Strayer FIN100 Week 7 Assignment Latest 2024

FIN100 Principles of Finance

Week 7 Assignment

– Financial Statement Analysis

Overview

For this assignment, you will complete a financial statement analysis using an annual report for Just Running, a retail running shoe store. The assignment templates begin in Week 5 of the webtext and continue through Week 7 when you will finalize and submit your assignment.

Scenario

Company Profile: Just Running began as a small retail store over 50 years ago. Thanks to solid investments in its own line of quality running shoes, the company has grown into a large online retailer and its shoes are now sold across the country. Now, Just Running believes it’s time to expand again. They’re bringing on more employees, like Mariposa, whom we met in Week 3, to develop and promote a new collection of running gear and accessories that will be sold alongside the company’s best-selling shoes.

As part of its responsibilities to shareholders, Just Running has recently published its Annual Report. In the webtext you will find the company’s balance sheet and income statement for this year and the previous one. Just like a shareholder might do, you will review these reports and use profitability ratios to analyze the company’s finances.

Instructions

*This assignment will be developed in the webtext templates, downloaded, and submitted in this assignment in Week 7.

Part 1: Income Statement in Chapter 5 of the webtext.

Complete the assigned spreadsheet templates to find the answers to the following:

Find the changes in Net Sales and Net Income

What is the change in total revenue/net sales from last year to this year?

What is the change in net income from last year to this year?

Calculate the Net Profit Margin. The net profit margin can be used to help you analyze a company’s profitability (how likely it is to make a profit).

Determine the net profit margin (net income/net sales) for last year.

Determine the net profit margin (net income/net sales) for this year.

Analyze the results.

Considering the fact that Just Running is in the retail industry, what would its net profit margins tell you?

If you owned stock in Just Running, what would you notice about the change in the net profit margin from last year to this year?

Why is profitability important to a stockholder?

Part 2: Balance Sheet in Chapter 6 of the webtext.

Complete the assigned spreadsheet templates to calculate the year-over-year changes:

Calculate the change in assets from last year to this year as a dollar amount.

Calculate the change in liabilities from last year to this year as a dollar amount.

Calculate the change in equity from last year to this year as a dollar amount.

Use a leverage ratio. Stockholders can use a leverage ratio to compare a company’s total debt (the amount a company owes) to its total assets (the company’s items of value). A higher total debt to total assets ratio can indicate a higher risk.

Calculate the total debt to total assets ratio (total liabilities/total assets) for this year.

Calculate the total debt to total assets ratio (total liabilities/total assets) for last year.

Analyze the company’s leverage

If you owned stock in Just Running, what would the total debts to total assets ratios for this year and last year tell you about the company’s leverage?

Part 3. Use both reports to answer questions on return on equity in Chapter 7 of the webtext and review all work for the Week 7 Assignment.

The return on equity, or ROE, can also help you measure a company’s ability to turn equity investments into profit:

Calculate the return on equity.

Use both reports to calculate the ROE (net income / total equity) for this year and last year.

Analyze the return on equity.

If you owned stock in Just Running, what would the return on equity from last year and last year tell you about the company’s ability to make a profit?

The specific course learning outcome associated with this assignment is:

Explain the fundamental concepts of finance in personal and business contexts.

Submission Instructions

Complete the assignment templates and the assignment in the webtext – Chapter 5, Chapter 6, and Chapter 7.

Download the assignment.

Upload and submit your Week 7 assignment below.

Please note: You must finish all assignment templates (Chapters 5, 6, and 7) before you are able to complete your assignment.