ACCT 2301 UH The Earnings per Share of Any Company Worksheet

This project covers the principles of financial statement analysis. The goal of this assignment isfor you to experience finding out relevant accounting and other information about a corporation asif you were an investor. You will find out that it is relatively easy to look up information aboutany publicly traded company online. ACCT 2301
Experiential Data Analytics Project
Why Financial Statement Analysis?
“Financial statements are the primary information that firms publish about themselves, and
investors are the primary users of financial statements. Firms seek capital from investors and
prepare financial statements to help investors decide whether to invest. Investors expect the firm
to add value to their investment-to return more than was invested- and read financial statements to
evaluate the firm’s ability to do so. Financial statements are also used for other purposes.
Governments use them in social and economic policy- making. Regulators such as the antitrust
authorities, financial market regulators, and bank inspectors use them to control business activity.
Employees use them in wage negotiations. Senior managers use them to evaluate subordinates.
Courts, and the expert witnesses who testify in court, use financial statements to assess damages
in litigation. Each type of user needs to understand financial statements. Each needs to know the
statements’ deficiencies, what they reveal, and what they don’t reveal. Financial statement analysis
is the method by which users extract information to answer their questions about the firm.”
– Stephen H. Penman

This project covers the principles of financial statement analysis. The goal of this assignment is
for you to experience finding out relevant accounting and other information about a corporation as
if you were an investor. You will find out that it is relatively easy to look up information about
any publicly traded company online.

Instructions:
Follow the directions for each question below to look up the answers to the questions on the
worksheet. Write the appropriate response in the spaces provided on the worksheet. Then starting
April 14th use the worksheet to answer the questions on BLACKBOARD ONLINE
ASSESSMENT. The worksheet is for you to look up your answers and write them down so that
you can answer the assessment questions without guessing. The worksheet is NOT to be
submitted. To receive credits, you must complete the BLACKBOARD ONLINE ASSESSMENT
on or before 11 PM CST May 1st, 2022. There are 14 multiple choice questions and 2 free
response questions. Thus, there are 16 questions total with each question carrying 0.625 points to
add up to a total of 10 points.
Please be sure to look up the answers and fill out the worksheet before doing the online
assessment. If you just guess you will probably end up with a low score.
Project Worksheet
The following assignment is designed to introduce you to some of the FREE
financial information that is available on the web. This can be especially useful for
personal investing decisions. For the first part of the project, we focus on a single
site, Yahoo! Finance. There are, however, various other good sites such as Google
Finance. We encourage you to explore these web sites on your own. Use the glossary
of terms for any items that are new to you.
For the second part of the project, you should use the 10-Q report (quarterly
report) of Ford Motor Company, and General Motors Company (GM). You can
go to the Investor Relations section of their website, or you can go to sec.gov to
search for their 10-Q filings.
Click the link below and downloaded the 10-Q reports
Ford Motor Company Q2 10-Q (for the quarterly period ended June 30, 2021)
https://www.sec.gov/ix?doc=/Archives/edgar/data/37996/000003799621000058/f-20210630.htm
Ford Motor Company Q3 10-Q (for the quarterly period ended September 30, 2021)
https://www.sec.gov/ix?doc=/Archives/edgar/data/37996/000003799621000086/f-20210930.htm
General Motors Company Q2 10-Q (for the quarterly period ended June 30, 2021)
https://www.sec.gov/ix?doc=/Archives/edgar/data/1467858/000146785821000142/gm20210630.htm
General Motors Company Q3 10-Q (for the quarterly period ended September 30, 2021)
https://www.sec.gov/ix?doc=/Archives/edgar/data/1467858/000146785821000152/gm20210930.htm
For the purposes of this exercise, we will be examining Ford Motor Company and in the second
part of the project comparing it to GM Company. The fiscal year end of Ford Motor Company
and GM Company both are December 31. In order to use recent comparable information in the
second part of the project you will gather financial statement facts from the 3rd quarterly report (of
fiscal year 2021) of Ford Motor Company ending 9/30/2021 and compare those with the 3rd
quarter (of fiscal year 2021) of GM Company ending 9/30/2021.
1st PART OF THE PROJECT
First, go to the following web site: https://finance.yahoo.com/
Type “Ford Motor Company” in the search box. Then click on “search”. Select the ticker symbol
“F” from the menu of choices. (NOTE: The ticker symbol for Ford Motor Company is F. The
ticker symbol is a letter designation that is assigned to stocks and mutual funds traded on U.S.
exchanges. You may use it to “get quotes” instead of typing in the whole company name)
This will take you to a page of basic information about Ford Motor Company’s stock. It will show
you the current price and the volume of trading. From this menu, you will click on the following
links to obtain the necessary information:
• Summary
• Profile
• Financials
• Historical Data
Each of the above links will be discussed in the following pages. You will be asked to go to each
of the linked pages and record information in the spaces provided.
Summary
The earnings per share of a company measures the amount of income earned for each share of stock,
which is net income divided by shares of common stock outstanding. Earnings per share are
abbreviated as “EPS”.
The earnings per share (EPS) for Ford Motor Company for the most recent year shown on this
page are
(Note: TTM = trailing twelve months (the past 12 months)
The current price of Ford Motor Company’s common stock is?
on Date
(Record the Last Trade price and the date you looked at it)
Profile
From the Profile Page, you can obtain a brief Business Description. There is also general contact
information as well as links to several other items, such as the company web site.
From this page, answer the following questions about Ford Motor
Company:
1.
What Industry is Ford Motor Company in?
2.
How many full-time employees work for Ford Motor Company?
3.
Who is the Chief Executive Officer?
4.
Who is the Chief Financial Officer?
Historical Data
From this page, you can obtain daily, weekly, and monthly prices for the company for a
range of dates. You can also obtain information on dividends. Select/input “Time Period” as
9/30/2021-10/1/2021, “Show” as Historical Prices, and “Frequency” as Daily to capture the
historical price at the end of last year. (If select/input date couldn’t apply, simply scroll down
to find “Sep 30, 2021”)
Look at the column listing the adjusted closing price (this price is adjusted for stock splits
and stock dividends).
What was the adjusted Closing price of the company for 9/30/2021?
How much money would you have made or lost from the price change if you had purchased one
share of Ford Motor Company stock on 9/30/2021 and sold it on the day you looked up the current
price?
2nd PART OF THE PROJECT
Financials
From this page, you can view the recent quarterly or annual financial
statements of the company. In order to compare Ford Motor Company to a close
competitor GM Company, we will use data for the quarter ending 9/30/2021.
Open the 10-Q of Ford Motor Company and GM Company (link provided at the beginning of this
project) and click on income statement or balance sheet of Ford Motor Company as requested
below.
Ford Motor Company
Consolidated Income Statements: Page 2 on Q2 & Q3 reports.
Consolidated Balance Sheets: Page 3 on Q2 & Q3 reports.
GM
Condensed Consolidated Income Statements (Unaudited): Page 1 on Q2 & Q3 reports.
Condensed Consolidated Balance Sheets (Unaudited): Page 2 on Q2 & Q3 reports.
Notice that all numbers are in millions of dollars in the following part of the project. Write them
down on your worksheet just as they are. For example, if it says $7,000, just write $7,000 or $7,000
million as your final answer, do not write $7,000,000,000.
Questions 1 through 16 pertain to Ford Motor Company
1.
From the quarterly Income Statement, what was the total revenue for the quarter ending on
9/30/2021?
2. From the quarterly Income Statement, what was the total revenue for the previous quarter
ending on 6/30/2021?
3. Now use your answers of 1 and 2 to calculate the % growth in revenue for the quarter
(subtract revenues for the quarter ending 9/30/2021 from revenues for the quarter ending
6/30/2021 and divide the result by the revenues for the quarter ending 6/30/2021. Then
express the result as a percentage).
Revenue Growth =
4.
From the quarterly Income Statement, what was Consolidated Net Income for the quarter
ending on 9/30/2021?
5. From the quarterly Income Statement, what was the Gross Profit for the quarter ending on
9/30/2021?
*Gross Profit = Total Revenue – COGS
6. From the quarterly Income Statement, what was the Cost of Sales (cost of goods sold) for the
quarter ending on 9/30/2021?
7. From the quarterly Balance Sheet, what was the value of inventory as of
9/30/2021?
8. From the quarterly Balance Sheet, what was the value of inventory as of 6/30/2021?
9. From the quarterly Balance Sheet, what was the total assets value as of 9/30/2021?
10. From the quarterly Balance Sheet, what was the total liabilities as of 9/30/2021?
11. From the quarterly Balance Sheet, what was the total current assets value as of 9/30/2021?
12. From the quarterly Balance Sheet, what was the total current liabilities value as of
9/30/2021?
Use Quarterly data ending at 9/30/2021 to answer question 13 to 16.
13. The largest current asset category is:
14. The largest current liability category is:
15. The largest non-current asset category is:
16. The largest non-current liability category is:
FINANCIAL RATIOS
Use the information gathered from Ford Motor Company’s Financials on the
previous pages to calculate the following ratios for Ford Motor Company. Do
not try to look these up on the website. Instead, you must make the calculation
yourself.
Inventory Turnover
(Cost of Goods Sold / Average Inventory)
Average Inventory = (Beginning Inventory + Ending Inventory) / 2
Gross profit %
(Gross Profit / Revenues) *100%
*Revenue should include only net sales.
Debt Ratio
(Total Liabilities / Total Asset)
Current Ratio
(Current Asset / Current Liabilities)
Compare Ford Motor Company to its close competitor GM.
Now open the income statement and balance sheet for GM:
Condensed Consolidated Income Statements (Unaudited): Page 1 on Q2 & Q3 reports.
Condensed Consolidated Balance Sheets (Unaudited): Page 2 on Q2 & Q3 reports.
Look up the following income statement information:
Total Quarter Total Revenues (9/30/2021)
Total Quarter Revenues (6/30/2021)
Quarter Gross Profit (9/30/2021)
*Gross Profit = Total Revenue – COGS
Look up the following Quarterly balance sheet information for GM
9/30/2021:
Total Assets
Total Liabilities
Current Assets
Current Liabilities
Now use these 7 values (above) to calculate the following ratios for
GM in order to compare them to Ford Motor Company. (Use the
same calculation methods as for Ford Motor Company)
Revenue Growth
Gross Profit%
*Revenue should include Sales only.
Debt Ratio
Current Ratio
Based on a comparison of these two ratios between Ford and GM
which company seems to have better liquidity, which has better
margin which has better solvency, and which has better revenue
growth? Enter the Company names below.
Revenue Growth?
Gross Profit?
Solvency? (Debt Ratio, low is good)
Liquidity? (Current Ratio, high is good)
HORIZONTAL ANALYSIS
Horizontal analysis is also known as trend analysis. By looking at recent trends, and also taking
into disclosures and press releases from the company and outside the company, the financial
markets often try to predict the future stock prices.
In the next few steps, do a simple 3-year trend analysis.
Go to Ford Motor Company and GM Company’s 10-K for 2020 and
open Consolidated Income Statements. (Click the link below and
download the 2020 10-K)
Ford Motor Company 10-K: (For the fiscal year ended December 31, 2021)
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000037996/000003799622000013/f20211231.htm
Page: 110
GM Company 10-K: (For the fiscal year ended December 31, 2021)
https://www.sec.gov/ix?doc=/Archives/edgar/data/1467858/000146785822000034/gm20211231.htm
Page: 53
Write down the Total Revenues
Year Ended (Fiscal year)
Ford Motor Company
Dec 31, 2019 (2018)
Dec 31, 2020 (2019)
Dec 31, 2021 (2020)
Write down the Operating Income.
Year Ended (Fiscal year)
Ford Motor Company
Dec 31, 2019 (2018)
Dec 31, 2020 (2019)
Dec 31, 2021 (2020)
Write down the Consolidated Net Income
Year Ended (Fiscal year)
Ford Motor Company
Dec 31, 2019 (2018)
Dec 31, 2020 (2019)
Dec 31, 2021 (2020)
GM Company
GM Company
GM Company
Open an Excel Spreadsheet. Type the Revenues for Ford Motor Company and GM Company in
two separate columns. Title them as Ford Motor Company Revenues and GM Company revenues
respectively. Make a simple line chart for each. Title the line charts as Ford Motor Company
Revenues and GM Company revenues respectively.
Next, type the Operating Income for Ford Motor Company and GM Company in two separate
columns. Title them as Ford Motor Company Operating Income and GM Company Operating
Income respectively. Make a simple line chart for each. Title the line charts as Ford Motor
Company Operating Income and GM Company Operating Income respectively.
Next, type the Net Income for Ford Motor Company and GM Company in two separate columns.
Title them as Ford Motor Company Net Income and GM Company Net Income respectively. Make
a simple line chart for each. Title them as Ford Motor Company Net Income and GM Company
Net Income respectively.
Once all six-line charts are ready, write down a brief analysis on Ford Motor Company’s
revenue, operating income and net income trends. Next, write down a brief analysis on GM
Company’s revenue, operating income and net income trends. Contrast the two. There is no
one correct answer. We will be checking for plagiarism.
Is there any indication that the current disruptions to global supply chain had an impact on
the bottom-line of Ford or GM? Substantiate your answer. Research this by using recent
news discussion on the internet. Fill in your brief response in the worksheet, keep it ready
and then type it in the blackboard assessment when you take it. Your answers will be
checked for plagiarism.