B203-051 Corporate Financial
Statements Project Part 1:
DUE DATE: TUESDAY, APRIL 2
You will be working with this
company for both part 1 and part 2 of this project. Pick a company you are interested in, that is
listed on a US stock exchange, and for which financial statements are available
for the last 3 years.
Step 1: State name and ticker
symbol of the company you have chosen.
Step 2: Write a short statement
(1 paragraph) describing the company and why you chose it.
Step 3: Obtain a copy of the
financial statements for the year ended December 31, 2012. This should include income statements for the
years ended December 31, 2012, 2011, and 2010.
You can get this either from the company website or from sec.gov
Step 4: Translate the income
statement for the year ended December 31, 2012 from absorption costing to
variable costing. You will need to
state, on a line item by line item basis, why you are identifying that cost as
a variable, fixed, or mixed cost. If you select mixed cost, you will need to
support your allocation based on information you gained about the company
online, in the financial statements or accompanying materials.
Set revenues to equal 100% and
calculate what percentage each cost is for the years ended December 31, 2012,
2011 and 2010. Revisit your initial
decisions about variable costs â€“ if a line item did not vary by more than 10%,
it probably is a variable cost.
Alternatively, if a line item stayed relatively constant by dollar
value, and did not fluctuate more than 10%, it is most likely a fixed cost.
Provide a copy of the income statement
for your company and place the letter F for fixed, V for variable, and M for
mixed by each cost. Also include the
percentages you calculated. Describe your rationale for your choices on a
Step 5: Prepare a variable
costing income statement.
Step 6: Calculate break-even for the company.
Step 7: Calculate margin of safety in dollars