PART 2
Chapter-1
1 For the most recent year, list the accounts and carrying amounts of the company's property, plant and equipment, and intangible assets. What is the percentage of each to total assets?
2 What cost allocation (depreciation/amortization) method(s) and estimates (useful lives or depreciation/amortization rates) does the company use for each type of long-lived asset?
3 Ratio analysis: a. Whatdoesthefixedassetturnoverratiomeasureingeneral? b. Compute the ratio for each of the last three years. c. Whatdoyourresultssuggestaboutthecompany?
4 Compute the approximate remaining useful life of the largest component of property, plant and equipment. If you are unable to compute this number, identify the missing information.
5 Did the company disclose any information about asset impairment? If so, what was the impairment loss for the current year, and does that number mean?
6 Did the company acquire any businesses during the current year or the previous year? If so, what was the total cost of acquisition and what percentage of that cost was attributed to goodwill?
7 Refer to the company's statement of cash flows
What was the effect of depreciation/amortization expense on cash flows from operating activities? Compute the percentage of depreciation/amortization expense to cash flows from operating activities for each of the last three years and comment on the results.
Did the company sell any long-lived assets? If so, how much cash did the company receive for selling these assets in each of the last three years?
Chapter-2
1 List the accounts and amounts of the company's current liabilities for each of the last two years.
What is the percentage of each to the respective year's total liabilities?
What do the results of your analysis suggest about the strategy your company has followed with respect to borrowed funds for the past two years?
2 Does the company disclose any information on contingent liabilities (i.e., contingencies) in the notes to its financial statements? If so, briefly describe these contingencies.
3 Ratio analysis:
What does the quick ratio measure in general?
Compute the ratio for each of the last three years.
What do your results suggest about the company?
4. Ratioanalysis:
What do the trade payables turnover ratio and the average age of payables measure in general?
Compute these ratios for each of the last three years.
What do your results suggest about the company?
5. What is the effect of the change in trade payables on cash flows from operating activities for the most recent year (that is, did the change increase or decrease operating cash flows and by how much)? Explain your answer and identify the direction and amount of the change.
Chapter-3
1 Has your company issued any long-term bonds or notes in the most recent year? If so, read the note related to long-term debt, identify one of the bonds or notes and list any special features related to that debt issue (e.g., callable, convertible, secured by specific collateral).
2 Ratio analysis:
What does the times interest earned ratio measure in general?
Compute the ratio for each of the last three years.
What do your results suggest about the company?
3 Ratio analysis:
What does the debt-to-equity ratio measure in general?
Compute the ratio for each of the last three years.
What do your results suggest about the company?
4 During the most recent year, how much cash did the company receive on issuing debt? How much did it pay on debt principal? What does management suggest were the reasons for issuing and/or repaying debt during this year?
Chapter-
1 Which of the two basic reporting approaches for cash flows from operating activities did the company adopt?
2 What is the quality of earnings ratio for the most recent year? What are the major causes of differences between net earnings and cash flow from operations?
3 What is the capital expenditure ratio for the past two years? How is the company financing its capital expenditures?
4 In the most recent year, what portion of the cash flow from operations was paid to shareholders in the form of dividends?
5 How much cash did the company pay for interest during the most recent year? How much cash did it pay for income taxes? Where did you find these amounts? (Hint: recall that interest expense and income tax expense are not necessarily equal to the cash payments for interest and taxes, respectively).
6 What is the effect of the change in trade receivables on cash flows from operations for the most recent year (that is, did the change increase or decrease operating cash flows, and by how much)? Explain you answer and identify the direction and amount of the change.
7 What is the effect of the change in inventories on cash flows from operations for the most recent year (that is, did the change increase or decrease operating cash flows, and by how much)? Explain your answer and identify the direction and amount of the change.