"Financial Statement Accuracy" Please respond to thefollowing:

Identify the key steps in the closing process that provide themost opportunity to make mistakes in processing accounttransactions. Make at least two (2) recommendations for improvingthe accuracy and reliability of the information in the gaps thatyou have identified. Justify your response.

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Nestor RutherfordLv2

28 Sep 2019

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This term you have learned to understand a companyâs financial story using the language of accounting. The recording and reporting of information is essential to decision makers and other users of financial information; numbers on the various financial statements are used to help further understand the financial condition of the business. This process is known as financial ratio analysis and allows us to analyze the companyâs financial position in relation to other organizations in the industry. In this final assignment, you will apply the concepts you have learned throughout the term to perform financial statement analysis and to offer some recommendations.

Assume that you are a health care consultant hired by the Dependable DME Company. DME is Durable Medical Equipment and includes all equipment that benefits patients who have certain medical conditions. The owner of the company, David Smith, is interested in applying for a loan to expand his business; he desires to open a second location in another city. He is preparing to apply to a local bank for a loan.

The bank will base its decision on the following averages for the DME industry:

Ratio	Industry Average
Current ratio	1.50
Quick ratio	0.80
Receivables turnover ratio	18.0
Inventory turnover ratio	20.0
Debt to assets ratio	0.56
Profit margin	10.25%

The balance sheet data for Dependable DME Company follows:

	December 31, 2017	December 31, 2016
Cash	$75,000	$60,000
Accounts receivable	40,000	20,000
Inventory	30,000	20,000
Prepaid insurance	5,000	5,000
Total current assets	140,000	105,000
Property and equipment	600,000	550,000
Accumulated depreciation	140,000	110,000
Total property and equipment	460,000	440,000
Total assets	$600,000	$545,000
Accounts payable	$60,000	$60,000
Other current liabilities	40,000	45,000
Total current liabilities	100,000	105,000
Bonds payable	150,000	150,000
Total liabilities	250,000	255,000
Common stock	250,000	250,000
Retained earnings	100,000	40,000
Total stockholdersâ equity	350,000	290,000
Total liabilities and stockholdersâ equity	$600,000	$545,000

The income statement data for Dependable DME Company follows:

Sales	$600,000
Cost of goods sold	350,000
Gross profit	$250,000
Operating expenses	100,000
Operating income	$150,000
Interest expense	25,000
Income before taxes	$125,000
Income tax expense	65,000
Net income	$60,000

Required:

Calculate the following six (6) ratios: Current Ratio, Quick Ratio, Receivables Turnover Ratio, Inventory Turnover Ratio, Profit Margin Ratio and Debt to Assets Ratio. Be sure to show the actual calculation as well as your final answer.

You are only required to calculate the ratios for 2017; however, for two of the ratios (Receivables Turnover Ratio and Inventory Turnover Ratio), you will need data from 2016 for the formula. When calculating the Quick Ratio, please note that Short-Term Investments are $0 in this scenario. (24 points; 4 points for each ratio calculation)

Below each ratio, comment on the interpretation of the ratio. In other words, what does the result tell you, specifically? (8 points)

Based upon the industry averages upon which the bank relies, should they approve the loan to Mr. Smith? Why or why not? (7 points)

In one-half page, comment on what financial aspect of Dependable DME Company looks good and where can Mr. Smith make some improvements. Specifically identify at least two recommendations to Mr. Smith that can be made to improve the financial position of his business. (8 points)

Assignment 2: You Are an InvestmentAnalyst
Due Week 10 and worth 250 points

As the CFO of your corporation, you are in charge of preparing andanalyzing financial statements that will be presented to potentialinvestors and creditors. However, before you can present thefinancial statements to investors and creditors, you need toprepare the financial statements with supporting analysis. Selectone (1) pair of the following companies to conduct your financialstatement analysis.

Pepsi versus Coca Cola, or

Amazon versus eBay

Target versus Walmart

Nike versus Reebok

Write a six to eight (6-8) page paper in which you:

1) Analyze each companyâs history, product / services, majorcustomers, major suppliers, and leadership, and provide a synopsisof each company.

2) Identify three (3) profitability ratios that creditors may beinterested in. Calculate the ratio for each company, and prepare areport to summarize your findings on the financial health of eachcompany. Also, recommend to management the manner in which they canimprove each of the three (3) ratios identified.

3) Summarize at least two (2) news events (this may includemergers, acquisitions, or political issues) that occurred from 2012to the present day, and analyze the impact that these events had oneach companyâs financial statements. Indicate the primary way inwhich the merger, acquisition or political issues influencepotential investorsâ and creditorsâ perception of bothcompanies.

4) Analyze each companyâs income statement over the past two (2)years, and determine which company outperformed the other. Suggesta way in which the lagging company can improve its income. Supportyour suggestion with a specific analysis.

5) Analyze each companyâs balance sheet. Prepare a verticalanalysis for each company, interpret the results, and write afinancial report. Also, suggest the manner in which the companythat is not performing well can improve its balance sheet in orderfor it to be attractive to potential investors.

6) Use at least four (4) quality academic resources in thisassignment. Note: Wikipedia and other Websites donot qualify as academic resources. PLEASE INCLUDE THE WEBSITES USEDFOR INFORMATION.

greymammoth322

note: Working managers may complete this exercise based on the practices of their own organizations. Students may complete this exercise based on the practices of a current or previous employer. Instructions 1. Select and describe the boundaries of the system of interest; the term âorganizationâ will be used to refer to this selected system. You may select a team, a department, a small organization (e.g., an office practice), or an entire organization. 2. To familiarize yourself with the criteria, review the section called âCategory and Item Descriptionsâ in the Baldrige Criteria for Performance Excellence available from: www.nist.gov/baldrige/ publications/hc_criteria.cfm 3. The Organizational Assessment Worksheet provides a general description of the criteria category followed by selected questions from the respective 2011â2012 Health Care Criteria for Performance Excellence category. 4. Based on the system selected in question 1, write a brief reply to the selected questions. Briefly describe your organization, including its services; size; geographic community; key patient or customer groups; and current facilities, equipment, and technology, as well as the number of patients or clients it serves. Briefly describe your organizationâs key challenges and your organizationâs current performance improvement system. How do senior leaders deploy your organizationâs vision and values through your leadership system, to the workforce, to key suppliers and partners, and to patients and stakeholders as appropriate? How do senior leaders encourage frank two-way communication throughout the organization? How does your organization conduct strategic planning? Summarize your organizationâs action plans, how they are deployed, and key action plan performance measures or indicators. How do you identify patient, stakeholder, and market requirements for service offerings? How do you build and manage relationships with patients and stakeholders to meet their requirements and exceed their expectations at each stage of their relationship with you? What are your key organizational performance measures? How do you use these data and information to support organizational decision making and innovation? How do you assess your workforce capability and capacity needs, including skills, competencies, and staffing levels? How do you address workplace environmental factors to ensure and improve workplace health, safety, and security? How do you design and innovate your work processes to meet all the key requirements? How do you improve your work processes to improve healthcare outcomes, to achieve better performance, to reduce variability, and to improve healthcare services? Provide data for one key measure or indicator of healthcare outcomes that is important to your patients and stakeholders. Provide data for one key measure or indicator of patient or stakeholder satisfaction. Provide data for one key measure or indicator of financial performance. Provide data for one key measure or indicator related to operational performance. Provide data for one key measure related to achieving legal, regulatory, and accreditation requirements. Prioritizing Improvement Opportunities 1. Review the responses to the organizational assessment questions. 2. Note any questions for which you could not provide a response (i.e., the organization does not have a defined process or approach to address the topic of the question). 3. Review the organizational performance results data. 4. Select one or more measures that demonstrate less than desirable results. 5. Select one item from question 2 or 4 as the performance gap for the performance improvement exercise .

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