COMPANY: Nordstrom
Use the audited financial statements and notes as your primary source documents. Use only your class materials and the annual reports of your companies. Do not share work with anyone or any platform outside of your group. Show your work for any calculations. Be sure to check each others work and proofread.
9. Refer to the notes to the financial statements. What inventory cost flow method does each company use (e.g. LIFO, FIFO, Weighted Average)? Why do you think the companies chose this method? (6 points)
10. Calculate inventory turnover and average number of days to sell inventory for both companies for the most recent year. Comment on the results. (10 points)
11. Who are the independent auditors for each company? What type of opinion did the auditors issue in the most recent year? Who is responsible for preparing the companies financial statements? (6 points)
12. How much did each company report on the balance sheet for Accounts Receivable in the most recent year? How much for Allowance for Doubtful Accounts? Comment on the relationship between A/R and the allowance. (6 points)
13.LEAVE BLANK
14. Do you think a $100,000 misstatement on the balance sheet of the larger company would be considered material? Why or why not? (4 points)
15. For one of your companies, locate the note defining cash and cash equivalents. Summarize it here. (4 point)
16. Calculate accounts receivable turnover and average days to collect accounts receivable for both companies for the most recent year. Comment on each companys ability to collect cash. (10 points)
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