Ol501 Final Project

OL 501 Final Project Worksheets

Worksheet A

Due: Sunday of Module Two

1. Download the 2013 10-K Annual Report for JCPenney (JCP) either directly through the Assignment Guidelines and Rubrics folder in Blackboard or through the EDGAR website, and access the 2013 Annual Report for the corporation by entering the letters JCP (for JCPenney) in the Fast Search box on the top right of the webpage. Download the Annual Report on your computer for easy reference throughout the course, or bookmark the EDGAR site. Note that other reports (8-Ks, 10Qs, Correspondence) are also available through the EDGAR website.

1. Answer the following questions about the company based on the information in the 2013 Annual Report and on the internet.

1. What is the official name of the corporation?

1. Where is the location of the corporate headquarters?

1. What stock exchange is the company traded on/a member of?

1. What are the inclusive dates of the company’s fiscal year?

1. What is/are the primary product(s) and/or service(s) of the corporation? This can be viewed under Item 1. Business of the Annual Report.

1. What are the business risk factors as identified in Item 1A. Risk Factors?

Worksheet B

Due: Sunday of Module Three

1. Over the last couple of modules, you have been introduced to concepts concerning the world of business, economies, management, and organizational structures. The purpose of this worksheet is to help you learn more about the leadership of JCPenney, view the locations of retail stores, examine the influence that economic conditions and operational performances have had on JCPenney, and tie together its view on corporate governance. Refer to pages 5, 14-15, 44 and 51 of JCPenney’s 2013 Annual Report and answer the questions below about the management properties, management structure of JCPenney, code of ethics, and executive compensation.

1. To begin, take a look at the leadership of JCPenney. What are the names and ages of the CEO and CFO of the corporation? What qualifies the CEO and CFO for their current positions (bios)? What is the compensation of the CEO?

1. Next, we move to reviewing the location of operations of JCPenney throughout the United States, Alaska, and Puerto Rico. According to Item 2: Properties on pages 14–16 of the Annual Report, how many stores are operating as of February 1, 2013? At the bottom of page 7, what strategic initiative was announced?

1. Lastly, on page 15 of the Annual Report, what information is provided about the supply chain network?

Worksheet C

Due: Sunday of Module Six

This is the first of four worksheets that helps you to transition from theoretical aspects of business foundations to the financial foundation of business. Initially it may feel like you are traveling in uncharted territory. Fear not, as each of the Worksheets C, D, E, and F builds off the others. This is the introductory aspect of consolidated financial statements. Here, you will identify the different financial statements, what information each financial statement provides management, investors, and whoever is reviewing the statement, and insight on why this information is essential for making decisions internally within a firm and whether or not external parties may want to invest. Answer the following questions:

1. How can management information, such as financial statements, help management and investors make more informed decisions? Are there any risks associated with the compilation and analysis of information, for example, accuracy or relevance? How can such risks be minimized?

1. Review Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 22–23 of the Annual Report. How does this information help to provide a summary of the financial situation of JCPenney?

1. Initially, reviewing the information in question 2 may have felt strange because of connecting Management’s Discussion about the Financial Conditions and Operations. Learning where the information comes from and how that information can be reviewed is the next part of this worksheet, and more in-depth, yet approachable, analysis will occur in future worksheets. For this question, refer to page 56 of the Annual Report, Notes to Consolidated Financial Statement, Item 1. Basis of Presentation and Consolidation and the Use of Estimates and Assumptions sections. What are the main points in these sections?

1. Lastly, refer to page 49 of the Annual Report. You will notice that this is the Index to Consolidated Financial Statements. Review this page. Identify what page the following consolidated statements are located on, and enter the page number—you will want to save this information, as it will help you to quickly locate the information you need in future worksheets. You only need to review the Index and list the page number of the following statements:

1. Consolidated Statement of Operations
2. Consolidated Statement of Comprehensive Income/(Loss)
3. Consolidated Balance Sheet
4. Consolidated Statement of Stockholder’s Equity
5. Consolidated Statement of Cash Flow

Worksheet D

Due: Sunday of Module Seven

Building upon Worksheet C, you will be researching, reviewing, and providing insight on financial and accounting statements. Before actually reviewing these financial and accounting statements, it is paramount to know what these statements are about, how they are created, and why they are important. Here, you are building your own foundation of financial and accounting statements. This will serve you significantly in worksheets to come in future modules. Address the following questions:

1. What is the purpose of the Balance Sheet? What information is included within the Balance Sheet? Why is this information important to management and investors?

1. What is the purpose of the Cash Flows statement? What information is included within the Cash Flows statement? Why is this information important to management and investors?

1. What is the purpose of the Income Statement? What information is included within the Income Statement? Why is this information important to management and investors?

1. What is the purpose of the Statement of Stockholders’ Equity? What information is included within the Statement of Stockholders’ Equity? Why is this information important to management and investors?

1. Lastly, refer back to the page numbers that you identified in Worksheet C from the Index to the Consolidated Financial Statements on page 56 of the Annual Report. Copy and paste those page numbers into this section. This is to ensure that you know exactly where to locate those statements, as you will be reviewing those statements in your next worksheet. If you are having trouble locating those pages, let your instructor know.

Worksheet E

Due: Sunday of Module Eight

1. Find the 2013 Income Statement. Create a chart in Excel using the sample format below to summarize the revenue in dollars and percent of growth year over year for the past three years (from 2010–2012), and then answer the questions that follow.

1. Did revenue grow over the three years (from 2010–2012)? Indicate any years when either revenue or the rate of growth declined year over year.

1. Create a similar chart as above for profitability. Indicate where profits grew or declined year over year. Indicate any year(s) where the rate of growth declined year over year.

1. Create a chart for expenses, including the major categories of expense.
   Indicate where the following expense categories grew or declined year over year. Indicate where the rate of increase or decline changed, year over year:

1. Wages
2. Benefits
3. Cost of goods sold
4. Facilities
5. Marketing and sales
6. Operations

1. Locate the balance sheet. Create a chart of assets, liabilities, and owners’ equity for 2011 and 2012. Calculate the percent of growth or decline in each area from 2011 to 2012.

1. Taking assets and liabilities plus equity into account, what three accounts changed the most in the last year?

1. Was there any change in stockholders’ equity from 2011 to 2012?
   Describe how the change came about.

1. Locate the Cash Flow Statement in the annual report and answer the following questions:

1. Between Operating, Investing, and Financing cash flows, rate the sources of cash in terms of significance (1st=largest, 3rd=smallest).

1. What is the most significant change in cash for this company in the 3 years from2010 to 2012?

Worksheet F

Due: Sunday of Module Nine

1. Refer to the Annual Report and the summaries created for Worksheet E. Create a chart summarizing the following factors for the past three years. Answer the following questions:

1. Comparing revenues, profits, and expenses, list the factors driving year-over-year changes (e.g., increase in sales, decline in sales, disproportionate rise/reduction in facilities costs, disproportionate increase/reduction in cost of goods sold, one-time charges or events).

1. Have operating expenses been managed in proportion to growth or declines in revenue over the past five years?

1. Review the management statement(s) for each of the three major financial statements in the Annual Report. List three reasons provided by the firm--either one-time or continuing—that explain the performance of the business in the most recent three years.

1. Review the Supporting Schedules in the Annual Report. Calculate the following financial ratios for 2012:

1. Liquidity ratio
2. Debt ratio
3. Earnings per share

1. Review pages 17–23 in JCPenney’s report. Review the Market for Registrant’s Common Equity, Five-Year Total Stockholder Return Comparison, Five Year Financial Summary, Five Year Operations Summary, and Adjusted Operating Income/(Loss). Considering your review of the key financial statements and the accompanying management statements in the Annual Report, summarize the two or three main issues facing the company and the areas of management focus you recommend for the company in the short term.