ACCT 212 Project 2: Financial Statement Analysis- Pier 1 Imports, Inc.
Description:
Using the financial statements for Pier 1 Imports, Inc. located in Appendix B of your Textbook, you will calculate Vertical and Horizontal analysis and the financial ratios listed below for the year ended in 2006. A written analysis is also required and should be prepared in Word.
Due Date:
The project is due by the end of Week 7.
Grade Weight: (75 points)
The financial statement analysis project will count for 7.5% of your overall course grade. The Worksheets contained in this Workbook will aid in completing Requirements 1 and 2 for submission.
Requirements:
1. Complete the Excel Spreadsheet in this Workbook labeled Horizontal & Vertical. Calculate the Horizontal & Vertical Analysis of Pier 1 Imports, Inc.
2. Complete the Excel Spreadsheet in this Workbook labeled Ratios. Show your computations and the formulas for the Ratios listed below.
3. In Word, write a minimum of two and a maximum of three pages to evaluate Pier 1 Imports, Inc. for a) Liquidity, b) Solvency, and c) Profitability. In your two to three-page written analysis, be sure to compare Pier 1 Imports, Inc. results to the Industry Average ratios that have been provided. Be sure to state how d) an investor might judge Pier 1 Imports, Inc. As well as how e) a creditor might judge Pier 1 Imports, Inc. In other words, if you were an investor, would you invest in Pier 1 Imports, Inc.? If you were a creditor, would you loan money to Pier 1 Imports, Inc.? The report should be organized into sections with appropriate headings to make it clear that you have addressed each of the questions and topics. Be sure to support your analysis (judgments) with the numbers/data that you presented in your worksheets. Please upload your two files (one in Word and one in Excel) in the Drop box by the end of Week 7.
Financial Ratio Calculations*
A. Liquidity Ratio
1. Current ratio
2. Acid-test ratio
3. Inventory turnover
4. Accounts Receivable turnover
5. Average Collection Period (Days’ sales in receivables)
B. Solvency Ratios
1. Debt ratio
2. Times-interest-earned ratio
C. Profitability Ratios
1. Gross Profit Rate
2. Rate of return on net sales (Profit Margin rate)
3. Rate of return on total assets
4. Rate of return on common stockholders’ equity
5. Earnings per share of common stock
6. Price/earnings ratio
7. Dividend Yield
8. Book value per share of common stock
Description:
Using the financial statements for Pier 1 Imports, Inc. located in Appendix B of your Textbook, you will calculate Vertical and Horizontal analysis and the financial ratios listed below for the year ended in 2006. A written analysis is also required and should be prepared in Word.
Due Date:
The project is due by the end of Week 7.
Grade Weight: (75 points)
The financial statement analysis project will count for 7.5% of your overall course grade. The Worksheets contained in this Workbook will aid in completing Requirements 1 and 2 for submission.
Requirements:
1. Complete the Excel Spreadsheet in this Workbook labeled Horizontal & Vertical. Calculate the Horizontal & Vertical Analysis of Pier 1 Imports, Inc.
2. Complete the Excel Spreadsheet in this Workbook labeled Ratios. Show your computations and the formulas for the Ratios listed below.
3. In Word, write a minimum of two and a maximum of three pages to evaluate Pier 1 Imports, Inc. for a) Liquidity, b) Solvency, and c) Profitability. In your two to three-page written analysis, be sure to compare Pier 1 Imports, Inc. results to the Industry Average ratios that have been provided. Be sure to state how d) an investor might judge Pier 1 Imports, Inc. As well as how e) a creditor might judge Pier 1 Imports, Inc. In other words, if you were an investor, would you invest in Pier 1 Imports, Inc.? If you were a creditor, would you loan money to Pier 1 Imports, Inc.? The report should be organized into sections with appropriate headings to make it clear that you have addressed each of the questions and topics. Be sure to support your analysis (judgments) with the numbers/data that you presented in your worksheets. Please upload your two files (one in Word and one in Excel) in the Drop box by the end of Week 7.
Financial Ratio Calculations*
A. Liquidity Ratio
1. Current ratio
2. Acid-test ratio
3. Inventory turnover
4. Accounts Receivable turnover
5. Average Collection Period (Days’ sales in receivables)
B. Solvency Ratios
1. Debt ratio
2. Times-interest-earned ratio
C. Profitability Ratios
1. Gross Profit Rate
2. Rate of return on net sales (Profit Margin rate)
3. Rate of return on total assets
4. Rate of return on common stockholders’ equity
5. Earnings per share of common stock
6. Price/earnings ratio
7. Dividend Yield
8. Book value per share of common stock
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