Prepare a Financial Statement Audit
Two corporations: Normal Motors and FORD
2. These publicly traded corporations needs to be in the identical business (Instance – Manufacturing, Financial, Utilities and many others.).
three. On the SEC web site college students will search for the next fillings:
a. Annual Report (10-Ok Report)
b. Proxy Statements (DEF filings). These proxy statements are filed usually inside 2 or three months after Annual Report.
four. From the Annual (10-Ok) report college students will present the next data:
a. Firm profile and historical past.
b. Financial data – Internet Earnings, Whole Belongings and different monetary data for calculating varied monetary ratios. College students have a selection in choosing these ratios (use any 5 monetary ratios). College students are required to make use of the identical ratios for each the businesses.
A. Profitability Ratios:
1. Return on Fairness (internet earnings/stockholder’s fairness)
B. Effectivity Ratios:
2. A/R Turnover Fee (gross sales/accounts receivable)
three. Stock Turnover Fee (COGS/common stock)
C. Leverage Ratios:
four. Debt Ratio (complete liabilities/complete property)
D. Liquidity Ratios:
5. Present Ratio (present property/present liabilities)
c. College students are required to report the present inventory worth for the businesses.
d. Impartial Auditor’s Report. College students will decide the kind of audit opinion offered within the Audit report (Unqualified, Certified, Disclaimer or Adversarial).
5. From the Proxy (DEF) filings college students will present the next data:
a. College students can discover data associated to Audit Charges and background data of the Key Officers of the corporate.
b. College students will report any modifications within the Auditor from the prior 12 months and report any cause given for such a change.
6. After offering the aforementioned data college students will lastly present their Assessment relating to the higher firm to speculate.
