ACCT Project

Sherwin-Williams
Global leaders in paints & coatings.
Company Background
Sherwin Williams products include
primers, paints, coatings, & floorcoverings, and
related products to professional, industrial,
commercial, and retail customers primarily in
North and South America and Europe. They are
the global leaders in paints and coatings.
By the end of 2020, Sherwin Williams had
operations in over 120 countries.
Balance Sheet
Total Assets = $20,401,600,000
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●
●
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Uses LIFO inventory cost method
Intangible assets totalling at
$4,471,200,000
Natural resources include energy supplies
(including oil and natural gas) and raw
materials (including titanium dioxide and
petrochemical feedstock sources, such as
propylene and ethylene)
Uses straight line depreciation method
Total Liabilities = $16,790,800,000
●
N
Total Stockholders’ Equity = $3,610,800,000
The balance sheet for this company is balanced, which tells me that the company has a well-kept record
of every transaction, recording every transaction in at least two places.
Income Statement
Net Sales/Revenue = $18,361,700,000
COGS = $9,679,100,000
Gross Profit/Margin = $8,682,600,000
Gross Profit/Margin Ratio = $8,682,600,000 / $18,361,700,000 = .47
Net Income/Loss = $2,030,400,000
The information gathered from the income statement tells me that this company makes avgross profit of
.47 cents for every dollar gained in sales.
Statement of Cash Flows
Net cash from Operating Activities = $3,408,600,000
Net cash from Investing Activities = ($322,400,000)
Net cash from Financing Activities = ($3,020,100,000)
Effect of exchange rate changes on cash = ($1,300,000)
Net Change in Cash = $64,800,000
The positive net change in cash tells me that this company has a gain of funds over time after paying debts. A
positive, negative, negative on a statement of cash flows tells me that this company is able to fully fund their
operations, they are investing their money back in themselves (like in capital expenditures and other
investments), and that the company is paying out capital (like retirement, paying off long-term debt, and/or making
dividend payments to stockholders).
Financial Ratios
ROI = $2,030,400,000 / (($20,401,600,000 + $20,496,200,000) / 2) = 9.93%
ROE = $2,030,400,000 / (($3,610,800,000 + $4,123,300,000) / 2) = 52.51%
Working Capital = $4,591,400,000 – $4,594,400,000 = -$3,000,000
Current Ratio = $4,591,400,000 / $4,594,400,000 = 1.00 (.9993)
EPS = $2,030,400,000 / 91,942,623 = 22.08 or $2,030,400,000 / 90,425,861 = 22.45
The normal range for an ROI for a manufacturing company is between 8% – 12% and Sherwin williams ROI is within that
range. Its ROE tells me that this company has a high return, meaning that for every $1 of shareholder’s equity the company
generated about 52.51 cents ($0.5251) in profit. However, this high ROE could also indicate a higher portion of debt. The
working capital tells me that the company may have incurred an increase in accounts payable as a result of a large
purchase of products and services from its vendors. The current ratio tells me that the company can just about pay off its
current debts. The EPS in 2018 was 11.92, in 2019 was 16.79, and in 2020 it was 22.45. This shows me that the company’s
EPS has a positive consistent growth, which means that this company is steadily growing a stronger profit growth.
Notes to the Financial Statements
● This company had a lead pigment and lead-based paint litigations in several
counties and entities.
● After 20 years of litigations, Sherwin Williams and two other defendants reach
an agreement principle with the plaintiffs to resolve the litigation. The
agreement provides that, in full and final satisfaction of any and all claims of
the plaintiffs, the Company and the other two defendants collectively shall pay
a total of $305.0 million.
● An example of a lawsuit involving Sherwin Williams is the plaintiff in Thomas
v. Lead industries Associations, et al., resulting Wisconsin Court of Appeals
affirmed the final judgment in favor of the Company and other defendants.
Other Information in Annual Report
● In the opinion of the independent registered Public Accounting firm, the
consolidated financial statements presented fairly and conformed with U.S.
GAAP.
● They mentioned that there were long and short term accruals related of
environmental related activities, and the biggest one was located in Gibbsboro,
New Jersey. They disclosed that they had a difficult time auditing this because it
required complex judgment due to challenges of identities of future remedies for
reasonably estimable and probable losses.
● In my opinion, I think that the investors should invest in this company. This
company presents its financial statements in accordance with U.S. GAAP, they
pay off their long-term debts, they have a positive net cash flow able to cover their
cost by almost 1.5, and they pay their shareholders’ dividends and their
employees retirement and pensions.
ACCT 223
Class Project
Each student should select a corporation that has the following requirements:
•
•
•
Publicly traded company (must trade stock on the NYSE, etc.)
Manufacturing company (must produce a product, not a service)
Headquartered in the U.S. (not an internationally-based company)
Using the company’s most recent audited financial statements and annual report along
with everything you have learned in this course, you will present the company to the
class, which will be full of “potential investors” thinking about possibly investing in this
company, which we know nothing about. Introduce your company to us, highlighting
important financial information, and providing us with as much info as possible to help
us decide if this is a company we would want to invest in or not, and why. You must
substantiate your recommendation with factual and accurate data.
Your presentation should be approximately 5-6 minutes long, and PowerPoint should be
used. Make it informative, but also interesting. Points will be awarded on: 1) required
financial info presented (verbally, along with supporting financial documentation), 2)
your recommendation to potential investors supported by valid data, and 3) creativity.
1. Minimum required information to be covered/discussed:
a. Company background
i. Products
ii. Recent activities in the news
b. Balance Sheet
i. Total Assets
1. Inventory – LIFO or FIFO method (or other)
2. Fixed Assets, Intangible Assets, Natural Resources
3. Depreciation method used (straight line or other)
ii. Total Liabilities
Contingent Liabilities
1. Bonds Payable (interest rate, maturity value, etc)
2. Notes Payable/long-term debt (interest rate, collateral, due
date, etc)
iii. Total Equity
1. Common or Preferred Stock (par value, dividends paid, etc)
2. Shares authorized, issued, outstanding
3. Treasury Stock
4. Retained earnings
c. Income Statement
i. Net sales/revenue
ii. Cost of Goods sold
iii. Gross profit/margin
iv. Gross profit/margin ratio
v. Net income (loss)
d. Statement of Cash Flows
i. Operating activities
ii. Investing activities
iii. Financing activities
iv. Net change in cash
e. Financial ratios
i. ROI
ii. ROE
iii. Working capital
iv. Current ratio
v. EPS
vi. Other ratios if relevant
f. Notes to the Financial Statements – anything interesting from these?
i. Contingent liabilities? Potential lawsuits?
ii. Recent mergers or acquisitions? New product lines?
g. Other information in Annual Report – anything interesting from this?
i. Chairman, Board of Directors
ii. Auditors report – audit firm used
h. Investor’s summary – would you invest in this company, why or why not?
You must substantiate your recommendation with valid supporting data!
2. Be sure to include a paper copy of the balance sheet, income statement,
statement of cash flows, statement of changes in stockholders’ equity, and any
pages from the annual report and notes that were used in the presentation
above. Also show your calculations for any ratios used. If I can’t verify it in
writing, you will not receive credit for it.
3. It can be entertaining, creative, and fun, but it still needs to be professional.
Let me know if any questions at all!
CLASS PROJECT TESLA
BY: BEN BLOCKER
COMPANY BACKGROUND
• Products
• Solar Panels
• Battery Backups
• Electric Cars
• Recent activities in the news
• In October a jury ruled that Tesla failed to make sure an employee was not racially harassed
• https://www.tesla.com/blog/regarding-todays-jury-verdict
• Tesla is planning to make a model 2 without a steering wheel to be released 2023
BALANCE SHEET – TOTAL ASSETS
• Inventory – LIFO
• Fixed Assets – Mechanical + Computer Equipment, Tools, Land, Vehicles, Construction
• Intangible Assets – Listed are developed technology, customer relations, trade name,
contracts and leases, and research and development
• Natural Resources – None listed
• Depreciation method used – Straight line
BALANCE SHEET – TOTAL LIABILITIES
• Contingent Liabilities – Accrued Liabilities, Debt, Deferred Revenue, p.76
• Solar Bonds – 3.6-5.8%, $55 mil remaining unpaid principal, $4 mil current
• 2021 Notes Payable – $419 million at 1.25% interest due March 2021
• Long-term debt – Total of $8.462 long with $10.569 unpaid principal, interest rates from
0.6-7.9%, maturity from Jan 2021 to Sep 2049
BALANCE SHEET – TOTAL EQUITY
• Common or preferred stock (par value, dividends paid, etc) – Par values of $0.001 with
no dividends paid and none planned
• Shares authorized, issued, outstanding • Common Stock – 2 billion, 960 million, 905 million
• Preferred stock – 100 million, 0, 0
• Treasury Stock – No treasury stock
• Retained earnings – Ending accumulated deficit was -$5.399 billion
INCOME STATEMENT
• Net Sales/Revenue – $31.536 billion
• Cost of Goods Sold – $24.906 billion
• Gross profit/margin – $6.63 billion
• Gross profit/margin ratio – 6.63 / 31.536 = 21.02%
• Net income (loss) – $862 million
STATEMENT OF CASH FLOWS
• Net from Operating Activities – $5.943 billion
• Net used in Investing Activities – $3.132
• Net from Financing Activities – $9.973 billion
• Net change up in cash – $13.118 billion
FINANCIAL RATIOS
• ROI – Net Income/Total Assets – 862/52,148 * 100 = 1.65%
• ROE – Net Income/Shareholder Equity – 862/22,225 * 100 = 3.88%
• Working capital – Current Assets-Current Liabilities – 26,717-14,248 = $12,469
• Current ratio – Current Assets/Current Liabilities = 1.88 ratio
• EPS – Net Income/Outstanding Shares = 862/905 = $0.95 EPS
NOTES TO FINANCIAL STATEMENTS
• Lawsuits – 25+ lawsuits from stockholders since Sep 2016 from business acquisition,
vehicle production, director comp, and related to potentially going private
• New product lines – Currently there are several vehicles in development such as Semi,
Cybertruck, Roadster, and Model 2, but they may be delayed due to supply chain issues
OTHER INFORMATION IN ANNUAL REPORT
• CEO of the company is Elon Musk
• Auditors report – Report the company “presented fairly, and maintained effective
internal control”. The company used was PricewaterhouseCoopers LLP and they have
been used since 2005.
INVESTOR’S SUMMARY
• Would you invest in this company?
• I already am invested in Tesla
• More reason to buy renewables
• More interested buyers
• Which means more money in the company
• Retained Earnings may be negative from investing but moving up
NVIDIA 2021
Financial Report
Project
BY: (NAME)
About NVIDIA
NVIDIA is a multinational technology company that is headquartered
 Products:
 Graphics cards
 Developer kits
 Adapters
News:
• Expect to have product shortages through 2022
• Stock has surged 113 percent in last 6 months
Balance Sheet – Assets
Total Assets: $28,791,000,000
Current Assets: $18,199,000,000
Fixed Assets: $3,662,000,000
Intangible Assets: $6,930,000,000
• Inventory method – FIFO
• Depreciation method – Straight line
Balance Sheet – Liabilities
• Total Liabilities: $11,898,000,000
• Total Current Liabilities: $3,925,000,000
“The preparation of financial statements in
conformity with U.S. GAAP requires management
to make estimates and assumptions that affect the
reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities.”
Balance Sheet – Equity
• Retained earnings: $18,908,000,000
•
•
•
•
Preferred stock – 2 million shares authorized, $0.001 par value
Common stock – 2 billion shares authorized, $0.001 par value
Paid 395,000,000 in cash dividends
260 million ($7.08 billion) in treasury shares
Income Statement
• Revenue: $16,675,000,000
• C.O.R.: $6,279,000,000
•
Gross Profit: $10,396,000,000
• Gross Profit Ratio:
$10,396,000,000 / $6,279,000,000
= 165.57%
• Net income: $4,332,000,000
Statement of Cash Flows
• Net cash by Operating activities: $5,822,000,000
• Net cash by investing activities: ($19,675,000,000)
• Net cash by financing activities: $3,804,000,000
• Net change in cash: ($10,049,000,000)
Financial Ratios

annual ROI

Net investment income (7.31B + 5.51B + 4.53B + 4.02B)/investments &
debt (32.09B + 24.7B + 22.86B + 21.3B) = 21.16%

Annual ROE

Net income(8.21B + 7.08B + 5.33B + 4.33B)/ shareholders equity(23.8B
+ 21.15B + 18.77B + 16.89B) = 30.97%

EPS – $3.25 / share for the year ending in OCT 31, 2021

Working Capital

Current Assets ($18,199,000,000) – Current Liabilities ($3,925,000,000)
= $14,274,000,000
Notes

Acquired Mellanox Technologies for 7.13 Billion
 Supplier of high-performance interconnect products
 Will help with optimizing data center workload

Pending acquisition of Arm Limited
 Arm is a semiconductor and software design company
 Transaction is valued at 40 billion USD
 NVIDIA will acquire Arm limited and 10 billion in cash from Softbank, Softbank
will receive 44.3 million shares of common stock. Further payments are
contingent on the achievement on financial targets by Arm in the next fiscal
year
 Deal is expected to close in Q1 of calendar year 2022
Recommendation
 Stock Boasts high liquidity
 Outperforming major competitors (intel and
amd)
 Possible of acquisition of Arm limited would
indicate high potential continued growth
 NVIDIA is performing the best it ever has,
jumping over $60 per share in the last month
 NVIDIA is a no brainer tech stock pick