Create the Financial Highlights, the President’s Letter to the Stockholders , the Management Discussion and Analysis reports.
The following Course Outcome is assessed in this assignment:
AC499-5: Communication: Compose communications required for accounting
professionals.
Instructions Summary:
For this 6–8-page assignment (not including the title page, abstract if included or reference
page), you will create 1) the Financial Highlights, 2) the President’s Letter to the
Stockholders, and 3) the Management Discussion and Analysis reports that would be
contained in a company’s annual report to the shareholders.
Note: The Final Project will be based on the Rainbow Paint Company Financial Statements
and the ratios that you compute as practice. The Rainbow Paint Company data will offer an
opportunity to create a more robust Annual Report to Shareholders.
Companies normally issue these reports to stockholders and other interested parties. These
reports summarize the company’s operating activities for the past year and plans for the
future. There are many variations in the order and form for presenting the major sections of
the annual report. You should conduct independent research to find a variety of corporate
annual reports to use as guides in the preparation of your Unit 9 project.
Each week you will be addressing a different aspect of accounting and the business
planning process. In the final project, you will use the information gained from the weekly
assignments, the “Rainbow Paint Company” Review/Practice data, along with information
obtained through research. These reports will be completed in Microsoft Word; a title page
is required, but a running head is not necessary. An abstract is also not required. However,
references will be required — therefore, it is important that you use a proper title page and
correct reference list formatting. See the APA Template uploaded in Course Documents for
examples of a properly formatted title page and reference list. Review the writing resources
on APA style and formatting available in the Writing Center located in the Academic
Success Center found in the Academic Tools area in your course.
When you review the examples of corporate annual reports that you select during your
independent research, you will see that they can be very long and very complex. However,
your assignment is limited to only 6–8 pages (not including the title page and reference list).
Therefore, you should focus on the three aspects required for the final project. You are
expected to use creativity and ingenuity in developing your final project. As you will see in
the example annual reports you find in your independent research efforts, there is no one
perfect way to prepare corporate annual reports.
However, the following information may help you as you complete your Unit 9 project.
Assignment checklist
• Financial Highlights
• President’s Letter to the Stockholders
• Management Discussion and Analysis
Here are some of the basic criteria that will be used to assess your final project:
•
•
•
•
•
•
Project successfully presents every item in the assignment checklist in every aspect.
The project correctly uses the Rainbow Company Data.
The project exhibits strong higher-order critical thinking and analysis.
Sentences are clear, concise, and direct; tone is appropriate.
Grammatical skills are strong with almost no errors.
Correct use of current APA format
The Unit 4 Assignment is worth 40 Points.
Notes:
1) Some of the ratios do NOT have sufficient data to compute a ratio.
In those ratios, simply type “Insufficient data to Compute”.
The objective is to provide you an opportunity to employ critical thinking.
You need to be able to discern whether or not all elements are present.
2) In the ratios that require an “Average” – assume that the BEGINNING Account Balance = – 0-.
3) Remember, .50% is NOT the same as 50%.
4) Use all transactions that include “Sales on Account” as “Net Credit Sales”.
5) Be sure to include your formulas in the proper cell. If you simply input an answer, feedback may be limi
If you include your computations, additional feedback will be possible when an incorrect answer is given
6) Complete all ratios in all 3 sections – Parts A, B & C. There are 4 ratios in Part A, 2 in Part B, and 3 in P
edback may be limited.
rrect answer is given.
n Part B, and 3 in Part C.
Complete the Following rations for Quixote Consulting used in Unis 2 and 3.
You may use formulas as needed
Formula
(words)
A. Liquidity Ratios
1. Current Ratio
2. Acid Test Ratio
=
Current Ratio = Current Assets /
=
Acid-Text
=
Ratio = Quick Assets / Current Liabilities
=
3. Inventory turnover
Inventory Turnover
=
Ratio = Cost of Goods Sold / Average
= Inventory
4. Accounts Receivable
Receivables
turnover
Turnover
=
= Net Credit Sales / Average Net
= Receivables
B. Solvency Ratios
1. Debt to Total Asset ratioDebt =
to total assets ration = Total debs / Total =
assets
Times
2. Times-interest-earned
interest earned = Income*
ratio Before
=
Interest Expense and Income Tax=Expense (EBIT) / nterest
C. Profitability Ratios
1. Profit Margin
= Profit Margin = Net Income/Net Sales =
2. Asset Turnover
Asset
= Turnover = Net Sales / Average Total Assets
=
3. Return on Assets
Return=on Assets = Net Income / Average Total=Assets
nis 2 and 3.
Calculation
(numbers)
Result
20695/4600
=
4.50
20695/4600
=
4.50
Insufficient data to compute=
times
150/2250
=
0.07 times
2150/31345
=
0.07
%
Insufficient data to compute=
times
10845/13475
=
0.80
%
13475/((31345/2))
=
0.86
%
10845/((31345/2))
=
0.69
%
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Formatting
Title Page
Citation
Outline
