1.1875 $ .9500 $ .8000 Depreciation and amortization............................................................. $ 1,058 $ 1,061 $ 1,036 $ 1,020 $ 1,049 Capital expenditures............................................................................. $ 912 $ 1,113 $ 1,068 $ 863 $ 942 Balance Sheet Data (at year end): Cash and cash equivalents .......................................................... $ 1,297 $ 1,109 $ 2,246 $ 2,273 $ 1,836 Total assets.................................................................................. 19,851 20,576 21,330 21,499 20,858 Short-term debt ........................................................................... 309 642 76 463 124 Long-term debt............................................................................ 6,562 6,995 7,233 6,688 6,768 Total Shareholders equity.......................................................... 4,322 4,253 5,378 6,249 6,051

Financial Statement for Nordstoms - http://investor.nordstrom.com/phoenix.zhtml?c=93295&p=irol-reportsannual

Nordstrom, Inc. Consolidated Statements of Earnings In millions except per share amounts Fiscal year 2016 2015 2014 Net sales $14,498 $14,095 $13,110 Credit card revenues, net 259 342 396 Total revenues 14,757 14,437 13,506 Cost of sales and related buying and occupancy costs (9,440) (9,168) (8,406) Selling, general and administrative expenses (4,315) (4,168) (3,777) Goodwill impairment (197) Earnings before interest and income taxes 805 1,101 1,323 Interest expense, net (121) (125) (138) Earnings before income taxes 684 976 1,185 Income tax expense (330) (376) (465) Net earnings $354 $600 $720 Earnings per share: Basic $2.05 $3.22 $3.79 Diluted $2.02 $3.15 $3.72 Weighted-average shares outstanding: Basic 173.2 186.3 190.0 Diluted 175.6 190.1 193.6