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Please help me with part 4,5 and 10. I need it tomorrow by noon-(Answered)

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Please help me with part 4,5 and 10. I need it tomorrow by noon if possible. However if it takes a few more hours that is fine. Feel free to ask any questions.?


ACG2021 Spring 2016

 

Comprehensive Financial Statement Analysis Project

 

Group Members

 

Last Name

 


 

First Name

 

#REF!

 

#REF!

 

#REF!

 

#REF!

 


 

Instructions:

 

You will need the annual report for Kohl's Corporation for fiscal years 2015 and 2014. Also, the annual report for Ross Companies for fiscal year 2015. They will be provided to you in pdf

 

format.

 

Note that the Kohl?s and Ross' fiscal years are referenced one year back, so, for example, the 2015 fiscal year relates to the fiscal year which ended on January 30, 2016 and the 2014

 

fiscal year relates to the year which ended January 31, 2015.

 


 

Requirement 1: Basic Questions

 

Answer the questions for Kohl's fiscal 2015 year in the shaded input box.

 

The location (source) where you can find the answer is provided for you above the shaded input box. Use only that source to answer the question. The Index on the second page of the

 

annual report PDF file gives you a table of contents which allows you to quickly find the sources of the information.

 


 

Requirement 2 - 6: Ratio and Financial Analysis

 

For the Kohl's ratios in requirements 2 and 3, provide the formula of the ratio, the amounts used to calculate the ratio and what the ratio measures. Enter your answers in the shaded

 

input boxes. The first one (a.) was completed as an illustration.

 

The ratio formulas are listed in pages 775 - 777 in chapter 13 of your textbook. I have added the number of the ratio listed in pages 775 - 777 to each ratio so that you know exactly how

 

to calculate them.

 


 

When calculating the ratios, only use the amounts included in the audited financial statements (Item 8. Financial Statements and Supplementary Data); do not just enter those that may

 

be shown in other sections of the annual report. All other sections of the annual report except for the financial statements are not audited and as such the preparer can calculate any

 

other ratios or financial indicators are they wish, not necessarily as the textbook prescribes. If you pick up amounts in other sections you risk getting the question wrong.

 


 

Since the fiscal 2015 financial statements are comparative, they include info for both fiscal years 2015 and 2014. Use those financial statements to answer the questions about 2014 as

 

well.

 

However, some ratios for the 2014 year will require you go to back an additional year because some of the 2014 ratios use averages which are calculated using the 2014 + 2013 balances.

 

For example, the inventory turnover for 2014 uses average inventory calculated by using the 2014 ending inventory balance + the 2014 beginning inventory balance (which is the ending

 

balance in 2013). You need to obtain the fiscal 2013 ending inventory balance included in the 2014 financial statements which have been provided to you.

 


 

For ratios that include averages, use a simple average calculation (beginning + ending balance / 2).

 


 

Requirement 7 - 11: Ratio and Financial Analysis (Kohl's versus competitor Ross Companies)

 

Copy the ratio formula from the "Requirement 2 - 6" sheet to column A on the left-hand side of the spreadsheet.

 

In this sheet, you only need to calculate the 2015 ratio for the Ross Companies on column H on the right-hand side of the spreadsheet (the actual ratio answer for Kohl's 2015 fiscal year

 

will be populated in column D automatically).

 

Other:

 

Several questions have multiple parts. Make sure you answer every part in order to receive full credit.

 

Please do not add columns or rows to this file. I will be using this file to grade and my grading template is in this same format.

 

The points assigned to each question are included in the boxes highlighted in pink on the right-hand side of the question. There are 207 points which is equivalent to 100%.

 


 

Requirement 1

 

Answer BASIC INFORMATION about company operations and financial results for the Kohl's Corp 2015 fiscal year.

 

NOTE: Use amounts found in the "Source" only to answer these questions.

 


 

Points

 


 

a. As of January 30, 2016, how many stores did Kohl?s operate and in how many states?

 

Source:

 


 

Item 8. Notes to Consolidated Financial Statements: Note #1

 


 

1

 


 

b. When does the fiscal year end each year? How many weeks did fiscal year 2015 have? How about 2014?

 

Source:

 


 

Item 8. Notes to Consolidated Financial Statements: Note #1

 


 

1

 


 

c. Does Kohl's report a multi-step or single-step income statement? How do you know?

 

Source:

 


 

Item 8. Consolidated Statements of Income

 


 

3

 


 

d. What is Kohl's largest asset? Largest liability? What is the amount of each?

 

Source:

 


 

Item 8. Consolidated Balance Sheets

 


 

2

 


 

e. How many shares of common stock are Issued? Outstanding?

 

Source:

 


 

Item 8. Consolidated Balance Sheets

 


 

2

 


 

Hint: Outstanding stock not explicitly disclosed, you need to calculate it with the information given.

 


 

f. How many shares of treasury stock did Kohl's purchase during the year?

 

Source:

 


 

Item 8. Consolidated Statements of Changes in Shareholders' Equity

 


 

2

 


 

g. How much was dividends declared and paid per share?

 

Source:

 


 

Item 8. Consolidated Statements of Income

 


 

h. When does Kohl's record revenue sold at the stores? What about online sales shipped to customers?

 


 

2

 


 

Source:

 


 

Item 8. Notes to Consolidated Financial Statements: Note #1

 


 

1

 


 

i. What method does Kohl's use to value its inventory?

 

Source:

 


 

Item 8. Notes to Consolidated Financial Statements: Note #1

 


 

1

 


 

j. What method does Kohl's use to depreciate its property and equipment?

 

Source:

 


 

Item 8. Notes to Consolidated Financial Statements: Note #1

 


 

1

 


 

k. What percentage of Kohl?s total property and equipment are depreciated at year-end?

 

Source:

 


 

Item 8. Notes to Consolidated Financial Statements: Note #1

 


 

2

 


 

l. What items are recorded as cash equivalents?

 

Source:

 


 

Item 8. Notes to Consolidated Financial Statements: Note #1

 


 

1

 


 

m. Kohl's has receivables from credit card transactions at fiscal year-end and yet there is no Accounts Receivable classification on the

 

balance sheet. In what balance sheet line are those receivables included and under what conditions?

 

Source:

 


 

Item 8. Notes to Consolidated Financial Statements: Note #1

 


 

2

 


 

n. What types of Other Comprehensive Income items does Kohl's have?

 

Source:

 


 

Item 8. Consolidated Statements of Comprehensive Income

 


 

2

 


 

o. Was Kohl?s debt issued at a discount or premium in the aggregate? How do you know?

 

Source:

 


 

Item 8. Notes to Consolidated Financial Statements: Note #2

 


 

2

 


 

p. What type of items are included in the Various Liabilities to Customers? Why are they classified as liabilities?

 

Source:

 


 

Notes to Consolidated Financial Statements: Note #1

 


 

2

 


 

q. Using a site such as www.hoovers.com or www.finance.yahoo.com, research the discount variety store industry. List three

 

competitors of Kohl's Corporation.

 

Source:

 


 

Type source here

 


 

2

 


 

r. List three Kohl's brands.

 

Source:

 


 

Item1. Business

 


 

1

 


 

s. Does Kohl's have any business relations with foreign entities such as suppliers or customers?

 

Source:

 


 

Item1. Business

 


 

2

 


 

t. Describe three risk factors that Kohl's faces.

 

Source:

 


 

Item 1A. Risk Factors.

 


 

1

 


 

u. What was the cause of the increase in average selling price per unit? What was the effect of higher selling prices on the number of

 

units sold?

 

Source:

 


 

Item 7. Management's Discussion and Analysis: Results of Operations.

 


 

3

 


 

v. Did capital expenditures increase or decrease from prior year? What is the explanation for the change?

 

Source:

 


 

Item 7. Management's Discussion and Analysis: Liquidity and Capital Resources

 


 

3

 


 

39

 


 

KOHL'S 2015 Fiscal Year as of January 30, 2016

 

Ratio

 

(Refer to pgs 775 - 777 for ratio formula)

 


 

Calculation of Ratio

 


 

Show work

 


 

KOHL'S 2014 Fiscal Year as of January 31,

 

Calculation of Ratio

 


 

Ratio

 


 

Show work

 


 

Requirement 2

 


 

Evaluate PROFITABILITY. Using information you have learned in the text and elsewhere, evaluate Kohl's profitability for 2015 compared with 2014. In your ana

 

should compute the following ratios and then comment on what those ratios indicate.

 

NOTE: Use amounts in the audited financial statements only to calculate these ratios (Item 8. of annual report).

 


 

a. Rate of return on sales #13

 


 

3.5%

 


 

Ratio:

 

Net income / Net sales

 


 

$

 

$

 


 

673

 

19,204

 


 

$

 

$

 


 

867

 

19,023

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

The ratio decreased. This is negative because each dollar of sales produced less income.

 


 

b. Asset turnover #14

 


 

-

 


 

Ratio:

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

c. Return of return on assets (#15 non-DuPont model)

 

Ratio:

 


 

0.0%

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

d. Return of return on equity (#17 non-DuPont model)

 


 

0.0%

 


 

Ratio:

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

e. Gross margin percentage #10

 


 

0.0%

 


 

Ratio:

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

f. Earnings per share #18 (do NOT use one shown on the income statement,

 

calculate yourself using simple average of outstanding shares)

 


 

$

 


 

-

 


 

Ratio:

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

g. Generally, are these indicators positive or negative? What trend(s) do you deduce from this analysis?

 


 

Requirement 3

 


 

Evaluate the company's ABILITY TO SELL INVENTORY AND PAY DEBTS during 2015 and 2014. In your analysis, you should compute the following ratios, and t

 

comment on what those ratios indicate.

 

NOTE: Use amounts in the audited financial statements only to calculate these ratios (Item 8. of annual report).

 


 

a. Inventory turnover & days' inventory outstanding #3

 


 

Turnover

 


 

-

 


 

Days

 


 

-

 


 

Ratio:

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

b. Accounts payable turnover & days' payable outstanding #6

 


 

Turnover

 

Days

 


 

-

 


 

Ratio:

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

c. Current ratio #1

 

Ratio:

 


 

-

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

d. Quick (acid-test) ratio #2

 


 

-

 


 

Ratio:

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

e. Debt ratio #8

 


 

-

 


 

Ratio:

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

f. Times interest earned #9

 


 

-

 


 

Ratio:

 


 

Did the ratio increase or decrease? Is that positive or negative? Why?

 


 

g. Generally, are these indicators positive or negative? What trend(s) do you deduce from this analysis?

 


 

Requirement 4

 

Evaluate CASH FLOW

 


 

a. For 2015, was cash provided by, or used in, Operations?

 

b. For 2015, is Kohl's net Cash Flow from Operations greater than or less than Income from Operations? What is the primary cause of the difference?

 


 

c. For 2015, what is the primary source of cash from Investing Activities? Is this the same as in 2014 and 2013? If not, state the primary source(s) of cash from investing

 

2014 and 2013.

 


 

d. For 2015, what is the primary source of cash from Financing Activities? Is this the same as in 2014 and 2013? If not, state the primary source(s) of cash from financing

 

in 2014 and 2013.

 


 

e. During 2015, how much Income Taxes were actually paid? Was this higher or lower than the previous year's (2014) Income Tax Expense (called "Provision for Income

 

the income statement).

 


 

f. Where there any significant non-cash investing or financing activities during the year? If so, explain.

 


 

Requirement 5

 


 

OTHER FINANCIAL ANALYSIS.

 


 

a. Has Kohl's been able to generate increased revenues from 2014 to 2015 to outpace inflation? Provide explanation. Reference the source of your inflation data.

 


 

Hint: Figure out percentage increase in revenue from 2014 to 2015. Compare that to the rate of inflation (research this in internet). Then discuss if the increase in revenue w

 

related to better operations or was it mostly just inflationary effect.

 


 

b (1). What was the closing market price of Kohl's Corporation stock on February 1, 2016, the next

 

trading day after the balance sheet date of January 30, 2016?

 


 

$

 


 

-

 


 

b (2). What is the book value per share on January 30, 2016? (ratio #21)

 


 

$

 


 

-

 


 

Ratio:

 


 

b (3). What is the difference between the Kohl?s market price from b(1). above and the book value from b(2). above? What factors could be explain this difference?

 


 

c (1). How much was the dividend declared per share (from Requirement 1, g. )

 


 

$

 


 

-

 


 

c (2). How much as the earnings per share (calculated above in Requirement 2, f. )

 


 

$

 


 

-

 


 

c (3). What percent of the earnings per share was distributed as a dividend ? Is Kohl's distributing significant earnings to their shareholders?

 


 

d. Prepare vertical analysis for Kohl's Companies

 


 

Refer to separate sheet

 


 

e. Prepare horizontal analysis for Kohl's Companies

 


 

Refer to separate sheet

 


 

Requirement 6

 

Overall, determine the financial health of Kohl?s based on the information gathered from requirements 2 ? 5 above.

 

Provide specific reasons as to why.

 


 

iscal Year as of January 31, 2015

 


 

ation of Ratio

 


 

how work

 


 

Points

 


 

Ratio

 


 

pared with 2014. In your analysis, you

 


 

4.6%

 


 

<--- This item was completed

 

for you as an example

 


 

me.

 


 

###

 


 

4

 


 

0.0%

 


 

4

 


 

0.0%

 


 

4

 


 

0.0%

 


 

4

 


 

###

 


 

4

 


 

4

 


 

e the following ratios, and then

 


 

Turnover

 


 

-

 


 

6

 


 

Days

 


 

-

 


 

Turnover

 

Days

 


 

-

 


 

6

 


 

###

 


 

4

 


 

###

 


 

4

 


 

###

 


 

4

 


 

###

 


 

4

 


 

4

 


 

ifference?

 


 

1

 

2

 


 

urce(s) of cash from investing activities in

 

2

 


 

urce(s) of cash from financing activities

 

2

 


 

(called "Provision for Income Taxes" on

 

2

 


 

2

 


 

of your inflation data.

 


 

uss if the increase in revenue was really

 


 

e explain this difference?

 


 

s?

 


 

4

 


 

2

 

2

 


 

2

 


 

1

 

1

 

2

 


 

6

 


 

87

 


 

KOHL'S 2015 Fiscal Year as of January 30, 2016

 

Ratio

 

(Refer to pgs 775 - 777 for ratio formula)

 


 

ROSS 2015 Fiscal Year as of January

 

Calculation of Ratio

 


 

Ratio

 


 

Show work

 


 

Requirement 7

 


 

Evaluate PROFITABILITY. Using information you have learned in the text and elsewhere, compare Kohl's 2015 profitability with Ross. In your analysis, you shou

 

the following ratios and then comment on what those ratios indicate.

 

NOTE: Use amounts in the audited financial statements only to calculate these ratios (Item 8. of annual report).

 


 

a. Rate of return on sales #13

 

Ratio:

 

Net income / Net sales

 


 

b. Asset turnover #14

 


 

3.5%

 

$

 

$

 


 

<---- For the Kohl's' 2015 year,

 

copy the ratio formula from

 

"Requirement 2 - 6" Sheet

 


 

0.0%

 


 

Ratio:

 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

c. Return of return on assets (#15 non-DuPont model)

 


 

0.0%

 


 

Ratio:

 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

d. Return of return on equity (#17 non-DuPont model)

 

Ratio:

 


 

0.0%

 


 

1,020,661

 

11,939,999

 


 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

e. Gross margin percentage #10

 


 

0.0%

 


 

Ratio:

 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

f. Earnings per share #18 (do NOT use one shown on the income statement,

 

calculate yourself using simple average of outstanding shares)

 


 

$

 


 

-

 


 

Ratio:

 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

g. Generally, who is more profitable? Kohl's or Ross Companies? Explain your answer.

 


 

Requirement 8

 


 

Compare Kohl's and Ross' ABILITY TO SELL INVENTORY AND PAY DEBTS during 2015. In your analysis, you should compute the following ratios, and then com

 

those ratios indicate.

 

NOTE: Use amounts in the audited financial statements only to calculate these ratios (Item 8. of annual report).

 


 

a. Inventory turnover & days' inventory outstanding #3

 

Ratio:

 


 

Turnover

 


 

-

 


 

Days

 


 

-

 


 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

b. Accounts payable turnover & days' payable outstanding #6

 


 

Turnover

 


 

-

 


 

Days

 


 

-

 


 

Ratio:

 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

c. Current ratio #1

 


 

0.0%

 


 

Ratio:

 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

d. Quick (acid-test) ratio #2

 


 

0.0%

 


 

Ratio:

 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

e. Debt ratio #8

 

Ratio:

 


 

0.0%

 


 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

f. Times interest earned #9

 


 

0.0%

 


 

Ratio:

 

Copy ratio formula from "Requirement 2 - 6" Sheet

 


 

g. Generally, who has a stronger financial position? Kohl's or ROSS Companies? Explain your answer.

 


 

Requirement 9

 

Evaluate ROSS Companies' CASH FLOW.

 


 

a. For 2015, was cash provided by, or used in, ROSS Companies' operations?

 

b. For 2015, is ROSS Companies' net Cash Flow from Operations greater than or less than Income from Operations? What is the primary cause of the difference?

 


 

c. For 2015, what is the primary sources and uses of cash from Investing activities?

 


 

d. For 2015, what is the primary sources and uses of cash from Financing activities?

 


 

Requirement 10

 

OTHER FINANCIAL ANALYSIS.

 


 

a. Has ROSS Comapnies been able to generate increased revenues from 2014 to 2015 to outpace inflation? Provide explanation. Reference the source of your inflation d

 


 

Hint: Figure out percentage increase in revenue from 2014 to 2015. Compare that to the rate of inflation (research this in internet). Then discuss if the increase in revenue w

 

to better operations or was it mostly just inflationary effect.

 


 

b (1). What was the closing market price of ROSS Companies stock on February 1, 2016, the next trading

 

day after the balance-sheet date of January 30, 2016?

 

b (2). What is the book value per share of ROSS Companies on January 20, 2016? (ratio #21)

 

Ratio:

 


 

c (1). How much was ROSS' dividend declared per share (found in Consolidated Statements of Income)

 


 

c (2). How much was ROSS' earnings per share (calculated above in Requirement 7 f. )

 

c (3). What percent of the earnings per share was distributed as a dividend ? Is ROSS Companies distributing significant earnings to their shareholders?

 


 

d. Prepare vertical analysis for ROSS Companies

 


 

Refer to separate sheet

 


 

e. Prepare horizontal analysis for ROSS Companies

 


 

Refer to separate sheet

 


 

Requirement 11

 


 

Overall, based on the results of this analysis, assuming hypothetically that the stock price was the same for both companies, which company?s stock would you purchase

 

specific reasons as to why.

 


 

scal Year as of January 30, 2016

 


 

ation of Ratio

 


 

how work

 


 

Ratio

 


 

Points

 


 

your analysis, you should compute

 


 

8.5%

 

<--- This item was completed

 

for you as an example

 


 

0.0%

 


 

2

 


 

0.0%

 


 

2

 


 

0.0%

 


 

2

 


 

$

 


 

0.0%

 


 

2

 


 

-

 


 

2

 


 

4

 


 

ng ratios, and then comment on what

 


 

Turnover

 


 

-

 


 

Days

 


 

-

 


 

3

 


 

Turnover

 


 

-

 


 

Days

 


 

-

 


 

3

 


 

0.0%

 


 

2

 


 

0.0%

 


 

2

 


 

0.0%

 


 

2

 


 

the difference?

 


 

0.0%

 


 

2

 


 

4

 


 

1

 

2

 


 

2

 


 

2

 


 

ource of your inflation data.

 


 

he increase in revenue was really related

 


 

4

 


 

$

 


 

-

 


 

2

 


 

$

 


 

-

 


 

2

 


 

$

 


 

-

 


 

1

 


 

$

 


 

olders?

 


 

-

 


 

1

 

2

 


 

ock would you purchase? Provide

 

6

 


 

57

 


 

Requirement 5d / 10d

 

Other financial analysis. Refer to pgs 749 - 752 in chapter 13 for explanation.

 

d. Perform Vertical Analysis for sales, gross profit, operating income, and net income for 2014 ? 2015.

 

KOHLS

 


 

2015

 

$$

 


 

Sales

 

Gross Profit

 

Operating Income

 

Net Income

 


 

ROSS COMPANIES

 


 

$$

 


 

%

 

100%

 


 

$$

 


 

2015

 

$$

 


 

Sales

 

Gross Profit

 

Operating Income

 

Net Income

 


 

2014

 

%

 

100%

 


 

4

 

%

 

100%

 


 

2014

 


 

Which company has the strongest profitability indicators based on this analysis?

 


 

4

 

%

 

100%

 


 

4

 


 

Requirement 5e / 10e

 

Other financial analysis. Refer to pgs 743 - 747 in chapter 13 for explanation.

 

e. Perform Horizontal Analysis for sales, gross profit, operating income, and net income for 2014 ? 2015.

 

KOHLS

 


 

2015

 


 

2014

 


 

$$

 

Sales

 

Gross Profit

 

Operating Income

 

Net Income

 


 

$

 

$

 

$

 

$

 


 

$$

 

-

 


 

ROSS COMPANIES

 


 

$

 

$

 

$

 

$

 


 

Sales

 

Gross Profit

 

Operating Income

 

Net Income

 


 

$

 

$

 

$

 

$

 


 

$$

 


 

2014

 

$$

 


 

-

 


 

$

 

$

 

$

 

$

 


 

4

 

%

 


 

-

 


 

2015

 

$$

 


 

Increase (decrease)

 


 

Increase (decrease)

 

$$

 


 

4

 

%

 


 

-

 


 

For each company, which was the item with the greatest percentage increase year over year?

 


 

4

 


 

24

 


 

 

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