MBA 502A—Dr. Lawrence Financial Statement Analysis Project

Analyze the 2009 and 2008 financial statements of Staples, Inc. The 2009 financial statements can be found by going to either:

For Staples, Inc:

1.  Answer the questions on the following pages.

2.  Perform vertical analysis on the income statements and balance sheet information for fiscal periods 2009 and 2008. (Hint: The Excel format of the income statement and balance sheet can be downloaded from the Investor Information section of the Staples website. Select SEC Filings. Scroll back to March 2010 to find the 10K report. Select the Excel format.)

3.  Perform horizontal analysis on the income statements and balance sheet information to show the dollar and percentage change between fiscal periods 2009 and 2008. Hint: The Excel format of the income statement and balance sheet can be downloaded from the Investor Information section of the Staples website. Select SEC Filings. Scroll back to March 2010 to find the 10K report. Select the Excel format.)

4.  Compute a selection of financial ratios relevant for evaluating Staples’ LIQUIDITY, SOLVENCY, PROFITABILITY and MARKET INDICATORS for fiscal 2009 and 2008. For some of the ratios you may need to access fiscal 2007 balance sheet numbers which can be found on the 2008 Annual Report. (Historical stock price information for the fiscal year ends can be found on the Staples website under Investor Information.) Show calculations.

5.  Write a report (maximum of 2 1½-spaced typed pages using good grammar and spelling) summarizing your findings in parts 2, 3 and 4. Attach computations for parts 2, 3 and 4.

â Submit your solutions to all five parts. Please use a maximum of two files (one for the Excel work and one for the Word work.).

List the major sections of information included in the annual report.

List the names of all of the financial statements presented by the company.

Inventory valuation method & cost flow assumptions______

Depreciation method used ______

From the Income Statements:

What are the THREE sources of income/revenues in 2009?

What are the FOUR categories of operating expenses reported (include cost of goods sold)?

From the Statements of Shareholders’ Equity:

What were the reported causes of changes in Total Stockholder’s Equity in 2009?

Which of the above affected Comprehensive Income in 2009?

From the Balance Sheets:

How much of Staples’ 2009 fiscal year end assets were financed by creditors?

How much of Staples’ 2009 fiscal year end assets were financed by internally generated funds?

What are the two components of Contributed Capital? Briefly explain each.

From the Statements of Cash Flows:

Is Staples generating cash from operating activities? Investing activities? Financing activities? Briefly explain.

Significant 2008 Event:

What event took place in 2008 that materially affected Staples’ financial statements?


Information for Ratio Analysis:

Identify the amounts reported for each of the items below.

Fiscal 2009 Fiscal 2008 Fiscal 2007

SALES ______

COST OF GOODS SOLD (& Occupancy Costs) ______

GROSS PROFIT ______

EARNINGS BEFORE INTEREST EXPENSE

& INCOME TAXES ______

INTEREST EXPENSE ______

NET INCOME (Attributed to Staples Inc.) ______

EARNINGS PER SHARE (Basic) ______

QUICK ASSETS ______

CURRENT ASSETS ______

ACCOUNTS RECEIVABLE, NET ______

INVENTORY ______

FIXED ASSETS (Property & Equipment), NET ______

TOTAL ASSETS ______

CURRENT LIABILITIES ______

LONG-TERM LIABILITIES ______

TOTAL LIABILITIES ______

TOTAL STAPLES, INC. STOCKHOLDERS

EQUITY ______

CASH DIVIDEND PER SHARE ______

STOCK PRICE PER SHARE (Yearend) ______

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