MBA 502A—Dr. Lawrence                                                   Financial Statement Analysis Project           

Each student is to analyze the 2011 and 2010 financial statements of Staples, Inc.  The 2011 financial statements can be found by going to either:

1)     www.sec.govªSearch for Company Filings ªCompany or fund name…ªCompany or Fund Name… ª next to company name type, Staples ªselect Find Companies ªselect Staples, Inc. (CIK# 0000791519),select the 10Kinteractive documents;  (To find the 2010 financial statements, scroll farther down to find the 2010 10K.) The “View Excel Document” link is helpful for parts 2 and 3 below.

2)       www.staples.com ªscroll down to the Corporate Informationsection, select Investor Information ªselectAnnual Reports–Staples along the right side; select the 2011 Annual Report.   (The 2010 Annual Report is also available.)

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 2011 and 2010. (Hint:  The Excel format of the income statement and balance sheet can be downloaded from the SEC website by selecting “View Excel Documents” in the interactive data area.)

3.           Perform horizontal analysis on the income statements and balance sheet information to show the dollar and percentage change between fiscal periods 2011 and 2010.  (Hint:  The Excel format of the income statement and balance sheet can be downloaded from the SEC website by selecting “View Excel Documents” in the interactive data area.)

4.           Compute a selection of financial ratios relevant for evaluating Staples’ LIQUIDITY, SOLVENCY, PROFITABILITY and MARKET INDICATORS for fiscal 2011 and 2010. For some of the ratios you may need to access fiscal 2009 balance sheet numbers which can be found on the 2010 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 to the Financial Statement Analysis Project dropbox, your solutions to all five parts. Please use a maximum of two files (one for the Excel work and one for the Word work.) Clearly label your submissions with your name.

Official Company name _________________________________________________________

State of Incorporation___________________________________________________________

City and State of Headquarters___________________________________________________

Stock Exchange Securities & Where Listed_________________________________________

Ticker Symbol(s)______   Primary SIC Code_______  Fiscal Year End  __________________

Independent Auditor (City)_______________________________________________________

Description of Product or Service_________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

_____________________________________________________________________________

Company Size (Fiscal 2011):  Total Assets _______________   Total Sales_______________

Who is the Chairperson of the Board of Directors ___________________________________

Who is the Chief Executive Officer?_______________________________________________

Who is the President & Chief Operating Officer _____________________________________

Who is the Chief Financial Officer ________________________________________________

Who is the Corporate Controller __________________________________________________

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 TWO sources of income/revenues in 2011?

What are the THREE categories of operating expenses reported for fiscal 2011 (include cost of goods sold)?

From the Statements of Stockholders’ Equity:

What were the reported causes of changes in Total Stockholder’s Equity in 2011?

Which of the above affected Accumulated Comprehensive Income (Loss) in 2011?

From the Balance Sheets:

How much of Staples’ 2011 fiscal year end assets were financed by creditors?

How much of Staples’ 2011 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.

According to the notes to the consolidated financial statements:

What are Staples’ THREE reportable business segments?

What major acquisitions took place in 2010?

Information for Ratio Analysis:

Identify the amounts reported for each of the items below. 

                                                                               Fiscal 2011            Fiscal 2010           Fiscal 2009

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 (Year-end)      ___________        ___________