Directions: * Use the instructions from FRP #1. * Refer to the 2021 and 2020 annual reports for these two companies to complete the questions. * You will use the 2020 annual report for 2019 values only. Sometimes prior year numbers are corrected in current-year reports, so use the most current reports. * Note: some answers have been provided to help you figure out the others. * Show the numerator and denominator of your calculations and carry your answer out to 1/10 of a \%, or 3 decimal points (i.e. 2300/3400=0.676 or 67.6% ). * Use formulas where you can! * Ratio help can be found in Module 4 Horizontal analysis: * A technique for evaluating a series of financial statement data over a period of time. The purpose of a horizontal analysis is to express the changes in an item in percentages, based on a specific past year chosen as the base year ( 2020 in this case). * Formula: BaseYearCurrentYear-BaseYear100 9. Estimates. What does the company say about estimates? Name at least one account that the company has that would use estimates. Macy's: Answer found on page: Begin answer here: List account(s) here: GAP: Answer found on page: Begin answer here: List account(s) here: 10. Cost of goods sold. What items are included in costs for the company? Macy's: Answer found on page: List items here: GAP: Answer found on page: List items here: 11. What is the advertising/marketing expense for the company? What type of advertising does the company do? Macy's: Answer found on page: 2020 advertising/marketing expense = Type of advertising: 11. What is the advertising/marketing expense for the company? What type of advertising does the company do? Macy's: Answer found on page: 2020 advertising/marketing expense = Type of advertising: GAP: Answer found on page: 2020 advertising/marketing expense = Type of advertising: 12. What method(s) of depreciation does the company use for financial statements? Macy's: Answer found on page: Method(s): GAP: Answer found on page: Method(s): 13. Inventory. What method does the company use to account for inventory costs? (Note: retail is a form of LIFO.) Macy's: Answer found on page: Method: GAP: Answer found on page: Method: 4. Using the cash flow statements, how much did each company invest in Property, Plant, and Equipment (PP\&E) in 2021? Note: PP\&E is sometimes referred to as "Capital Expenditures." Remember, the numbers in these reports are truncated, so provide the actual amount. Do not include equipment leased to others. 15. Locate the footnote disclosure for commitments/contingencies/leases/rent. Briefly explain what a contingency is (asset or liability?) and summarize the footnote. Macy's: Answer found on page: What a contingency is: Summary: GAP: Answer found on page: What a contingency is: Summary: Directions: * Use the instructions from FRP #1. * Refer to the 2021 and 2020 annual reports for these two companies to complete the questions. * You will use the 2020 annual report for 2019 values only. Sometimes prior year numbers are corrected in current-year reports, so use the most current reports. * Note: some answers have been provided to help you figure out the others. * Show the numerator and denominator of your calculations and carry your answer out to 1/10 of a \%, or 3 decimal points (i.e. 2300/3400=0.676 or 67.6% ). * Use formulas where you can! * Ratio help can be found in Module 4 Horizontal analysis: * A technique for evaluating a series of financial statement data over a period of time. The purpose of a horizontal analysis is to express the changes in an item in percentages, based on a specific past year chosen as the base year ( 2020 in this case). * Formula: BaseYearCurrentYear-BaseYear100 9. Estimates. What does the company say about estimates? Name at least one account that the company has that would use estimates. Macy's: Answer found on page: Begin answer here: List account(s) here: GAP: Answer found on page: Begin answer here: List account(s) here: 10. Cost of goods sold. What items are included in costs for the company? Macy's: Answer found on page: List items here: GAP: Answer found on page: List items here: 11. What is the advertising/marketing expense for the company? What type of advertising does the company do? Macy's: Answer found on page: 2020 advertising/marketing expense = Type of advertising: 11. What is the advertising/marketing expense for the company? What type of advertising does the company do? Macy's: Answer found on page: 2020 advertising/marketing expense = Type of advertising: GAP: Answer found on page: 2020 advertising/marketing expense = Type of advertising: 12. What method(s) of depreciation does the company use for financial statements? Macy's: Answer found on page: Method(s): GAP: Answer found on page: Method(s): 13. Inventory. What method does the company use to account for inventory costs? (Note: retail is a form of LIFO.) Macy's: Answer found on page: Method: GAP: Answer found on page: Method: 4. Using the cash flow statements, how much did each company invest in Property, Plant, and Equipment (PP\&E) in 2021? Note: PP\&E is sometimes referred to as "Capital Expenditures." Remember, the numbers in these reports are truncated, so provide the actual amount. Do not include equipment leased to others. 15. Locate the footnote disclosure for commitments/contingencies/leases/rent. Briefly explain what a contingency is (asset or liability?) and summarize the footnote. Macy's: Answer found on page: What a contingency is: Summary: GAP: Answer found on page: What a contingency is: Summary
