Financial Accounting Capstone Project
Please read it very carefully. Explain the meaning of ratios/your answers when appropriate. The exact number of sources needed is depend on writer. For ratios calculation, annual report of Target to be used: https://corporate.target.com/_media/TargetCorp/annualreports/content/download/pdf/Annual-Report.pdf?ext=.pdf ; Annual report of Walmart to be used: http://s2.q4cdn.com/056532643/files/doc_financials/2013/Annual/2013-annual-report-for-walmart-stores-inc_130221024708579502.pdf The numbers should be from year 2012 (fiscal year ends January 31, 2013 for Walmart, and fiscal year ends February 2, 2013 for Target.) P.S. I will place two similar orders and please assign different writers for them. Contents should to be original and unique every time.
Financial Accounting ACCT202 Capstone Project – An Overview
At North, all of our ACCT202 –Financial Accounting II courses are encouraged to have some type of
capstone project incorporated into the course. Your course has adapted with some modification the
continuing analysis problem found in your textbook as the capstone project that meets our needs.
Before starting this project I want to emphasize how important this project is to North’s accounting
department and its ability to design, deliver and update courses that meet student needs while having
some sort of overarching evidence that students are learning. This important project also provides
accounting students with an opportunity to demonstrate that they can “pull everything together” in a
professional and learned way in regards to their experiences in ACCT201 & ACCT202. If we accept that
accounting, as defined, is a system of identifying, recording, and communicating economic events of the
firm so that interested users can make decisions, then it should be clear that this project focuses on
using all you have learned about identifying transactions, recording those transactions and preparing
financial statements so that you can now use that knowledge for the end game- analyze financial
statements in order to make sound business decisions regarding the firm.
Therefore, this project requires you to step up your level of professionalism, written communication,
research and analysis. In this project we’re looking for the ability to analyze accounting information and
prepare a professional written report. We’re looking for the writing process and communications
necessary to be successful in the business community. In the business community it’s important that we
avoid giving one line answer that fail to allow a reader or customer to grasp the impact and importance
of what we are communicating. Likewise, in this project, brief incomplete concepts and statements,
unsupported conclusions and less than professional written communication will not be acceptable.
In preparing your written response in this project – I want you to remember at all times that you’re
either taking the role of a Wall Street analyst who has tens of people listening to your advice, and
depending on what you say, these people might invest tens of millions of dollars based on your analysis
and recommendations. Or, you might want to think of yourself as a highly compensated vice president
of a commercial bank making decisions to loan millions of dollars to a company based on your analysis
of the company future ability to sustain itself, grow and ultimately repay the loan. Either way, your
analysis must to be thorough and your concluding statements and recommendations have to be clear;
supported by verifiable source data or calculations.
In all aspects of this project you are required to show your own work. Simply Googling the ratios, using
some other investment web site or printed research report issued by a brokerage firm or bank and
turning it in as your own, will not work. In fact the use of such tactics and submitted response will be
considered a form of plagiarizing and could result in you receiving a failing grade or other sanctions
imposed by the college. In the written/analysis portion, keep in mind the importance of the writing
process and communication necessary in the business community – and take a professional approach to
this answer. Please visit the Page One Learning Center on campus if you need assistance in writing
professional level papers. You can also visit the business librarian if you need assistance doing college
level research. These resources are both available to online students who cannot come to campus via
links in Canvas to the Page One Learning Center and to the NSC Library Resources.
1) Compute the ratios in the exhibit on page 3 for Target and Walmart for 2012. The financial
statements can be found in the annual report – visit each company’s website, then go to
investor relations to access the online report. For both companies, assume that all sales are
credit sales. Compare the ratios of Target and Walmart. Which company do you think is doing a
better job in managing the following? Explain your answers.
b. Net income or loss
c. Financing with debt or equity
d. Investing in assets
e. Rewarding its stockholders
2) Compute Target’s ROE for the year ending January 29, 2013, including the elements of net
income/sales, sales/average total assets, and average total assets/average stockholders’ equity.
What does this analysis tell you about how Target generates its ROE?
3) What are Target’s dividends per share and dividend payout ratio for the last two years? Why do
you think Target pays a dividend? How do you think Target determines the amount of dividend
they will pay?
4) Given Target’s stock price was $60 per share at the end of January 2013, what was Target’s PE
ratio as of that date? If the average PE for companies is 15, what does this tell you the market is
saying about Target’s future?
5) Research Target for any important issues including ethical issues which it may have had to deal
with in the last three years – evaluate the company’s response to these issues.
6) Looking back over your answers to questions 1 – 5, how do you think Target is performing?
What is the short term (one year) and long run (five+ year) financial outlook Target? Would
you buy the stock of Target? If so, why? If not, why not? On the other hand, if you were a
commercial banker, would you lend money to this company? Support your conclusions with a
summary of your research and analysis.
7) Do you have any ideas of how to improve Target’s performance and its value?