Levi’s Strauss Project

P
leas
e fin
d instructions of the Financial Statement Analysis Project
Here link below. The questions in each step will guide you
to collect useful information about the company and analyze those information. You are expected to write down
brief answers to
those questions. Then present your evaluation of the company based on the information that you have gathered and share the key analysis that you used to support your evaluation with your classmates.

You may use the FSAP template for example attached below.

Company name: Levi’s Strauss

Financial Statement Analysis ProjectACCT 61
5
The purpose of this project is to allow you to thoroughly investigate the financial
performance of a US public company.You are required to write
down brief answers to items listed in each part except Part 1.
Part 1:
Choose your company and locate its
202
2 annual report (or 202
1 if 202
2 not available)
.
Please avoid financial services companies, i.e. banks, insurance companies, and real estate
companies (SIC codes 6000).
(You should have this readily available from the Kickstart
project.)
Part 2:
1. Wha
t product does your company sell? Which industry is that? Who are the
competitors of the company?
2. Compare the company’s daily stock returns with one of its competitors and those
of Dow Jones Industrial Average in the past five years and explain the trends
youobserve. You are required to use a graph to support your comments.
3. Obtain one recent analyst report and summarize it. You should address the analyst’s
current assessment of your company, and you should summarize the analyst’s
prognosis for your compa
ny.Part 3:
Find three articles in the financial press describing events that have occurred in the
company and potentially affected its stock performance.
Each article should be at least 500
words, and they should be published within the last three year
s. At least one article must
come from
The Wall Street Journal
and one article must come from
The Financial Times
.Print out the articles and provide a summary of more than 100 words for each of them.
Part 4:
1. Who is the company’s auditor? What is the re
sponsibility of the auditor? What is
the auditor’s opinion?
2. Who is responsible for the preparation of the company’s financial statements?
3. Find out and state the responsibility of the audit committee.
Part 5:
1. Who is the company’s CEO? Who is the company’s CFO? How long have they
been in the company? What do they have to do regarding financial reporting after
the Sarbanes Oxley act of 2002?

2. How much did the CEO of the company make in total compensation? How wa
she/she paid: salary, bonus, stock,
stock options? Repeat the two questions for the
CFO.
3. What is the management’s view on the financial performance of the company?
(Summarize three key items in the management discussion and analysis section.)
Part 6:
1. Prepare a 5
-year trend analysis, using the earliest year as the base year of (1) net
sales, (2) net income, (3) total assets, (4) total liabilities, (5) total stockholders’
equity, and (6) operating cash flows. Comment on the significance of the results.
2. Prepare a vertical analysis for 2022 (or 2021) of net sales based on the income
statement data: cost of goods sold, operating expenses, interest expenses, income
tax expense, other income/expenses, and net income. Comment on the
significance of the results.3. Prepare a vertical analysis for 2022 (or 2021) of total assets based on the balance
sheet data: current assets, plant assets (net), intangible assets, other assets, current
liabilities, long
-term liabilities, other liabilities, preferred stock, common sto
ck,additional paid in capital, retained earnings
, treasury stock, and other equity.
Comment on the significance of the results.4.
Identify a competitor of your company and calculate the following ratios for your
company and its competitor for 202
2 (or 2021), and comment on significant
differences of the two companies in terms of the ratios:
a.
Liquidity ratios: current ratio, quick ratio, receivables turnover, and
inventory turnover.
b.
Profitability ratios: asset turnover, profit margin, return on assets, and
return on common stockholders’ equity, earnings per share, price
-earningsratio, and payout ratio.
c.
Solvency ratios: debt to total assets and times interest earned
5.
Did the company r
eport any discontinued operations on the income statement?
6.
Did the company report any extraordinary items on the income statement?
7.
Did the company report any comprehensive income? Where?
8.
Calculate the company’s free cash flow for 202
2 (or 2021).Part 7:
Evaluate the company’s short
-term (1
-year) and long term (5
-year) financial
performance. Comment on the company’s profitability, liquidity, and solvency.
Do you
recommend the company to potential investors?
Part 8:
Present your evaluation in Part
7. Base your argument on
information you have gathered
in Parts 6 and 7
.

Financial Statement Analysis Project
ACCT 615
The purpose of this project is to allow you to thoroughly investigate the financial
performance of a US public company.
You are required to write down brief answers to items listed in each part except Part 1.
Part 1:
Choose your company and locate its 2022 annual report (or 2021 if 2022 not available).
Please avoid financial services companies, i.e. banks, insurance companies, and real estate
companies (SIC codes 6000). (You should have this readily available from the Kickstart
project.)
Part 2:
1. What product does your company sell? Which industry is that? Who are the
competitors of the company?
2. Compare the company’s daily stock returns with one of its competitors and those
of Dow Jones Industrial Average in the past five years and explain the trends you
observe. You are required to use a graph to support your comments.
3. Obtain one recent analyst report and summarize it. You should address the analyst’s
current assessment of your company, and you should summarize the analyst’s
prognosis for your company.
Part 3:
Find three articles in the financial press describing events that have occurred in the
company and potentially affected its stock performance. Each article should be at least 500
words, and they should be published within the last three years. At least one article must
come from The Wall Street Journal and one article must come from The Financial Times.
Print out the articles and provide a summary of more than 100 words for each of them.
Part 4:
1. Who is the company’s auditor? What is the responsibility of the auditor? What is
the auditor’s opinion?
2. Who is responsible for the preparation of the company’s financial statements?
3. Find out and state the responsibility of the audit committee.
Part 5:
1. Who is the company’s CEO? Who is the company’s CFO? How long have they
been in the company? What do they have to do regarding financial reporting after
the Sarbanes Oxley act of 2002?
1
2. How much did the CEO of the company make in total compensation? How was
he/she paid: salary, bonus, stock, stock options? Repeat the two questions for the
CFO.
3. What is the management’s view on the financial performance of the company?
(Summarize three key items in the management discussion and analysis section.)
Part 6:
1. Prepare a 5-year trend analysis, using the earliest year as the base year of (1) net
sales, (2) net income, (3) total assets, (4) total liabilities, (5) total stockholders’
equity, and (6) operating cash flows. Comment on the significance of the results.
2. Prepare a vertical analysis for 2022 (or 2021) of net sales based on the income
statement data: cost of goods sold, operating expenses, interest expenses, income
tax expense, other income/expenses, and net income. Comment on the
significance of the results.
3. Prepare a vertical analysis for 2022 (or 2021) of total assets based on the balance
sheet data: current assets, plant assets (net), intangible assets, other assets, current
liabilities, long-term liabilities, other liabilities, preferred stock, common stock,
additional paid in capital, retained earnings, treasury stock, and other equity.
Comment on the significance of the results.
4. Identify a competitor of your company and calculate the following ratios for your
company and its competitor for 2022 (or 2021), and comment on significant
differences of the two companies in terms of the ratios:
a. Liquidity ratios: current ratio, quick ratio, receivables turnover, and
inventory turnover.
b. Profitability ratios: asset turnover, profit margin, return on assets, and
return on common stockholders’ equity, earnings per share, price-earnings
ratio, and payout ratio.
c. Solvency ratios: debt to total assets and times interest earned
5. Did the company report any discontinued operations on the income statement?
6. Did the company report any extraordinary items on the income statement?
7. Did the company report any comprehensive income? Where?
8. Calculate the company’s free cash flow for 2022 (or 2021).
Part 7:
Evaluate the company’s short-term (1-year) and long term (5-year) financial
performance. Comment on the company’s profitability, liquidity, and solvency. Do you
recommend the company to potential investors?
Part 8:
Present your evaluation in Part 7. Base your argument on information you have gathered
in Parts 6 and 7.
2
Financial Statement
Analysis
Example
Company:
Year-end:
Hewlett-Packard Co (HPQ)
October 30
Prepared By:
Prepared On:
XYZ
MM/DD/YYYY
Instructions:
Only enter new data on the Cover Page and INPUT sheet.
On the INPUT sheet…
Enter the Company Name in Cell A1.
Enter year-end dates on Line 5.
Enter amounts in Columns B through F.
The OUTPUT sheets will automatiacally recalculate
using the new data from the INPUT sheet.
Contact information:
Please contact me with comments, suggestions,
feedback, and to report an error.
Hope that you enjoy!
Hewlett-Packard Co (HPQ)
INPUT SHEET
Condensed – Balance Sheet
$ in Millions
Current assets
Property, plant, and equipment, net
Goodwill and other intangible assets
Other assets
Total assets
Current liabilities
Long-term liabilities
Total liabilities
Contributed capital
Retained earnings
Treasury stock and other equity
Total equity
Oldest
10/30/2008
$
51,728
10,838
40,297
10,468
113,331
$
$
10/30/2009
$
$
52,939 $
21,450
74,389
14,012
24,971
(41)
38,942 $
$
52,539
11,262
39,709
11,289
114,799
10/30/2010
$
$
43,003 $
31,279
74,282
13,804
29,936
(3,223)
40,517 $
54,184
11,763
46,331
12,225
124,503
10/30/2011
$
$
49,403 $
34,651
84,054
11,569
32,695
(3,815)
40,449 $
51,021
12,292
55,449
10,755
129,517
$
10/30/2008
$
10/30/2009
10/30/2010
$
50,442 $
40,450
90,892
6,837
35,266
(3,478)
38,625 $
46,666
39,666
86,332 $ 113,331.00
6,454
21,521 $ 113,331.00
(5,539)
22,436 $
–
10/30/2011
10/30/2012
$
118,364 $
(89,699)
28,295
17,822
10,473
10,473
(2,144)
8,329
8,329 $
114,552 $
(87,489)
26,686
16,550
10,136
9,415
(1,755)
7,660
7,660 $
126,033 $
(95,852)
29,763
18,284
11,479
(505)
10,974
(2,213)
8,761
8,761 $
127,245 $
(97,418)
29,378
19,701
9,677
(695)
8,982
(1,908)
7,074
7,074 $
120,357
(92,385)
27,510
38,567
(11,057)
(876)
(11,933)
(717)
(12,650)
(12,650)
$
3.34
3.44
4.18
4.34
0.31
$
$
$
$
Condensed – Statement of Cash Flows
$ in Millions
Net cash from operating activities
Net cash from investing activities
Net cash from financing activities
10/30/2008
$
14,591 $
(13,711)
(2,020) $
$
10/30/2009
13,379 $
(3,580)
(6,673)
10/30/2010
11,922 $
(11,359)
(2,913)
10/30/2011
12,639 $
(13,959)
(1,566)
10/30/2012
10,571
(3,453)
(3,860)
Additional data needed for ratio computations
$ in Millions
Inventory
Capital expenditures
Cash dividends paid
10/30/2008
7,879
(2,565)
(796)
10/30/2009
6,128
(3,200)
(766)
10/30/2010
6,466
(3,531)
(771)
10/30/2011
7,490
(3,540)
(844)
3
4
Most Recent
$ 114,799.00
$ 124,503.00
$ 129,517.00
$ 108,766.00
$ 114,799.00
$ 124,503.00
$ 129,517.00
$ 108,768.00
$
$
$
$
50,637
11,954
35,584
10,591
108,766
Condensed – Income Statement
$ in Millions
Revenue
Cost of goods sold
Gross profit
Operating expenses
Operating Income
Non-operating revenues and expenses
Income before income taxes
Provision for income tax
Income from continuing operations
Nonrecurring items
Net income
Earnings per share (diluted)
2
10/30/2012 Check figures
10/30/2012
6,317
(3,089)
(1,015)
–
–
–
(2.00)
Hewlett-Packard Co (HPQ)
BALANCE SHEET — OUTPUT
Condensed – Balance Sheet
$ in Millions
Current assets
Property, plant, and equipment, net
Goodwill and other intangible assets
Other assets
Total assets
Current liabilities
Long-term liabilities
Total liabilities
Contributed capital
Retained earnings
Treasury stock and other equity
Total equity
10/30/2008
$
51,728
10,838
40,297
10,468
113,331
52,939
21,450
74,389
$
$
10/30/2009
$
$
$
14,012
24,971
(41)
38,942 $
$
52,539
11,262
39,709
11,289
114,799
43,003
31,279
74,282
10/30/2010
$
$
$
13,804
29,936
(3,223)
40,517 $
54,184
11,763
46,331
12,225
124,503
49,403
34,651
84,054
10/30/2011
$
$
$
11,569
32,695
(3,815)
40,449 $
51,021
12,292
55,449
10,755
129,517
50,442
40,450
90,892
10/30/2012
$
$
$
6,837
35,266
(3,478)
38,625 $
50,637
11,954
35,584
10,591
108,766
46,666
39,666
86,332
6,454
21,521
(5,539)
22,436
Common-Sized – Condensed Balance Sheet
10/30/2008
Current assets
Property, plant, and equipment, net
Goodwill and other intangible assets
Other assets
Total assets
Current liabilities
Long-term liabilities
Total liabilities
Contributed capital
Retained earnings
Treasury stock and other equity
Total equity
10/30/2009
10/30/2010
10/30/2011
10/30/2012
46%
10%
36%
9%
100%
47%
19%
66%
46%
10%
35%
10%
100%
37%
27%
65%
44%
9%
37%
10%
100%
40%
28%
68%
39%
9%
43%
8%
100%
39%
31%
70%
47%
11%
33%
10%
100%
43%
36%
79%
12%
22%
0%
34%
12%
26%
-3%
35%
9%
26%
-3%
32%
5%
27%
-3%
30%
6%
20%
-5%
21%
Trend Analysis – Condensed Balance Sheet
Current assets
Property, plant, and equipment, net
Goodwill and other intangible assets
Other assets
Total assets
Current liabilities
Long-term liabilities
Total liabilities
Contributed capital
Retained earnings
Treasury stock and other equity
Total equity
10/30/2008
10/30/2009
10/30/2010
10/30/2011
10/30/2012
100
100
100
100
100
100
100
100
102
104
99
108
101
81
146
100
105
109
115
117
110
93
162
113
99
113
138
103
114
95
189
122
98
110
88
101
96
88
185
116
100
100
100
100
99
120
7,861
104
83
131
9,305
104
49
141
8,483
99
46
86
13,510
58
Check figures
100%
100%
100%
100%
100%
100%
100%
100%
Debt to Assets
ratio
Current ratio
90.00%
1.40
79.37%
1.22
1.20
80.00%
1.10
1.09
70.00%
1.01
0.98
65.64%
64.71%
Oldest
2
67.51%
70.18%
1.00
60.00%
0.80
50.00%
40.00%
0.60
30.00%
0.40
20.00%
0.20
10.00%
0.00%
Oldest
2
3
4
Most Recent
3
4
Most Recent
Hewlett-Packard Co (HPQ)
INCOME STATEMENT — OUTPUT
Condensed – Income Statement
$ in Millions
Revenue
Cost of goods sold
Gross profit
Operating expenses
Operating Income
Non-operating revenues and expenses
Income before income taxes
Provision for income tax
Income from continuing operations
Nonrecurring items
Net income
Earnings per share (diluted)
10/30/2008
$
10/30/2009
10/30/2010
10/30/2011
10/30/2012
$
118,364 $
(89,699)
28,295
17,822
10,473
10,473
(2,144)
8,329
8,329 $
114,552 $
(87,489)
26,686
16,550
10,136
9,415
(1,755)
7,660
7,660 $
126,033 $
(95,852)
29,763
18,284
11,479
(505)
10,974
(2,213)
8,761
8,761 $
127,245 $
(97,418)
29,378
19,701
9,677
(695)
8,982
(1,908)
7,074
7,074 $
120,357
(92,385)
27,510
38,567
(11,057)
(876)
(11,933)
(717)
(12,650)
(12,650)
$
3.34
3.44
4.18
4.34
0.31
$
$
$
$
Common-Sized Income Statement
10/30/2008
Revenue
Cost of goods sold
Gross profit
Operating expenses
Operating Income
Non-operating revenues and expenses
Income before income taxes
Provision for income tax
Income from continuing operations
Nonrecurring items
Net income
100%
-76%
24%
15%
9%
0%
9%
-2%
7%
0%
7%
10/30/2009
100%
-76%
23%
14%
9%
0%
8%
-2%
7%
0%
7%
10/30/2010
100%
-76%
24%
15%
9%
0%
9%
-2%
7%
0%
7%
10/30/2011
100%
-77%
23%
15%
8%
-1%
7%
-1%
6%
0%
6%
10/30/2012
100%
-77%
23%
32%
-9%
-1%
-10%
-1%
-11%
0%
-11%
Trend Analysis – Income Statement
Revenue
Cost of goods sold
Gross profit
Operating expenses
Operating Income
Non-operating revenues and expenses
Income before income taxes
Provision for income tax
Income from continuing operations
Nonrecurring items
Net income
Earnings per share (diluted)
10/30/2008
10/30/2009
10/30/2010
10/30/2011
100
100
100
100
100
97
98
94
93
97
106
107
105
103
110
108
109
104
111
92
10/30/2012
100
100
100
#DIV/0!
100
90
82
92
#DIV/0!
92
105
103
105
#DIV/0!
105
86
89
85
#DIV/0!
85
102
103
97
216
(106)
#DIV/0!
(114)
33
(152)
#DIV/0!
(152)
100
103
125
130
9
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
ROE Analysis
Ratio
ROS
x Asset
Turnover
Type
Profitability
Asset Mgmt
Solvency
Formula
Net Income /
Revenue
Revenue /
Total
Assets
Total Assets /
Total Equity
-10.51%
5.56%
6.95%
6.69%
7.04%
10/30/2012
10/30/2011
10/30/2010
10/30/2009
10/30/2008
1.11
0.98
1.01
1.00
1.04
x Leverage
Ratio
= ROA
-11.63%
5.46%
7.04%
6.67%
7.35%
7.04%
7.00%
6.69%
1.12
1.10
1.08
1.06
1.04
1.02
1.00
0.98
0.96
0.94
0.92
5.56%
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
Oldest
2
3
4
Most Recent
1.11
1.04
1.00
7.35%
6.67%
7.04%
Oldest
2
3
5.46%
0.00%
4
Most Recent
-5.00%
-10.00%
-15.00%
2
3
4
Most Recent
Return on equity
5.00%
Oldest
1.01
0.98
Return on assets
10.00%
-56.38%
18.31%
21.66%
18.91%
21.39%
Asset turnover
6.95%
-11.63%
30.00%
20.00%
10.00%
0.00%
-10.00%
-20.00%
-30.00%
-40.00%
-50.00%
-60.00%
-70.00%
Check figures
Reported
ROE
4.85
3.35
3.08
2.83
2.91
Return on sales
8.00%
= ROE
21.39%
18.91%
21.66%
18.31%
Oldest
2
3
4
Most Recent
-56.38%
-56.38%
18.31%
21.66%
18.91%
21.39%
Calculate
differ d ROE
(0.12) -56.383%
0.05 18.315%
0.07 21.659%
0.07 18.906%
0.07 21.388%
Hewlett-Packard Co (HPQ)
Growth / Inventory — OUTPUT
Year-to-Year Growth Rates
10/30/2008
Total assets
Trend analysis
Year-to year growth rate
Revenue
Trend analysis
Year-to year growth rate
Net income
Trend analysis
Year-to year growth rate
Net cash from operating activities
Trend analysis
Year-to year growth rate
10/30/2009
$
113,331
100
$
$
118,364
100
$
$
8,329
100
$
$
14,591
100
$
114,799
101
1.30%
114,552
97
-3.22%
7,660
92
-8.03%
13,379
92
-8.31%
10/30/2010
$
124,503
110
8.45%
126,033
106
10.02%
8,761
105
14.37%
11,922
82
-10.89%
$
$
$
10/30/2011
10/30/2012
$
$
$
$
$
129,517
114
4.03%
127,245
108
0.96%
7,074
85
-19.26%
12,639
87
6.01%
$
$
$
108,766
96
-16.02%
120,357
102
-5.41%
(12,650)
(152)
-278.82%
10,571
72
-16.36%
Inventory ratios
10/30/2008
10/30/2009
10/30/2010
10/30/2011
10/30/2012
11.38
32.06
14.28
25.57
14.82
24.62
13.01
28.06
14.62
24.96
Inventory turnover
Days in Inventory
Inventory turnover
16.00
14.28
14.82
12.00
14.62
13.01
14.00
11.38
10.00
8.00
6.00
4.00
2.00
Oldest
2
3
4
Most Recent
Hewlett-Packard Co (HPQ)
CASH FLOWS — OUTPUT
Condensed – Statement of Cash Flows
$ in Millions
Net cash from operating activities
10/30/2008
$
14,591
10/30/2009
$
13,379
10/30/2010
$
11,922
10/30/2011
$
12,639
10/30/2012
$
10,571
Net cash from investing activities
(13,711)
(3,580)
(11,359)
(13,959)
(3,453)
Net cash from financing activities
(2,020)
(6,673)
(2,913)
(1,566)
(3,860)
Trend Analysis – Statement of Cash Flows
10/30/2008
Net cash from operating activities
100
Net cash from investing activities
100
Net cash from financing activities
100
10/30/2009
92
10/30/2010
10/30/2011
10/30/2012
82
87
72
26
83
102
25
330
144
78
191
Hewlett-Packard Co (HPQ)
RATIO — OUTPUT
Ratio Analysis
10/30/2008
10/30/2009
10/30/2010
10/30/2011
10/30/2012
Profitability Ratios
Return on sales (ROS)
7.04%
6.69%
6.95%
5.56%
-10.51%
Return on assets (ROA)
7.35%
6.67%
7.04%
5.46%
-11.63%
Return on equity (ROE)
21.39%
18.91%
21.66%
18.31%
-56.38%
Asset turnover
1.04
1.00
1.01
0.98
1.11
Gross profit rate
23.91%
23.30%
23.62%
23.09%
22.86%
1.75
1.75
1.36
1.79
(0.84)
0.98
1.22
1.10
1.01
1.09
(1,211) $
9,536
Inventory turnover
11.38
14.28
14.82
13.01
14.62
Inventory days
32.06
25.57
24.62
28.06
24.96
65.64%
64.71%
67.51%
70.18%
79.37%
Quality of Earnings ratio
Liquidity Ratios
Current ratio
Working capital
$
$
4,781
$
579
$
3,971
Solvency Ratios (Risk)
Debt to Assets ratio
Free cash flow
$
11,230
$
9,413
$
7,620
$
8,255
$
6,467
RATIO
PROFITABILTIY Ratios
Return on sales (ROS) [Net profit margin]
Return on assets (ROA)
Return on equity (ROE)
Asset turnover (A T/O)
Gross profit rate (GP%)
Quality of Earnings ratio
LIQUIDIDTY Ratios
Working capital
Current ratio
Inventory turnover
Days in Inventory
SOLVENCY Ratios (Risk)
Debt to assets ratio
Free cash flow
DUPONT Analysis of ROE
DuPont Analysis of ROE
*Financial leverage
CONCEPTUAL FORMULAS
= Net income / Sales Revenue
= Net income / Total assets
= Net income / Stockholders’ equity
= Sales Revenue / Total assets
= Gross profit / Sales Revenue
= Net cash provided by operating activities (NCOA) / Net income
= Current assets – Current liabilities
= Current assets / Current liabilities
= Cost of goods sold / Inventory
= 365 days / Inventory turnover
sk)
= Total liabilities / Total assets
= Net cash provided by operating activities (NCOA) – Capital
expenditures – Dividends
OE
= ROS x Asset turnover = ROA x *Financial leverage = ROE
= Total assets / Total equity