Gulf University for Science and Technology ACCT 500- Financial and Managerial Accounting Project Fall 2013-2014
Question;Gulf University for Science and Technology;ACCT 500- Financial and Managerial Accounting;Project;Fall 2013-2014;(Work in;groups of fives)- Deadline for;submission 10 December 2013;Select one company listed on the Kuwait Stock Exchange (exclude banks, insurance, real estate;financial services and investment instrument sectors) and obtain the most recent English copy if it?s annual report;(2012 Annual report containing 2011 comparative figures) to;shareholders (you should find the annual report under Investor Relations on the;company?s website).;You are required to work ingroups;of 5.Please email me names of group members and;your selected company before29 October 2013.;Letter to Stockholders;Your annual report should contain a letter (or;two) to the shareholders from one (or two) key officers of the company. Read it;(them), and answer the following questions (for each one).;1. Who wrote the letter? What is that;person?s position in the company?;2. In one hundred words or less, explain;the basic message in the letter.;3. What is the basic pattern for letters;of this type? How well does the letter fit the mold?;Other material;Your annual report most likely contains;several pages of material between the Stockholders Letter and the financial;sections, or possibly even before the Stockholders Letter.;4. Provide a description (one hundred;fifty words or less) of this material and the message it communicates. Does it;impress you?;Financial Highlights;5. Does the company present any;financial highlights in the annual report to shareholders?;6. If so, what items is the company;highlighting this year?;7. Do the highlighted items show the;company in a positive, mixed or negative light? Explain.;8. What items are not included in the;financial highlights that you think should have been included in the company?s;list of highlighted items?;Explain your answer. [Hint: answer this;question after you have completed the rest of the project.];Fiscal Year;9. The fiscal year for the company;extends from when to when? Where did you locate this information?;10. Explain why the company has chosen;this particular time period for its fiscal year.;Balance Sheet;11. For which dates/years does the;company report a balance sheet?;12. Using totals for each category;(total assets, total liabilities, total Share Holders? Equity), what is the;balance sheet equation for the most recent year?;13. What three assets are largest in;amount on the most recent balance sheet?;14. Does the make-up of the assets seem;consistent with what you expected to see for this type of company? Explain.;15. What three liabilities are largest;in amount on the most recent balance sheet?;16. Which is larger in amount for the;most recent year, contributed capital or retained earnings?;17. Convert the balance sheet for each;year into common size format (vertical analysis) and present neatly in columns.;18. What is the percentage of current;assets to total assets for each year?;19. What is the percentage of current;assets to current liabilities for each year? What does this ratio tell you?;Compute the net working capital?;20. What is the percentage of total debt;(liabilities) to total assets for each year (this is called the debt;percentage)? Explain;21. Did the debt percentage increase;(ratio of total debt to total asset), decrease or stay the same from the prior;year to the current year? What do these numbers say about the company?;22. What is the percentage of;stockholders equity to total assets for each year? Explain;23. Does the company?s ratio of;stockholders equity to total assets seem consistent with the business risk of;the company? Explain.;24 Compute the quick ratio and explain;it. What do these numbers say about the company?;25. What was the percentage change in;total assets from the prior year to the current year? Be sure to mark your;answer as an increase or decrease.;26. Does the company's common stock have;a par value? If so, how much was the reported par value per share? What was the;market value per share at year end?;27. How many shares of common stock were;issued at the end of each fiscal year?;Income Statement;28. For which dates (or periods of time);does the company report income statements?;29. Using totals for each category (total;revenue, total expense), what is the income statement equation for the most;recent year?;30. What amount of net sales is reported;for each year?;31. What is the percentage change in;sales for each year? Describe the trend in revenues.;32. What amount of net income is;reported for each fiscal year? Compute;the earnings per share and explain it? Compute the return on assets and return;on equity? Explain all ratios.;33. What is the percentage change in net;income for each year? Which is changing faster, sales or net income?;34. What three expenses are largest in;amount on the most recent income statement?;35. Convert the income statement for;each year into common size format and present neatly in columns.;36. Identify significant trends from the;common size income statements.;37. If the company sells products;compute the gross margin and the gross profit margin percentage for each fiscal;year?;38. What was the amount of operating;income for each year? What is the operating profit margin for each year? Describe;the trend in operating income. What was the net profit margin for each fiscal;year? What is the trend in the ratio?;39. Compute;three turnover ratios and explain them;Statement of Cash Flows;40. Using totals for each category, what;is the cash flows equation for the most recent year?;41. Does the company report cash flows;from operating activities using the direct or the indirect method? Describe how;you can tell. Compute the operating cash;flow ratio and explain it? Compute and explain the cash return on assets?;42. Does the ending balance of cash and;cash equivalents agree with the amount reported on the balance sheet?;43. On what statement(s) would you;expect to find information regarding the declaration and payment of dividends?;Did the company declare or pay dividends in any year? If yes, compute the;dividend per share?;44. Compute the cash flow interest coverage ratio and the interest coverage ratio? Which;one, in your opinion, is better, and why?;45. Describe the trend in cash flows;from financing activities?;Statement of Changes in Stockholders;Equity;46. Using amounts from the statement of;changes in stockholders equity, what is the equation for changes in retained;earnings for the most recent year?;Notes to the Financial Statements;47. How many notes to the financial;statements are presented for the most recent year?;48. The first note to the financial;statements lists and describes significant accounting policies.;Identify and summarize two accounting;policies.;49. Choose two of the notes and briefly;summarize them.;Report of Independent Public Accountants;(Auditors);50. What accounting firm audited the;company?s financial statements?;51. What is the auditor firm?s;responsibility with respect to auditing them?;52. What type of opinion did the;independent auditors issue on the financial statements? What does it mean?;53. The auditor firm should have;investigated the internal control system of the company. Please describe what;is communicated in the letter reporting on this investigation. What was the;auditor?s opinion on the internal control system?;What is meant by ?Internal control;systems? What are the components of internal control systems?;Management's Discussion and Analysis;54. Provide a description (200-300;words) of the MD&A.;Corporate Governance and Corporate;Social Responsibility;55- What is corporate governance? What;are the basic elements of corporate governance? In one page, comment on the;corporate governance practices in your company.;56- What does corporate social;responsibility mean? Does your company have a CSR section in their report? Provide;a description (350-500 words) of this material and the message it communicates.;Does it impress you?
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