Week Two Overview

Assignment Due Date Format Grading Percent 3 3 7 6

Cash Flows Financial Statement Analysis Week Two Quiz Financial Statement Case

Day 3 (1st post) Day 3 (1st post) Day 6 Day 7

Discussion Forum Discussion Forum Quiz Problems and Cases

Readings Read the following chapters in Accounting: a. Chapter 16: The Statement of Cash Flows b. Chapter 17: Financial Statement Analysis Study and review the Summary Problem, the Quick Check, and Demo Doc problems at the end of each chapter. Note the answers are provided. For exercises, problems, and cases there are check figures in Appendix D. Work as many problems as possible to understand the material. This is usually the best way to learn accounting. Discussions To participate in the following Discussion Forums, go to this week's Discussion link in the left navigation:

1. Cash Flows
From Chapter 16, complete E16-16 and E16-29 and post the answers to the discussion board by day 3. Remember to complete all parts of the problems and report back to the group the results of your analysis. Do not forget to show the necessary steps and explain how you attained that outcome. Respond to at least two of your classmates postings.

2. Financial Statement Analysis

From Chapter 17, complete E17-18 and P17-25A and post the answers to the discussion board by day 3. Respond to at least two of your classmates postings.

Assignments To complete this assignment, go to this week's Assignment link in the left navigation: Financial Statement Case Complete the Chapter 17 Financial Statement Case (page 895) and submit to your instructor.

Amazon.coms financial statement in appendix a at the end of the book reveal some interesting relationships. Answer the following questions about amazon.com: 1) What is the most unusual about the balance sheet 2) Compute trend percentages for net sales and net income. use 2003 as the base year. which trend percentage looks strange? explain. 3) compute inventory turnover for 2005 and 2004. The inventory balance at December 31, 2003 was 294 million do the trend of net income from 2004 to 2005 and the change in the rate of inventory turnover tell the same story or a different story? explain. Req. 1 Stockholders equity is very low. Req. 2 Trend percentages: Net sales.. Net income.. 2005 161 10257 2004 131 16800 2003 100 100

The trend percentage for net income looks strange because the base-year net income amount for 2003 was so low. Req. 3 Inventory turnover: Cost of sales Average inventory = = 2005 $6,451 ($566 + $480) / 2 12.3 times 2004 $5,319 ($480 + $294) / 2 13.7 times

The trend of net income from 2004 to 2005 and the change in the rate of inventory turnover tell the same story. Both measures deteriorated in 2005.