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Sample Paper - ANNUAL REPORT PROJECT TOYS R US An...

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ANNUAL REPORT PROJECT TOYS “R” US An Undergraduate Term Report Submitted for ACCT220 in Partial Fulfillment of the Requirements of the Degree of Bachelor of Science in Business Administration Studies University of Maryland European Division Distance Education March 2003
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ABSTRACT The purpose of this study was to read and to analyze the annual report of Toys “R” Us. Information was obtained from the companies web page at http://www.shareholder.com/toy/toysrus01/ and the textbook Financial & Managerial Accounting by Needles, Powers and Crosson used in University of Maryland’s course Principles of Accounting. The outline of the project was given on page 60 of the textbook. The analysis includes information about the industry situation and future company plans and examines financial statements and accounting policies. The financial assessment follows option (b): Basic with enhanced liquidity analysis. The interpretation of the results would have been more reliable if the average ratios for the toy retailing industry would have been known. But even without this comparison, it can be said that the liquidity has been questionable and profitability has not been satisfactory at Toys “R” Us during the past two years. - 2 -
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TABLE OF CONTENTS Page ABSTRACT 2 CHAPTER A. INTRODUCTION 4 Company Description 4 B. INDUSTRY SITUATION AND COMPANY PLANS The Industry and Its Outlook 4 Future Plans 4 C. FINANCIAL STATEMENTS The Income Statement 5 The Balance Sheet 6 The Statement of Cash Flows 7 D. ACCOUNTING POLICIES 9 Significant policies 9 Other topics 10 E. FINANCIAL ANALYSIS 11 Liquidity Ratios 11 Profitability Ratios 13 REFERENCES 15 - 3 -
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CHAPTER A - INTRODUCTION Company Description Toys “R” Us is a worldwide retailer of toys with stores in the U.S., Canada, Europe, Asia, and Australia. The home offices of the company are located in Montvale and Paramus, New Jersey. John H. Eyler, Jr. is Chairman and Chief Executive Officer of Toys “R” Us. Ending Date of the latest fiscal year was February 2, 2002. Ernst & Young LLP, New York, are the independent Auditors of the company. According to their statement from March 2002 the financial statements of the company are presented in a fair way in accordance with the generally accepted accounting principles of the United States. According to information from http://quote.morningstar.com/Quote.html?ticker=TOY the most recent price of the company’s stock was $8.17 at the close of the market on March 7, 2003. Toys “R” Us hasn’t distributed any dividends during the past years. CHAPTER B. INDUSTRY SITUATION AND COMPANY PLANS The Industry and Its Outlook In general the toy industry, as with all other industries, is moving along in a time of uncertainty and hesitation. The retail scene is one of the most volatile areas in our industry today. It has been dramatically influenced by the poor state of the world economy and the resulting changing consumer behavior. Even very healthy companies are now most careful in
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Sample Paper - ANNUAL REPORT PROJECT TOYS R US An...

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