Project

Your Course Project

Financial Statement Analysis Project — A Comparative Analysis of Kohl’s Corporation and J.C. Penney Corporation

Below is the link for the financial statements for Kohl’s Corporation for the 2010 fiscal year ending January 29, 2011. Under the term Groupings Filter, change the term All Forms to Annual Filings using the drop-down arrow and press Search.

You should then scroll down and select the 10k dated 3/18/2011 and choose to download in Word or PDF format.

http://www.kohlscorporation.com/InvestorRelations/sec-filings.htm

Below is the link for the financial statements for J.C. Penney Corporation for the 2010 fiscal year ending January 29, 2011. Under the term Groupings Filter, change the term All Forms to Annual Filings using the drop-down arrow and press Search.

You should then scroll down and select the 10k dated 3/29/2011 and choose to download in Word format.

http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-sec

A sample Project template is available for download in Doc Sharing. The sample project compares the ratio performance of Tootsie Roll and Hershey using the 2009 financial statements of Tootsie Roll and Hershey provided in Appendix A and Appendix B of your textbook.

Description

This course contains a course project where you will be required to submit one draft of the Project at the end of Week 5 and the final completed Project at the end of Week 7. Using the financial statements for Kohl’s Corporation and J.C. Penney Corporation, respectively, you will calculate and compare the financial ratios listed further down this document for the fiscal year ending 2010 and prepare your comments about the liquidity, solvency and profitability of the two companies based on your ratio calculations. The entire project will be graded by the instructor at the end of the final submission in week 7 and one grade will be assigned for the entire project.

Overall Requirements

For the Final Submission:

Your final Excel workbook submission should contain the following. You cannot use any other software but Excel to complete this Project.

1)     A completed worksheet title page tab which is really a cover sheet with your name, the course, the date, your instructor’s name and the title for the project.

2)     A completed worksheet profiles tab which contains a one paragraph description regarding each company with information about their history, what products they sell, where they are located, etc.

3)     All 18 ratios for each company with the supporting calculations and commentary on your worksheet ratio tab. Supporting calculations must be shown either as a formula or as text typed into a different cell. The ratios are listed further down this document. Your comments for each ratio should include more than just a definition of the ratio. You should focus on interpreting each ratio number for each company and support your comments with the numbers found in the ratios.

4)     The Summary and Conclusions worksheet tab which is an overall comparison of how each company compares in terms of the major category of ratios (Liquidity, Profitability, and Solvency). A nice way to conclude is to state which company you think is the better investment and why.

5)     The Bibliography worksheet tab must contain at least your textbook as a reference. Any other information you use to profile the companies should also be cited as a reference.

Required Ratios for Final Project Submission

1)     Earnings per Share

2)     Current Ratio

3)     Gross Profit Rate

4)     Profit Margin Ratio

5)     Inventory Turnover Ratio

6)     Days in Inventory

7)     Receivables Turnover Ratio

8)     Average Collection Period

9)     Asset Turnover Ratio

10)  Return on Assets Ratio

11)  Debt to Total Assets Ratio

12)  Times Interest Earned Ratio

13)  Payout ratio

14)  Return on Common Stockholders’ Equity Ratio

15)  Free Cash Flow

16)  Current Cash Debt Coverage Ratio

17)  Cash Debt Coverage Ratio

18)  Price/Earnings Ratio [For the purpose of this ratio, for both Kohl’s and J.C. Penney, use the market price per share on January 31, 2011]

The Excel files uploaded in the dropboxes should not include any unnecessary numbers or information (such as previous years’ ratios, ratios that were not specifically asked for in the project, etc.).

Please upload your final submission to the Week 7 Dropbox by the Sunday ending Week 7.

For the Draft:

Create an Excel spreadsheet or use the Project template to show your computations for the first 12 ratios listed above. The more you can complete regarding the other requirements the closer you will be to completion when Week 7 arrives. Supporting calculations must be shown either as a formula or as text typed into a different cell. If you plan on creating your own spreadsheet, please follow the format provided in the Tootsie Roll and Hershey template file.

Please upload your draft submission to the Week 5 Dropbox by the Sunday ending Week 5.

Other Helpful information:

If you feel uncomfortable with Excel, you can find many helpful references on Excel by performing a Google search.

The Appendix to Chapter 13 contains ratio calculations and comparison comments related to Kellogg and General Mills so you will likely find this information helpful.

BigCharts.com provides historical stock quotes.

Either APA or MLA style can be used to complete the references on your Bibliography tab. There is a tutorial for APA and MLA style within the syllabus.

Grade Information

The entire project will be graded by the instructor at the end of the final submission in week 7 and one grade will be assigned for the entire project. The project will count for 18% of your overall course grade.

Category

Points

%

Description

Documentation
& Formatting

9

5%

The report will be submitted in the form of an Excel Workbook, with each page (worksheet) of the workbook named appropriately. Please do not use any other software (such as MS Works or Lotus) to complete the project. A quality report will include a title worksheet tab, a worksheet tab for the profile of the two companies, a worksheet tab for the ratio calculations and comments, a worksheet tab for the Summary and Conclusion, proper citations if applicable, and a bibliography worksheet tab for the references.

Organization
& Cohesiveness

9

5%

A quality report will include the content  described above in the documentation and formatting section. The ratios should be listed in the same order in which they appear in the project information above.

Editing

18

10%

A quality report will be free of any spelling, punctuation, or grammatical errors. Sentences and paragraphs will be clear, concise, and factually correct. Ratios will be expressed as numbers or percentages, depending on what is appropriate, as is shown in the textbook. Note that not all ratios are shown as percentages. Two decimal places is sufficient for each of the ratios.

Content

144

80%

A quality report will have correct ratio calculations and accurate supporting commentary. Any assumptions, if made, should be spelled out clearly. Supporting calculations must be shown either as a formula or as text typed into a different cell.

Total

180

100%

A quality report will meet or exceed all of the above requirements.

 

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