ACCT 212 Individual Learning Project Instructions

This project will allow you the opportunity to explore a company’s annual report and become familiar with the items it contains. Choose a company from Standard & Poor’s Net Advantage whose company’s name begins with the same letter as your last name.

ACCT 212
INDIVIDUAL LEARNING PROJECT INSTRUCTIONS
This project will allow you the opportunity to explore a company’s annual report and
become familiar with the items it contains. Choose a company from Standard & Poor’s
Net Advantage whose company’s name begins with the same letter as your last name.
Locate the most recent annual report, either from the Liberty University library’s
access to Standard & Poor’s website, the EDGAR database (http://www.sec.gov/), or the
company’s website. Once located, open Individual Learning Project Questions document
and add your answers underneath each question. Do not delete the questions. Questions
1–49 must be answered with Microsoft Word. Your answers for these do not need to be
in complete sentences. Questions 50–52 must be answered in Microsoft Excel and your
answers must include formulas. Questions 53–55 must be answered with complete
sentences and justification within the Word document. Both documents (Word and Excel)
must be uploaded into the Assignment link.
To access the Liberty University Library online resources from off campus:
https://www.liberty.edu/library/databases/?l=S
Tips for choosing a company:
· This project will be easier and more meaningful if you select a company that you
have heard of before and one whose basic operations you are familiar with.
· If the company you select is no longer in operation, either because they have been
acquired, been through bankruptcy, etc., it is not an appropriate selection; if you
want to do a company that has been acquired, you may do the project on the new
parent company instead – please clear this with your instructor in advance if the
parent company does not begin with the same letter as your last name.
· Locate the company’s annual report before you begin substantial work on the
project! That way, if you run into an issue mentioned above, you will not need to
start over. The company you choose needs to have issued a 10-K/Annual Report
within the past year.
INDIVIDUAL LEARNING PROJECT QUESTIONS
Name: Lillian Denny
General Information:
1. What is the name of your corporation?
Dell Technologies Inc.
2. Where are the corporate headquarters?
One Dell Way
Round Rock, Tx. 78682
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3. What is the corporation’s fiscal year end?
Dell fiscal calendar is a 52/53 week-year, which ends on the Friday closest
to January 31s.
4. What are the primary products or services of the corporation?
Technology Hardware, Storage and Peripherals.
5. Graph the high and low price of the company’s stock for each quarter of the last
two years. What was the high and what was the low?
6. Who is the company’s transfer agent and where are they located?
American Stock Transfer & Trust (AST)
6201 15th Avenue
Brooklyn,NY 11219
7. Who are your company’s competitors?
Apple, Hewett-Packard, Samsung, Toshiba, Lonovo
Market Information:
8. On which stock exchange is your corporation’s stock traded?
New York Stock Exchange
9. What is the current market price of their stock?
50.80 as of 6/29/2019 At 240pm
10. What is the ticker symbol used to identify your corporation on the stock exchange?
Dell
Internet Information:
11. What is the Internet address of your corporation? Be sure it appears as a hyperlink.
www.delltechnologies.com
12. Is the corporation’s Annual Report online?
Yes
13. Are its financial statements on-line?
Yes
14. Is your company listed on Annualreports.com?
Yes
15. How long is your company’s 10-K report at the Securities and Exchange
Commission website (Edgar Database)?
193 pages from the Feb 1, 2019 end of year filing in Microsoft word Doc.
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Cash Flow and Retained Earnings:
16. List the amount of cash flows from each of the 3 activities: Operating, Investing,
and Financing for the 2 most recent years. What was the increase or decrease in
cash for each of these years?
2018 2019 Increase/decrease
Operateing $6843.0 million $6991.0 million increase
Investing $(2875.0) million 3389.0 million increaase
Financing $403.0 million $(14329.0) million decrease
17. Were there any Non-Cash Investing/Financing Transactions? Describe the type and
amount.
Other Financing Activities: (640.0) million in 2018 and (14890.0)million in 2019
18. What is the dollar difference between accrual net income and Cash provided by
Operations?
Cash provided by operations: $6991 million Net income: $(2310) Dollar
differeance: 9301.0 million
19. What investing activity provided the largest inflow of cash in the current year?
largest cash inflow- $5894.0 million under Marketable & Equity Security.
20. What investing activity used the largest amount of cash in the current year?
$20745.0 million for Total Debt Issued
21. What financing activity provided the largest inflow of cash in the current year?
Largest was from other financing Activities- (2589.0) million
22. What financing activity used the largest amount of cash in the current year?
Repurchase of stock- $(14.549.0) million
23. Does the company have sufficient cash inflows from the appropriate category?
Describe any problems the company many experience with cash flow from your
analysis of the cash flow statement.
Operating income and investment has heled to balance out the negative net income.
More so in 2019 than in 2018.
24. Show the change in Retained Earnings for the 2 most recent years. What was net
income for each year? How much was paid out in dividends each year?
2018 2019
Retained Earnings (6860.0) (21.349.0)
Net income (2849.0) (2310.0)
Dividends (1114.0) (14434.0)
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25. Were the dividends on common stock and/or preferred stock? What was the amount
of each?
Common Stock in 2018-19889.0 million and common stock in 2019- 16114.0
million
26. Did Retained Earnings change for any reasons other than net income or dividends?
Explain
Yes, there was additional purchase of dividends.
27. What classes of stock does your company have?
Common Stock
28. How many shares of each class of stock are authorized, how many are issued, and
how many are outstanding?
In 2018 Common Stock 19889.0 with 769.0 outstanding
In 2019 Common Stock 16114.0 with 719.0 Outstanding
29. Does your company have any treasury stock? How many shares and what dollar
amount?
In 2018- (1440.0) with a dollar amount of- 15.24
In 2019- (63.0) with a dollar amount of- (8.02)
30. What is the par or stated value of each of your company’s stocks?
2018 2019
Book Value/Share 15.24 (8.02)
Tangible Book Value (56995.0) (68741.0)
Tangible Book Value/share (74.06) (95.61)
Footnote Disclosures:
31. How many footnote disclosures does your company have?
2
32. How many significant accounting policies are listed under its Summary of
Significant Accounting Policies?
There have been one significant accounting policies listed in the policy
33. What does it include as Cash and Cash Equivalents?
For multiple class companies, total share counts are primary class equivalent, and
for foreign companies listed as primary ADRs, total share counts are ADR-
equivalent.
34. What method does it use to value Inventory?
FIFO is the method applied for the purpose of valuing Inventory.
35. What method(s) does it use to depreciate its assets?
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The depreciation is charged on a straight-line basis where the software and other
long-term assets of the company are depreciated over the useful life of the assets.
36. Does it have any leased assets? If yes, describe them.
None
37. What policies does it have in regard to Foreign Currency Translations?
In order to hedge the foreign exchange risk associated with the company it deploys
derivative instruments for hedging the exposure of fluctuations in the foreign currency
exchange rate and interest rates.
38. Describe any pending lawsuits in which it is involved.
There are currently no pending lawsuits for Dell Technologies Inc.
39. Provide its Earnings per Share for the 2 most recent years?
The earnings per share for the company for the last 2 recent years were as follows:
Earnings Per Share Feb 1, 2019 Feb 2, 2018
Basic EPS ($) 6.01 1.63
Report of the Independent Auditor(s):
40. Who is/are your company’s auditor(s)?
The auditor of the company is PricewaterhouseCoopers LLP
41. Where are they located?
PricewaterhouseCoopers LLP is located in Austin Texas
42. Does the auditor(s) give a qualified opinion, an unqualified opinion, a disclaimer of
opinion, or an adverse opinion? What does that opinion mean? Is it good?
The auditors of the company have given an unqualified opinion whereby all the
financial statements of the company were presented in fair manner from all
respects. The company has maintained all material respect and effective internal
control over financial reporting.
43. What is the auditor’s responsibility in regard to the financial statements?
It is the responsibility of the auditor to assess the financial statement of the
company thereby checking that the company has followed all the accounting rules
and regulations and given all material information in the financial statement of the
company.
44. What is management’s responsibility in regard to the financial statements?
It is the responsibility of the managmenet of the company in providing all the
material informations and disclosures about the various operating, investing and
financial activities undertaken by the company. The infomrations and disclosures
made by the company is then assessed and evaluated by the auditors of the
company whether the same applies with the accounting rules and regulations. If
there is any change in the accounting principle of a company then the same needs to
be reported and disclosed. Changes in Revenue Recognition Policy and Cash
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Management system were some o the key disclosures that were reported in the
financials of the company.
45. What financial statements were included in the auditor’s opinion?
The financial statement of the company including the consolidated statements of
income (loss), comprehensive income (loss), stockholders’ equity (deficit)and cash
flows for each of the three years in the period ended February 1, 2019.
46. Did the auditor believe that the statements were presented fairly?
In the opinion of the auditors of the company the consolidated financial statement
refers to all information presented by the company in a fair manner whereby all
material respective information were included. The accounting information given
by the company were in well line with the generally accepted accounting principles
in the United States of America.
Management’s Report:
47. Who bears the responsibility for the integrity and the objectivity of the financial
statements?
It is the responsibility of the management of the company or the CEO of the
company to specifically check whether the company has complied with legal and
regulatory requirements. The objectivity of the financial statement in rendering
useful financial information of the company are some of the common aspects that
needs to be dealt. Providing financial statement and assuring them about the
integrity of the financial statements are some of the key features.
48. What does management say they are doing to assure the public that the financial
information is reliable?
The management with the help of the auditors audits the financial stamenet of the
company in order to check that all the financial information of the company are in
accordance with the accounting rules and reglautaions.The Generally Accepted
Accounting Principles is the accounting principle which the company adheres for
the purpose of prepairing the financial statement of the company.
49. What is the responsibility of the Audit Committee of the Board of Directors?
The audit committee is a committee of the board of directors whereby they are
responsible for overseeing the financial reporting process, selecting the independent
auditor of the company and receipt of the audit results in both internal and external
means. It is also mandatory that the audit committee should report to the board on a
regularly basis. The audit committee plays a crucial role in various aspects of
responsibilities like the financial reporting, internal control system, various risk
management measures and audit functions. The audit committee is one of the major
operating committee which helps the company in various aspects and the board of
director in assiting the financial reporting and the related disclosures.
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Analysis: (use Excel to complete this section)
50. Provide common-size analysis of your company’s income statement and balance
sheet for the 2 most recent years (must be done using Excel with formulas).
The answers are provided in the excel sheet attached.
51. Provide horizontal analysis of your company’s income statement and balance sheet,
showing the dollar amount and percent of change using the 2 most recent years (you
must use an Excel spreadsheet with formulas).
The answers are provided in the excel sheet attached.
52. Perform ratio analysis on your company using the ratios listed in Exhibit 13.16 on
page 544 of your text (these must be in an Excel spreadsheet, using formulas to
calculate the ratios). You should present them in a similar format as the text: group
by category, list name of ratio, formula in words, and the ratio calculation. Give a
short explanation of your conclusions about your company after each category of
ratios (i.e. How liquid is your company? How efficiently is it using its assets? etc.).
Ratio Analysis is an important assessment tool that is evaluated for the purpose of
assessing the financial statement of the company. There were several ratio’s that
were evaluated for the company including the liquidity aspects, activity or
efficiency ratio and the profitability ratio for the company.
Liquidity Ratio: The liquidity position of the company is not at a suitable stage as
the coverage of current assets in terms of current liabilities of the company is not
adequate. The liquidity ratio for the company in the year 2018 was around 0.38
times and the same has fallen to around 0.32 times.
Activity Ratio:
Inventory Turnover Ratio: The inventory ratio for the company says the amount
of goods sold by the company by converting the inventory of the company. The
ratio for the company in the year 2018 was around 21.85 times and the same has
decreased to around 17.97 times in the year 2019.
Average Days Receivable: The ratio shows the time taken by the company in
collecting the due amount by the company from the debtors of the company. The
average time taken by the company in the year 2018 was around 70 days and the
same was around 63 days in the year 2019.
Profitability Ratio:
Return on Assets: The amount of profitability generated by the company on the
total assets of the company. The ratio also shows the efficiency of the company in
utilizing the total assets of the company. The return on assets of the company for
the period 2018 was around -2.36% and for the period 2019 the same was -1.95%.
The negative return reflects that the management of the company might not be
optimally utilizing the assets of the company.
Return on Equity: The return generated by the company in the form of net
profitability over the total equity of the company shows the return on equity for the
company. The return for equity for the company in the year 2018 was around -
14.71% and for the year 2019 the same was around -13.53%. The ratio reflects that
the managmenet of the company is not creating wealth for the company.
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Conclusions:
53. Are you optimistic or pessimistic regarding the future of your chosen corporation?
Explain.
Business Factors and Macro-Economic Conditions of the company are some of the
key macro-economic factors that affect the operatiosn and performance of the
company. While, analyzing the financial position of the company it was found that
the company did not have a sound financial position whereby the copany reported a
negative return over the total equity and total assets of the company. The liquidity
position of the company has also been degrading in the trend period analysed for
the company. High changes and negative return by the company reflects a
pessimistic future abou the company. It is important the management of the
company undertake various actions and plans in order to develop the sales strategy
and increase the net profitability of the company by cutting the associated cost of
selling the products or services.
54. Would you invest in the stock of the company? Explain.
After analyzing the financial position of the company it was seen that the company
is not performing financially well and the operations of the company has also been
volatile. Thus, it becomes important for the investors to analyze various aspects and
information while analyzing the overall performance and the future performance of
the company.
55. Would you invest in the bonds of the company? Explain.
Investment in the bonds of the company should not be done by the investors as the
company is alsready having a debt in the financials of the company. Increase in the
debt of the company can lead to a high financial risk of the company which would
not only affect the financials of the company but also impact the profitability of the
company. Though, the company has a soun goodwill and wide coverage of both
tangible and intangible assets investment in bonds at this scenario where the
financial performance of the company has been degrading can be a problem.
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Bibliography
Investors.delltechnologies.com. 2019. [online] Available at:
https://investors.delltechnologies.com/static-files/0e939dc9-449f-4eef-abba-
735053ac913c [Accessed 1 Jul. 2019].
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