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Individual Learning Project Questions

Name: Erica Sosa

Individual Learning Project Instructions

This project will allow you the opportunity to explore a company's annual report and become familiar with the items it contains. Choose a company from the list below for the subterm in which you are enrolled. Locate the most recent annual report, either from the Liberty University library's access to Capital IQ NetAdvantage (S&P) database, the EDGAR database (http://www.sec.gov/), or the company's website. Once located, open Individual Learning Project Questions document and add your answers underneath each question. Do not delete the questions. Questions 1-49 must be answered with Microsoft Word. Your answers for these do not need to be in complete sentences. Questions 50-52 must be answered in Microsoft Excel and your answers must include formulas. Questions 53-55 must be answered with complete sentences and justification within the Word document. Both documents (Word and Excel) must be uploaded into the Assignment link.

Company Selections by Subterm:

Summer D

Bed Bath & Beyond Inc (BBBY)

Chipotle Mexican Grill Inc (CMG)

Ford Motor Company (F)

Gap Inc (GPS)

General Information:

1.What is the name of your corporation?

Bed Bath & Beyond Inc

2.Where are the corporate headquarters?

650 Liberty Ave., Union, New jersey 07083

3.What is the corporation's fiscal year end?

February 27, 2021

4.What are the primary products or services of the corporation?

Domestics merchandise including bed linens and related items, bath items, and kitchen textiles; and home furnishings, such as kitchen and tabletop items, fine tabletop, basic housewares, general home furnishings, consumables, and various juvenile products.

5.Graph the high and low price of the company's stock for each quarter of the last two years. What was the high and what was the low?

Q1 - 06/30/2021 H (30.12) L (26.59)Q1 H (15.38) L (7.19)

Q2 - 04/14/2021 H (44.51) L (22.85)Q2

Q3 - 01/02/2021 H (34.68) L (17.70)Q3

Q4 - 10/01/2021 H (53.90) L (17.61)Q4

6.Who is the company's transfer agent and where are they located?

American Stock Transfer & Trust Company 6201 15th Ave., Brooklyn, NY 11219

7.Who are your company's competitors?

Ikea, Walmart, Target, Amazon, Khols, Home Depot, Lowes, Crate & Barrel

Market Information:

8.On which stock exchange is your corporation's stock traded?

NASDAQ

9.What is the current market price of their stock?

$27.85

10.What is the ticker symbol used to identify your corporation on the stock exchange?

BBBY

Internet Information:

11.What is the Internet address of your corporation? Be sure it appears as a hyperlink.

https://www.bedbathandbeyond.com/

12.Is the corporation's Annual Report online?

Yes: https://bedbathandbeyond.gcs-web.com/

13.Are its financial statements on-line?

Yes: https://bedbathandbeyond.gcs-web.com/

14.Is your company listed on Annualreports.com?

Yes: https://www.annualreports.com/Company/bed-bath-beyond-inc

15.How long is your company's 10-K report at the Securities and Exchange Commission website (Edgar Database)?

1996

Cash Flow and Retained Earnings:

16.List the amount of cash flows from each of the 3 activities: Operating, Investing, and Financing for the 2 most recent years. What was the increase or decrease in cash for each of these years?

($ In millions)

2020

2021

Difference

Operating

590.9

268.1

322.8

Investing

91.4

737.9

646.5

Financing

182.8

632.3

449.5

17.Were there any Non-Cash Investing/Financing Transactions? Describe the type and amount.

Yes: Issuance of Common stock to reduce Long Term Debt $4.22 Million

18.What is the dollar difference between accrual net income and Cash provided by Operations?

Accrual Net Income (in millions)

Cash Provided by Operations (in millions)

Difference

(in millions)

(4141.5)

$268.1

$409.6

19.What investing activity provided the largest inflow of cash in the current year?

Divestitures ($534.5 million)

20.What investing activity used the largest amount of cash in the current year?

Financing ($632.3 million)

21.What financing activity provided the largest inflow of cash in the current year?

Repurchase of Common Stock ($380.1 million)

22.What financing activity used the largest amount of cash in the current year?

Repayment of long term debt ($457.8 million)

23.Does the company have sufficient cash inflows from the appropriate category? Describe any problems the company many experience with cash flow from your analysis of the cash flow statement.

The company has sufficient cash flow which has a posite net change of $383.6 million, however, it appears the company may in a negative condition as it appears a significant portion of the income came from divestitures which means they sold off some of their assets and property which was used to pay off long term debts as opposed to paying it with income generated from sales.

24.Show the change in Retained Earnings for the 2 most recent years. What was net income for each year? How much was paid out in dividends each year?

2020 (in millions)

2021 (in millions)

Retained Earnings

$10.374.8

$10,225.3

Net Income (Loss)

($613.8)

($150.8)

Dividends

$85.5

$23.1

25.Were the dividends on common stock and/or preferred stock? What was the amount of each?

Repurchase of common stock 2020 $99.7 million and in 2021 $380.1 million

26.Did Retained Earnings change for any reasons other than net income or dividends? Explain.

Retained earnings declined from $10.374.8 in 2020 to $10,225.3 in 2021. There was no other noticibe reason other than the net income.

27.What classes of stock does your company have?

A-Class (common and preferred)

28.How many shares of each class of stock are authorized, how many are issued, and how many are outstanding?

Stock Authorized: 900 million authorized

Stock Issued 343.24 million

Stock Outstanding 109.62 million

29.Does your company have any treasury stock? How many shares and what dollar amount?

Yes -$11,253 million

30.What is the par or stated value of each of your company's stocks?

$0.01

Footnote Disclosures:

31.How many footnote disclosures does your company have?

15 footnotes

32.How many significant accounting policies are listed under its Summary of Significant Accounting Policies?

25

33.What does it include as Cash and Cash Equivalents?

According to the 10-Q filed this past May the 29, "The Company considers all highly liquid instruments purchased with original maturities of three months or less to be cash equivalents. Included in cash and cash equivalents are credit and debit card receivables from banks, which typically settle within five business days, of $64.9 million and $64.0 million as of May 29, 2021 and February 27, 2021, respectively" (Pg. 10)

34.What method does it use to value Inventory?

The retail inventory method

35.What method(s) does it use to depreciate its assets?

The straight line method

36.Does it have any leased assets? If yes, describe them.

Leasehold improvements are amortized using the straight-line method over the lesser of their estimated useful life or the life of the lease. Depreciation expense is primarily included within selling, general and administrative expenses.

https://www.sec.gov/Archives/edgar/data/886158/000088615821000015/R8.htm

The company will rent out their building property which have leases currently up to the year 2041 with varied terms.

37.What policies does it have in regard to Foreign Currency Translations?

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, (the "Tax Act").

The Tax Act included a mandatory one-time tax on accumulated earnings of foreign subsidiaries, and as a result, all previously unremitted earnings for

which no U.S. deferred tax liability had been previously accrued has now been subject to U.S. tax. Notwithstanding the U.S. taxation of these amounts, the

Company intends to continue to reinvest the unremitted earnings of its Canadian subsidiary. Accordingly, no additional provision has been made for U.S. or

additional non-U.S. taxes with respect to these earnings, except for the transition tax resulting from the Tax Act.

https://bedbathandbeyond.gcs-web.com/static-files/6009d3aa-14bf-4508-acd2-84de6a440bf6

38.Describe any pending lawsuits in which it is involved.

Yes. At this time the pending lawsuit is Donald Hess and Elizabeth Padilla Vs. Bed Bath & Beyond, Case No:21-cv-409. Hess and Padilla claim Bed Bath and Beyond violated Law "NYLL 191(1)(a)" which states that manual labor workers are to be paid weekly and that they performed at least 80% of their work hours doing manual labor yet they were only paid biweekly.

See https://codes.findlaw.com/ny/labor-law/lab-sect-191.html

39.Provide its Earnings per Share for the 2 most recent years?

For the years 2020 and 2021, 4.94 and 1.24 respectivley, in millions.

Report of the Independent Auditor(s):

40.Who is/are your company's auditor(s)?

KPMG

41.Where are they located?

345 Park Ave, New York, NY 10154

42.Does the auditor(s) give a qualified opinion, an unqualified opinion, a disclaimer of opinion, or an adverse opinion? What does that opinion mean? Is it good?

The auditor gives a qualified opinion. This company is one of the big four and conducts their observations within accordance of manditpry practice guidelines required by the U.S.

43.What is the auditor's responsibility in regard to the financial statements?

According to the 10-K, the auditors responsibility is to provide their professional opinion on the financial schedule based on their audit observations.

44.What is management's responsibility in regard to the financial statements?

The management's responsibility is to provide the financial statement schedule.

45.What financial statements were included in the auditor's opinion?

Statement of earnings, shareholders' equity and cash flows

46.Did the auditor believe that the statements were presented fairly?

Yes

Management's Report:

47.Who bears the responsibility for the integrity and the objectivity of the financial statements?

48.What does management say they are doing to assure the public that the financial information is reliable?

49.What is the responsibility of the Audit Committee of the Board of Directors?

Analysis: (use Excel to complete this section)

50.Provide common-size analysis of your company's income statement and balance sheet for the 2 most recent years (must be done using Excel with formulas).

51.Provide horizontal analysis of your company's income statement and balance sheet, showing the dollar amount and percent of change using the 2 most recent years (you must use an Excel spreadsheet with formulas).

52.Perform ratio analysis on your company using the ratios listed in Exhibit 13.16 on page 505 of your text (these must be in an Excel spreadsheet, using formulas to calculate the ratios). You should present them in a similar format as the text: group by category, list name of ratio, formula in words, and the ratio calculation. Give a short explanation of your conclusions about your company after each category of ratios (i.e. How liquid is your company? How efficiently is it using its assets? etc.).

Conclusions:

53.Are you optimistic or pessimistic regarding the future of your chosen corporation? Explain.

54.Would you invest in the stock of the company? Explain.

55.Would you invest in the bonds of the company? Explain.