Annual Report Research
For this assignment (see Chapter 8, page, 439: TIF 8-3 Real-world annual report), you should select a public company that interests you and is a business that has accounts receivable. Obtain the company’s most recent annual report on the companies 10K filings. The 10K filings is a company’s annual required filing with the Securities and Exchange Commission (SEC). It includes the company’s financial statements and accompanying notes. The Form 10-K can be obtained either (a) from the investor relations section of the company’s website or (b) by using the company search feature of the SEC’s website
Analyze L Brands
Obj. 8 L Brands, Inc. (LB) sells women’s clothing and personal health care products through specialty retail stores including Victoria’s Secret and Bath & Body Works stores. L Brands reported the following (in millions) for two recent years:
Year 2 Year 1
Sales $12,154 $11,454
Accounts receivable:
Beginning of year 252 244
End of year 261 252
Determine the accounts receivable turnover for Year 1 and Year 2. Round all calculations to one decimal place.
Compute the number of days’ sales in receivables for Year 1 and Year 2. Use 365 days and round all calculations to one decimal place.
What conclusions can be drawn from these analyses regarding L Brands’ efficiency in collecting receivables?
Financial Accounting-Chapter 8
Review the Balance sheet of your company contained in the SEC 10-K report. You will be copying the Balance Sheet in part three of this assignment.
Using the data from the company SEC website, notes to financial statements, and the Income Statement answer the following questions.
Type COMPANY NAME
Define Accounts Receivable
Define allowance for uncollectible accounts
Define allowance for doubtful accounts
Define bad debt expense
1. Based on the information in the company’s most recent annual report, determine each of the following:
Accounts Receivable
What amount of accounts receivable did the company report at the end of each year reported?
Allowance for Uncollectible Accounts
How many occurrences of the word Allowance for Uncollectible Accounts were in the SEC Annual Report?
What is the balance in the company’s Allowance for Uncollectible Accounts or similar wording at the end of the years reported? If you cannot find, did they use different terminology? Explain how you found your answer if wording was not exact. Search notes to the financial statement or search the entire 10K for words that are similar to help you determine Allowance for Uncollectible Accounts. Your company may not use that exact terminology. Example: loss on sales.
Bad Debt Expense
How many occurrences of the word Bad Debt Expense or similar wording were in the SEC Annual Report?
How much bad debt expense did the company report for the most recent year? If you cannot find, did they use different terminology? Explain how you found your answer if wording was not exact. Search notes to the financial statement or search the entire 10K for words that are similar to help you determine Allowance for Uncollectible Accounts. You company may not use that exact terminology. Example: loss on sales
D. Percentage of total current assets is accounts receivable.
What is the formula to compute the percentage of total current assets is accounts receivable?
What percentage of Total current assets is accounts receivable at the end of each year presented? Has this percentage increased, decreased, or remained the same during this period? SHOW YOUR WORK!
2. Using the information presented in the company’s annual report, compute the company’s accounts receivable turnover ratio and number of days’ sales in receivables at the end of each of the years reported?
Accounts Receivable turnover ratio
What is the formula for Accounts Receivable turnover ratio?
What does accounts receivable turnover ratio mean?
What is the Accounts Receivable turnover ratio at the end of the years reported? SHOW YOUR WORK! Formula included in Chapter 8. Reading the notes to the financial statement explain why the ratio is different from year to year.
Number of days’ sales in receivables
What is the formula for number of days’ sales in receivable?
Why would you need to know the number of days’ sales is in receivables?
What is the number of days’ sales in receivables at the end of the years presented? SHOW YOUR WORK!
3. Based on this information, has the company’s management of accounts receivable improved? Briefly explain your answer, make sure you read the notes to the financial statements to document your answer. Briefly explain your answer.
How does accounts receivable effect this company and it’s investors?
What has affected accounts receivable ?
Note: Provide evidence from notes to financial statement. A research paper is to prove your data!!!! Do not include your opinion!!!
4. Include a copy of the company’s balance sheet and income statement from Chapter 5. Find the balance sheet, highlight the income statement, right click copy. In the word document paste Balance sheet, then in the word menu click on the layout tab and click auto fit to contents, that is so the balance sheet fits correctly on the page. This is important for me to verify your data.
5. Include work cited links
All your answers should be presented in a Word document (can include tables or graphs) and submitted in the submit box for this assignment. Please remember to check your spelling and grammar.
