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Competency Assessment
To receive credit you must complete the Competency Assessment. You may contact your professor if you have any questions.
ID
This Competency Assessment (CA) assesses your level of performance on the specific outcome(s) that are the focus of this course. The CA requires you to demonstrate your knowledge, understanding, and proficiency of the outcome
(s). Be sure to use the other activities in this course prior to attempting the CA. You can attempt the CA an unlimited number of times within the term.
However, the CA must be completed successfully by the end of the term to earn credit.
Be sure to review the Competency Assessment Checklist Rubric in order to understand the criteria on which you will be evaluated.
Instructors will provide feedback on the CA. If you expect to receive feedback, revise, and resubmit this CA near the end of the term, you will need to make your submission no later than 5 days before the end of the term.
Please refer to your syllabus for additional Competency Assessment requirements.
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50 % 1 of 2 topics complete
Assessment
This Competency Assessment assesses the following outcome(s):
MT217M1: Explain how financial managers use financial calculators, Microsoft Excel, and financial statements to measure the financial performance of a business entity.
PC-1.1: Engage in a team setting with professional integrity and respect.
Understanding the classification and definitions of financial statement accounts is a fundamental requirement in assessing business
management. Assessment of financial data provides the quantitative measures allowing managers to use past and present data to make effective decisions.
Directions
In Part 1 of this Assessment, you will define and classify accounts into an Income Statement or Balance Sheet. In Parts 2 and 3 you will
assume the role of a financial manager who has been tasked to report to senior management in an upcoming finance meeting. Senior
management is particularly interested in learning the performance of the company in two particular areas. The first focus of your discussion with management, Part 2 of this Assessment, relates to the markup on Cost of Goods Sold (COGS). The second focus of your discussion
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with management, Part 3 of this Assessment, relates to capital
structure.
Part
To properly measure financial statements managers must know account definitions and classifications. Using the accounts below, define each and classify each as an Income Statement or Balance Sheet account.
1. Cash
2. Notes payable/Short term debt
3. Inventory
4. Property, plant, and equipment
5. Long term note-debt
6. Stockholder’s equity
7. Interest and taxes
8. Sales
9. Cost of Goods Sold
10. Selling and general administrative expenses
11. Gross profit
12. Earnings before interest and taxes
13. Net income
14. Accounts receivable
15. Accounts payable
Before you move on to Part 2 and Part 3 below, you must first
complete the following Excel Spreadsheet. You must complete the Income Statement tab and the Balance Sheet tab. Then, answer the following questions in Part 2 and Part 3 below.
Part 2
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After completing the Income Statement, you should be able to
measure a company’s COGS and its effect on the Gross Profit Margin (GPM). Based on your assessment of the firm’s Income Statement, you are to report to senior management on these key components:
a. What is the markup on COGS?
b. Compare this company’s markup to a COGS Industry Standard of 70%. What is the result?
c. Explain how the difference in this company’s markup and industry markup rates affect profitability, or levels of the GPM?
Part 3
After completing the Balance Sheet in the Excel Spreadsheet
hyperlinked above, you should be able to measure a company’s capital structure. Based on your assessment of the firm’s Balance Sheet, you are to report to senior management on these key
components:
a. What is the nature of this company’s capital structure? Include percentages in your commentary?
b. Compare this capitalization structure percent to an industry standard of 50%. What is the result?
c. To what extent is this company ‘leveraged’?
Minimum Submission Requirements
• This Assessment should be in a separate Microsoft Word
document. Use this template for your Assessment.
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• Respond to the questions in a thorough manner, providing
specific examples of concepts, topics, definitions, and other elements asked for in the questions. Your paper should be highly organized, logical, and focused.
• Your paper must be written in Standard English and
demonstrate exceptional content, organization, style,
grammar, and mechanics.
• Your paper should provide a clearly established and sustained
viewpoint and purpose.
• Your writing should be well ordered, logical and unified, as
well as original and insightful.
• A separate page at the end of your paper should contain a list
of references, in APA format. Use your textbook, the Library,
and/or the Internet for research.
• Be sure to cite both in-text and reference list citations were
appropriate and reference all sources. Your sources and
content should follow proper APA citation style. Review the
APA formatting and citation style found in the Writing Center.
The Writing Center can be found within the Academic Support
Center under Academic Tools in the left navigation of your
course. (It should be in Times New Roman 12-point font,
include correct citations, Standard English with no spelling or
punctuation errors, and correct references at the bottom of the
last page.)
If work submitted for this competency assessment does not meet the minimum submission requirements, it will be returned without being scored.
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