'Calculated based on net income attributable to shareowners of The Coca-Cola Company Refer to Notes to Consolidated Financial Statements 61 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUTTY (In millions except per share data) Refer to Notes to Consolidated Financial Statements. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS The home furnishings industry can be characterized as having customers that are moderately sensitive to price, an attribute affected by the wide range of prices in this industry (from less than $10 for simple home products to several thousand dollars for high-end furniture). There are many suppliers offering similar products, which is good for retail industry profitability. In addition, the home furnishing industry promotes its products directly to consumers via advertising and coupons. Marketing costs can be quite high in this sector. Einancial Ratio Analysis Working Capital - Pier 1 has a positive working capital which implies it has the ability to meet its currently maturing debts. This working capital increased from $367,369,000 in 2019 to $486,075,000 in 2020 implying its current position is getting stronger. Current Ratio - Pier 1's current ratio increased from 2019 to 2020 implying its ability to meet current obligations is getting stronger. Both years show strong ratios with a ratio of 2.68 in 2020 which means it has enough current assets to meet its current liabilities more than two times. Accounts Receivable Turnover and Days' Sales in Receivables - AR Turnover decreased from 35 to 32 implying Pier 1 is not collecting its receivables as fast in 2020 than in 2019. However this turnover is still strong since Days' Sales in Receivables is only 13 days in 2020. It appears Pier 1 does not have a problem collecting receivables with most receivables collected in less than a month. Ratio of Net Sales to Average Total Assets - Pier 1 has kept this ratio steady only decreasing from 1.7 to 1.6 in 2020 . Pier 1 appears to be effectively using its assets to generate profit. Note: These are not all the ratios that you need to detail. You would include a short description for each ratio and include your calculations on a separate sheet (as instructed). Chapter 14 describes each of these ratios and Exhibit 13 on pages 710711 is a good summary of the calculations for each ratio. Summary and Conclusion Pier 1 is in a strong financial position, quite capable of sustaining and growing current levels of earnings while taking on additional growth in retail space and number of stores with little or no additional long-term debt. A fundamental and differentiating strength of Pier 1 is its ability to successfully manage its cost of sales, the primary component of profit margin, which drives return on assets and return on common shareholder equity. In general and overall, as this analysis shows, Pier 1 is a profitable and low-risk company; a strong retail performer that should continue to succeed well into the future. Financial Ratios: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables 6. Inventory turnover 7. Number of days' sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders' equity 10. Times Interest Earned 11. Asset turnover 12. Return on total assets 13. Return on stockholder's equity 14. Earnings per share on common stock 15. Price-earnings ratio Summary and Conclusion - Based on your analysis and any other information contained in the financial statements, make a conclusion about the financial stability of your company and support a prediction its performance in the future. This section should be brief, no more than half a page. Financial Statement Analysis Project - Example (Pier 1, Inc.) Executive Summary The following report offers a comprehensive analysis of both the financial and overall strength of Pier 1 Imports, Inc. This report includes an examination of the company's strategy, as well as environmental business factors faced by Pier 1 and its competitors. Pier 1 's profitability and risk ratios are examined next, and are compared with the prior year while watching for noteworthy trends. The reader should discover, throughout this report, that Pier 1 is a financially robust company, with low levels of debt, and strong sustainable operating cash flows. It seems poised for continued success. Business/Industry Analysis As a major player in the home furnishings retail business, Pier 1 Imports operates more than one thousand stores, primarily in North America. Pier 1's strategy focuses on product differentiation in an effort to achieve high profit margins. The company targets sophisticated consumers seeking high quality, unique items for their homes. Pier 1's customers are less price-sensitive than competitors' customers because of the way Pier 1 has successfully differentiated both its product line and its brand image. Accounting II - Financial Statement Analysis Project For this project, you will be assigned a public company to analyze. Obtain the 2022 Annual Report for your assigned company. Print a copy of your company's four financial statements. Annual reports and other information about public companies can usually be obtained directly from company websites. Look for something called investors or investor relations and then choose the annual report section (Look for Form 10-K). Each person will be responsible for handing in his/her own report and will be graded individually. Your report should contain information cited from the company report. You should cite these references with parenthetical notations. If your only source is the annual report, you need only cite the page number. For example, if you were stating something found in the Wal-mart Annual Report you would note at the end of the sentence (Wal-mart, p.35). You must have at least three citations in your report. They can be in any section of the report, but will probably be primarily in the analysis section. You may use other sources as well, but are not required to. If you do use other sources, you should format according to MLA guidelines. Your report should contain the following sections. (Please structure your report to this format). Executive Summary - You should begin with a short summary that provides an overview of the contents of the report (one paragraph). Business/Industry Analysis - Briefly explain the business of your company and summarize the industry characteristics. Include what types of financial ratios you might expect from this type of industry. For example, some industries may expect higher turnovers or higher profit margins than other industries. This section should be limited to one to two paragraphs. Financial Ratio Analysis - Compute the financial ratios described below for 2022 and 2021. You must show me all the numbers that you used in your calculation. Not just the end result. You should have 1-2 pages with the actual calculations and then several pages that briefly define each ratio and discuss what each ratio tells you as well as what the change from prior year indicates. This section should be the bulk of your report. 'Calculated based on net income attributable to shareowners of The Coca-Cola Company Refer to Notes to Consolidated Financial Statements 61 THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In millions) THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREOWNERS' EQUTTY (In millions except per share data) Refer to Notes to Consolidated Financial Statements. THE COCA-COLA COMPANY AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS The home furnishings industry can be characterized as having customers that are moderately sensitive to price, an attribute affected by the wide range of prices in this industry (from less than $10 for simple home products to several thousand dollars for high-end furniture). There are many suppliers offering similar products, which is good for retail industry profitability. In addition, the home furnishing industry promotes its products directly to consumers via advertising and coupons. Marketing costs can be quite high in this sector. Einancial Ratio Analysis Working Capital - Pier 1 has a positive working capital which implies it has the ability to meet its currently maturing debts. This working capital increased from $367,369,000 in 2019 to $486,075,000 in 2020 implying its current position is getting stronger. Current Ratio - Pier 1's current ratio increased from 2019 to 2020 implying its ability to meet current obligations is getting stronger. Both years show strong ratios with a ratio of 2.68 in 2020 which means it has enough current assets to meet its current liabilities more than two times. Accounts Receivable Turnover and Days' Sales in Receivables - AR Turnover decreased from 35 to 32 implying Pier 1 is not collecting its receivables as fast in 2020 than in 2019. However this turnover is still strong since Days' Sales in Receivables is only 13 days in 2020. It appears Pier 1 does not have a problem collecting receivables with most receivables collected in less than a month. Ratio of Net Sales to Average Total Assets - Pier 1 has kept this ratio steady only decreasing from 1.7 to 1.6 in 2020 . Pier 1 appears to be effectively using its assets to generate profit. Note: These are not all the ratios that you need to detail. You would include a short description for each ratio and include your calculations on a separate sheet (as instructed). Chapter 14 describes each of these ratios and Exhibit 13 on pages 710711 is a good summary of the calculations for each ratio. Summary and Conclusion Pier 1 is in a strong financial position, quite capable of sustaining and growing current levels of earnings while taking on additional growth in retail space and number of stores with little or no additional long-term debt. A fundamental and differentiating strength of Pier 1 is its ability to successfully manage its cost of sales, the primary component of profit margin, which drives return on assets and return on common shareholder equity. In general and overall, as this analysis shows, Pier 1 is a profitable and low-risk company; a strong retail performer that should continue to succeed well into the future. Financial Ratios: 1. Working capital 2. Current ratio 3. Quick ratio 4. Accounts receivable turnover 5. Number of days' sales in receivables 6. Inventory turnover 7. Number of days' sales in inventory 8. Ratio of fixed assets to long-term liabilities 9. Ratio of liabilities to stockholders' equity 10. Times Interest Earned 11. Asset turnover 12. Return on total assets 13. Return on stockholder's equity 14. Earnings per share on common stock 15. Price-earnings ratio Summary and Conclusion - Based on your analysis and any other information contained in the financial statements, make a conclusion about the financial stability of your company and support a prediction its performance in the future. This section should be brief, no more than half a page. Financial Statement Analysis Project - Example (Pier 1, Inc.) Executive Summary The following report offers a comprehensive analysis of both the financial and overall strength of Pier 1 Imports, Inc. This report includes an examination of the company's strategy, as well as environmental business factors faced by Pier 1 and its competitors. Pier 1 's profitability and risk ratios are examined next, and are compared with the prior year while watching for noteworthy trends. The reader should discover, throughout this report, that Pier 1 is a financially robust company, with low levels of debt, and strong sustainable operating cash flows. It seems poised for continued success. Business/Industry Analysis As a major player in the home furnishings retail business, Pier 1 Imports operates more than one thousand stores, primarily in North America. Pier 1's strategy focuses on product differentiation in an effort to achieve high profit margins. The company targets sophisticated consumers seeking high quality, unique items for their homes. Pier 1's customers are less price-sensitive than competitors' customers because of the way Pier 1 has successfully differentiated both its product line and its brand image. Accounting II - Financial Statement Analysis Project For this project, you will be assigned a public company to analyze. Obtain the 2022 Annual Report for your assigned company. Print a copy of your company's four financial statements. Annual reports and other information about public companies can usually be obtained directly from company websites. Look for something called investors or investor relations and then choose the annual report section (Look for Form 10-K). Each person will be responsible for handing in his/her own report and will be graded individually. Your report should contain information cited from the company report. You should cite these references with parenthetical notations. If your only source is the annual report, you need only cite the page number. For example, if you were stating something found in the Wal-mart Annual Report you would note at the end of the sentence (Wal-mart, p.35). You must have at least three citations in your report. They can be in any section of the report, but will probably be primarily in the analysis section. You may use other sources as well, but are not required to. If you do use other sources, you should format according to MLA guidelines. Your report should contain the following sections. (Please structure your report to this format). Executive Summary - You should begin with a short summary that provides an overview of the contents of the report (one paragraph). Business/Industry Analysis - Briefly explain the business of your company and summarize the industry characteristics. Include what types of financial ratios you might expect from this type of industry. For example, some industries may expect higher turnovers or higher profit margins than other industries. This section should be limited to one to two paragraphs. Financial Ratio Analysis - Compute the financial ratios described below for 2022 and 2021. You must show me all the numbers that you used in your calculation. Not just the end result. You should have 1-2 pages with the actual calculations and then several pages that briefly define each ratio and discuss what each ratio tells you as well as what the change from prior year indicates. This section should be the bulk of your report