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Components of financial statements in most recent annual report

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Using the company Cardinal Health, analyze the components of the financial statements (in the most recent annual report):

- Calculate the analytical information in the table
- Discuss the possible findings
- Discuss how the organization performed

In 2 pages, MS Word Doc, APA style with citations
Analytical Procedures for Revenue (Sales) and Accounts Receivable Accounts

(2-column table to complete):
Analytical Procedures Possible Misstatement Detected
? Compare gross profit percentage (by product line if data are available) with previous years
? Compare actual revenue to budgeted revenue
? Analysis of ratio of sales to income with in first quarter to total ratio of sales to income at the end of the year
Accounts Receivable
? Comparison of receivables turnover and days outstanding in current year to previous year
? Comparison of bad-debt expense as a percentage of revenue in current to previous year
? Comparison of allowance of uncollectible accounts as a percentage of accounts receivable in current year to previous year

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Solution Summary

The components of financial statement sin the most recent annual report is examined.

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Analytical Procedure for Accounts Receivable & Revenue

Analytical Procedure for Revenues
The gross profit margin of the company has decline by 1% in the year 2009 in comparison of the previous year. The decrease in the gross profit was because of the foreign exchange risk and increase in the customer in the Healthcare Supply Chain Service Segment. But the data depict an increase in the revenue by 9% from the previous year but at the same time the gross margin for the company is decreasing. The gross profit for the year 2007 was 5.99%, which was increased by 6.13% in the year 2008. But it caused a decrease in the gross margin in the year 2009 in which it is 5.55% only (Cardinal Health Inc, 2009). The possible misstatement in the gross margin computation is the change in the inventory valuation method. The change in the inventory valuation method causes a change in the overall cost of the business.

The revenue for the current year is more than the revenue from expected. The total increase in the revenue for year 2009 ...

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