Best Practices for Interpreting Financial Data in Class Assignments

Abstract

Module 2 - Exercise A feedback Here are the figures you should have calculated: Some overall feedback, tips, reminders for the class: Read and follow instructions precisely. I write them for a reason. “create and copy/paste an EXCEL spreadsheet” at the bottom. You should know how to create and use Excel for easy tasks like this…and you should learn how to copy a spreadsheet and present it as a table with a Word document (and not showing the columns and rows)…a very useful skill to have. Some of you made and presented graphs – okay, but not asked for so not really necessary. Always check the date direction (left to right or right to left) it is not always the same for all firms’ reporting Always check your positive/negative signs !! Some of you go these reversed. Unless asked, don’t average a trend to one number over several years. “AVERAGE” is not a trend…it is an average and can hide the trend. A declining trend can have the same average as an increasing trend. Proofread!! Especially with calculations. Check that you got all the data right (some of transposed numbers). Get clear on the difference between create and capture value. When asked to assess a firm’s ability to create value, just do that…don’t ALSO talk about their profitability. Operating Profit – the income statement gives you Operating Income. That’s is what you should have used (generally you should always go with the firm’s statement and use of the term). However, it is also okay if you used just SG&A as operating expenses and calculated your own Operating Income. The firm’s statement below SG&A are things normally found between Operating and Net income. Read instructions – several of you used NET INCOME rather than Operating Income. Read instructions – There is...