Name: Part 3 Financial Analysis Caserelates to the textbook

Name: Part 3 Financial Analysis Caserelates to the textbook Modules… Name: Part 3 Financial Analysis Case relates to the textbook Modules 5, 6, 7 and 8. Instructions:  Use this Word Document as your template to complete Part 3. Answer the questions under each of the applicable areas in black font and provide information for each company.  Upload your completed Part 3 template by clicking on the Part 3 Financial Analysis Case link.  Please  name at the top of this page in the Name area and save your file with the initial of your first name and your last name. Use single space with proper English.  Please use this template to answer the requirements in the order below.   Use the 10-K Document from the SEC EDGAR database for each company to answer the following questions for each company. You can use direct references from the reports, but you must explain or comment in . Do not use the interactive Data file to answer Part 3 of the Financial Analysis Project.  The author of the text uses the reference of footnotes to the financial statements. Many companies use the terminology notes to the financial statement, which is a synonymous term to footnotes to the financial statements.  It is important for you to understand that the notes to the financial statements are an integral part of the audited financial statements.  Do not ignore the notes to the financial statements in your analysis.The GAP, Inc. (GPS) for year ended January 29, 2022 Direct link to 10-K  https://www.sec.gov/ix?doc=/Archives/edgar/data/39911/000003991122000012/gps-20220129.htmThe TJX Companies, Inc. (TJX) for year ended January 29, 2022 Direct link to 10-K https://www.sec.gov/ix?doc=/Archives/edgar/data/109198/000010919822000008/tjx-20220129.htm Requirements:  The questions are in bolded black font.  Please respond below each question.1.  Examine revenue and related accounts.  Revenue is the largest item on the income statement, so we need to assess it on a quantitative and qualitative basis. 1a. Read the management’s discussion and analysis (MD&A) section of the 10-Ks, which is found in Item 7 of the table of contents.  Explain how the companies’ senior managers explain net sales or revenue in the most recent fiscal year.  Provide the page number(s) you are using from the 10-K as your reference to this question. Also, discuss at least two other items of interest discussed in the MD&A.    1b. Find the footnote or notes to the financial statements on sales revenue recognition and gift card revenue recognition policy if applicable.  Provide the page number of the note for each company and how the company recognizes revenue.  Also, in your response compare the revenue recognition to each other. Remember that the notes to the financial statements are an integral part of the financial statements, so are part of Item 8 and follow the audited financial statements.    1c. Find the footnote or notes to the financial statements on the operations of the business and segment information.  Provide a summary of what the company considers their business and segments.  Include a discussion of why segment information is important information. Provide the page number you found this information.  Remember that the notes to the financial statements are an integral part of the financial statements, so are part of Item 8 and follow the audited financial statements.      2.  Find the GPS and TJX credit ratings for long-term rating on debt using the following resources:  Moody’s and Standard and Poor’s. You will need to register. You do not need to pay for these services.  These are the registration websites:  https://www.moodys.com/registerinfo.aspx?from=Nav_Reghttps://www.standardandpoors.com/en_US/web/guest/register   2a. What are the credit ratings for both companies from each of these agencies in reference to long-term rating?  Provide the date of the rating or last review date whichever is more current, too. For Standard and Poor’s Global use the local currency long term for the most current related research and credit information.    Moody’s Rating and DateStandard and Poor’s Global Rating and Last review dateGPS  TJX   2b. Explain what the ratings mean based on each agencies credit rating.  Read over pages 7-18 to 7-24 in the textbook.  Exhibit 7.3 explains the ratings.  Based on the ratings which company would you invest in the company’s long term debt issuance?  Why?    3.  Analyze the inventory account and answer the following questions using the financial statements and notes to the financial statements:3a. Which financial statement shows merchandise inventories?  What subsection of the statement does this account appear?  What has been the dollar change from the past year to current year for each company?  Make sure you identify the dollar amount change and if it is an increase or decrease.  Make sure you identify in millions or thousands. Which financial statement shows merchandise inventories? What subsection of the statement does this account appear? What has been the dollar change from the past year to current year for each company?  Make sure you identify the dollar amount change and if it is an increase or decrease. Make sure you identify in millions or thousands.GPS   TJX    3b. Using the footnotes or notes to the financial statements identify how the company is costing inventory and the inventory costing method each company is primarily using.  What is included in the inventory cost?  Provide the page number of the note you are referencing.       3c. Compute the average day’s inventory outstanding for the current and past year for each company and show your calculations. Review page 6-13, which shows the formula as (365 times Average Inventory)/ Cost of Goods Sold.  To determine the average inventory use the current year and past year inventory divided by 2, since the ending inventory of one year is the beginning inventory of the next year.  Cost of Goods Sold is the same thing as Cost of Merchandise Sold.  Round to the nearest day.  You can find this information on the current 10-K except for the following information for 2020 Inventory for GPS $2,156 million and TJX $4,872,592 thousand. Comment on your results including a comparison of the two companies. You must show your work to earn full credit.Round   to the nearest dayCurrent yearPast yearGPS  TJX  Comments:      3d. Does the company face any inventory related risk? You need to use the 10-K Part 1A Risk Factors for both companies and find at least one risk factor that relates to inventory for each company.   Comment on the risk factor you picked for each company. Explain why you picked this risk factor for each company.   Provide the page number that you are referencing in this question.           3e. Compute Days Payable Outstanding (DPO) for the current and past year for each company and show your calculations.  Review page 6-15, which shows the formula as 365 times Average Accounts Payable/Cost of Goods Sold. Cost of Goods Sold is the same thing as Cost of Merchandise Sold. Round to the nearest day.  You can find this information on the current 10-K except for the following information for 2020 Accounts Payable for GPS $1,174 million and TJX $2,672,557 thousand. Comment on your results including a comparison of the two companies. You must show your work to earn full credit.Round to the nearest dayCurrent Past yearGPS  TJX  Comment:       4.  Analyze the net fixed assets (PPE-Property, Plant, and Equipment)—a company may not use the exact wording, but please find the related account and answer the following questions:4a. Provide the percentage Property and Equipment, net as a percentage of total assets in the current year from the vertical analysis in Part two.  What was the dollar change difference from the previous year for Property and equipment, net?  Which financial statement did you look at to find the fixed assets?  Discuss the two companies’ percentages and dollar change in PPE from last year. Property and Equipment, net as a percentage of total assetsWhat was the dollar change difference from the previous year for Property and equipment, net?Which financial statement did you look at to find the fixed assets? GPS   TJX   Comment:   4b. Using the notes to the financial statements, answer the following questions for each company and provide the page number of your reference.  What exactly are included in the companies’ property and equipment as listed in the notes to the financial statements? What depreciation method are they using for financial reporting?   4c. Are any long-lived assets impaired per the notes to the financial statements for each of the companies?  Provide how each company determines impairment of long-lived asset per their notes. Is the impairment charge significant? Provide the page number of the note you are using as a reference.    4d. Did the company buy any fixed assets or capital expenditures during the year using cash? Provide the name of the financial statement you used to determine if the company bought fixed assets for cash, provide the amount purchased in current year, and the section of the financial statement you found this information in along with the label used to show that cash was paid for fixed assets?  Companies use different labels when they are purchasing fixed assets, so make sure you do not overlook this cash purchase, which might be worded differently.   4e. Compute the PPE turnover (sales/Average PPE Assets, net) for the current and past year for both companies? Show your calculations and show two decimal points.  Please review pages 6-25 and 6-26.  Companies might use different account titles, so you need to be review and make sure you pick the like-kind account.   You can find this information on the current 10-K except for the following information for 2020 Net Property and Equipment for GPS $3,122 million and TJX $5,325,048 thousand. You need to show your calculation to earn credit.  Comment on your results.  I am looking for more than a one-sentence comment that I can see from the numbers given.Show your calculations and show 2 decimal points. CurrentPastGPS  TJX  Comments:   5. Analyze the company’s dividend payment to shareholders.  Review EPS and review the trend.5a. Provide the financial statement that shows the amount of cash dividends paid in the current year and the section name that dividends paid shows on the statement if applicable. What was the total amount of the dividends paid?   Comment on why a company will pay a dividend or not and discuss the trend of dividends being paid out over the current and past years presented in the financial statement for each of these companies.   In ThousandsName the financial statement that list out dividends paid if applicable and the section name that dividends paid shows on the statement if applicable.Amount of Dividends paid in dollar amount GPS   TJX   Comment on why a company will pay a dividend or not and discuss the trend of dividends being paid out over the current and past years presented in the financial statement for each of these companies.  5b. Which statement can you find the basic and diluted earnings per share (EPS) attributable to the continued operations of the shareholders of the company? What is the basic EPS for the current year?  What is the diluted EPS for the current year? Comment on the trend of EPS over the current and past two years and how diluted EPS has been impacted for each company. Name the financial statement that Shows EPSBasic EPSDiluted EPSGPS   TJX   Comment on the trend of EPS over the current and past two years and how diluted EPS has been impacted for each company.     Grading Rubric Part 3 Question 1 a-c5 pts. Each or total of 15 pts.Question 2 a and b8 pts. for “a” and 5 pts. for “b” or total of 13 pts.Question 3 a-e5 pts. each for a, b, and c and 8 pts. each d and e or total 31 pts.Question 4 a-e5 pts. Each for a, b, d and 8 pts. for c and e or total of 31 pts.Question 5 a and b5 pts. Each or total of 10 pts.Total points100 pts.You will be penalized 20% of the grade if it is turned in after the due date but no later than 48 hours from due date.  You will earn a zero for the part of the case if not turned in by the 48-hour late penalty. I will take off 1/2 pt. for each spelling or grammar error.Academic Honesty Policy: Each student is assumed to be a mature and responsible adult with high academic and moral standards.  There is no place in the business profession or the classroom for dishonesty.  Therefore, any student found cheating or presenting material in a dishonest fashion would earn a course grade of “F.” Examples of presenting material in a dishonest fashion include but are not limited to the following:Using solution material that was previously posted in another class or termUsing a case solution from a previous term and making modifications to this previous case solutionUsing a student’s work from a previous or current termYou should not exchange files or solutions with your fellow classmates.  You can work with tutors on concepts, but you cannot have a tutor work with you on a specific graded assignment.  Remember, it does not matter what type of assignment it is, if you are found cheating you will receive an “F” for the course and Bellevue University will be informed of your actions for further proceedings. Accounting Business Financial Accounting MBA MBA-755

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