ACC 6040 Module 8 Statements and Analysis Project Example

Course	ACC-6040 Fundamentals of Accounting I
Module	Module 8
Paper type	Course project: statement preparation and financial statement analysis
Length	About 771 words, 5 pages
Format	APA 7 student paper
School	Thomas Edison State University
Program	Master of Science in Accounting
Updated	October 2026

Free sample paper for ACC 6040 Module 8

Two Rinks and a Third Under Way: Year-End Statements for Garden State Ice Rinks and an Analysis of a Listed Peer

Student Name

Master of Science in Accounting, Thomas Edison State University

ACC-6040: Fundamentals of Accounting I

Mentor Name

Month Day, Year

What this page is doingThe title reflects the project's two parts: preparing a company's statements from its balances, then reading another company's published figures critically.

Two Rinks and a Third Under Way: Year-End Statements for Garden State Ice Rinks and an Analysis of a Listed Peer

Part 1: Preparing the Statements

The project supplies Garden State's adjusted balances at December 31, 2027, after the entries recorded in the earlier assignments: the receivables allowance, the skate write-down, depreciation on both rinks, amortization of the league naming right, the bond discount and income taxes.

Two items needed evaluation. Costs of the Wayne rink are accumulated in construction in progress and will not be depreciated until the rink opens. And the prepaid Parsippany rent for 2028 is current because it will be used within the year.

Income statement, year ended December 31, 2027	Amount
Net service and concession revenue	$2,128,400
Pro shop sales	64,800
Total revenues	2,193,200
Wages and benefits	800,000
Utilities	255,000
Rent, Parsippany rink	153,000
Depreciation	205,000
Amortization of naming right	18,000
Cost of pro shop sales, including a $300 write-down	41,100
Concession supplies	118,000
Credit card fees	29,500
Bad debt expense	13,020
Insurance	70,000
Repairs and maintenance	42,000
Interest: bank note $54,000 and bonds $55,537	109,537
Total expenses	1,854,157
Income before income taxes	339,043
Income tax expense at 21%	71,199
Net income	$267,844
Classified balance sheet, December 31, 2027	Amount
Cash	$309,700
Accounts receivable, net of $9,820 allowance	174,180
Pro shop inventory	9,300
Concession supplies	4,000
Prepaid rent for 2028	153,000
Total current assets	650,180
Equipment, Morristown, net	960,000
Refrigeration plant, Parsippany, net	635,000
Construction in progress, third rink in Wayne	1,946,835
League naming right, net	72,000
Total assets	$4,264,015
Current liabilities, as listed in Module 6	$191,000
Bank note, long-term portion	720,000
Bonds payable, net of $143,229 unamortized discount	1,856,771
Total liabilities	2,767,771
Stockholders' equity, as presented in Module 7	1,496,244
Total liabilities and stockholders' equity	$4,264,015

What this page is doingCarrying every balance from the earlier assignments into one set of statements that balances is the strongest evidence that each earlier entry was right.

Part 2: Analyzing a Listed Leisure Company

The course's project names a real public company; this sample analyzes a composite, Mid-Atlantic Leisure Corp., a listed operator of skating, climbing and trampoline parks, with figures modeled on companies of its type.

Revenue grew 6 percent, and the company used its assets slightly more efficiently, but profitability fell: net margin dropped from 5.1 to 3.5 percent as labor and utility costs rose faster than prices. The decline in return on assets came from margin, not turnover, which points to costs rather than demand. Liquidity is thin and weakening, with a current ratio below one, common for businesses that collect cash at the gate but owe suppliers and employees, yet still a risk if credit tightens. Solvency worsened as the company borrowed to open new parks, and interest coverage fell to 2.4 times. Operating cash flow of $61 million no longer covers capital spending of $74 million, so free cash flow turned negative and the gap was financed with debt.

Nissim and Penman (2001) show that breaking return on equity into operating profitability and financing effects helps separate how well a business runs from how it is financed. Applied here, Mid-Atlantic's operating returns are falling while its reliance on borrowing rises, a combination that magnifies the effect of any further decline in margins on shareholders.

Measure	2026	2027
Revenue	$412 million	$438 million
Net income	21.0 million	15.3 million
Net profit margin	5.1%	3.5%
Return on assets	4.0%	2.8%
Asset turnover	0.78 times	0.80 times
Current ratio	0.92	0.81
Debt to equity	1.6	2.1
Times interest earned	3.9 times	2.4 times
Operating cash flow	$68 million	$61 million
Capital expenditures	49 million	74 million

What the Numbers Do Not Show

Ratios rely on accounting choices and omit important information. Mid-Atlantic's leases, brand and customer loyalty are partly or wholly absent from its balance sheet, and weather, local competition and park openings drive results in ways a year of statements cannot capture. A complete evaluation would read management's discussion, the notes on debt covenants and the segment information for park-level trends.

Scale also limits the comparison: a two-rink private company cannot borrow at a listed peer's rates or spread overhead as widely, so Garden State's ratios should be read against its own trend as much as against the peer's levels. Dechow (1994) found that the gap between earnings and cash flow widens when working capital swings, which applies to a company building a third rink.

Conclusion

Part 1 shows Garden State in sound condition but newly indebted, with a third rink not yet earning revenue. Part 2 shows a larger peer whose growth has come at the cost of margins, liquidity and coverage. Both cases illustrate the module's lesson: financial statements tell a coherent story only when the income statement, balance sheet and cash flows are read together (Libby et al., 2017).

References

Dechow, P. M. (1994). Accounting earnings and cash flows as measures of firm performance: The role of accounting accruals. Journal of Accounting and Economics, 18(1), 3-42. https://doi.org/10.1016/0165-4101(94)90016-7

Libby, R., Libby, P. A., & Hodge, F. (2017). Financial accounting (9th ed.). McGraw-Hill Education.

Nissim, D., & Penman, S. H. (2001). Ratio analysis and equity valuation: From research to practice. Review of Accounting Studies, 6(1), 109-154. https://doi.org/10.1023/A:1011338221623

What the ACC 6040 Module 8 instructions ask for

The ACC-6040 course project, worth 25 percent of the grade, is a comprehensive problem completed in the course's eighth and final week. The syllabus describes two parts: evaluating transactions and preparing financial statements from provided account balances, then analyzing and evaluating a company's publicly available financial information. Details are posted at the beginning of Module 8, which covers the statement of cash flows and financial statement analysis. This sample prepares statements for the invented rink operator, whose balances carry over from the earlier assignments, and analyzes a composite listed peer; your project will name its own company and supply its own balances. Part 2 typically asks for liquidity, solvency and profitability ratios with interpretation.

Inside the ACC 6040 Module 8 example

Part 1 lists the adjustments already reflected in the balances, then presents a full income statement and a classified balance sheet that balance, with notes on two items that needed evaluation, construction in progress and prepaid rent. Part 2 explains the substitution of a composite company, presents ten measures for two years in a table and interprets profitability, efficiency, liquidity, solvency and cash flow in turn, using a return decomposition from research. A section on what the numbers do not show adds the qualitative judgment analysis requires, and the conclusion ties both parts to reading the statements together. The final recommendation draws on the ratios computed in Part 2. Part 1's statements feed directly into Part 2's ratios, so every figure in the analysis can be traced back to the statements.

ACC 6040 Module 8 rubric: what earns full marks

The course project counts 25 percent of the ACC-6040 grade, the largest single item. Mentors look for statements prepared in proper form with correct classifications and totals that balance, evidence that year-end items were evaluated rather than copied, ratios computed accurately for the right periods and analysis that explains causes, such as margin versus turnover, rather than listing numbers. Recognizing the limits of ratio analysis and pointing to the notes and management's discussion shows maturity. Clear tables and a concise written evaluation make the project easy to assess. Ratios interpreted against the rink's own history and an industry benchmark, rather than listed, earn the analysis credit.

Common ACC 6040 Module 8 mistakes, and how to avoid them

The most common weaknesses in this project are statements that do not balance, current and long-term items mixed together, and an analysis that lists ratios without explaining them. Build the income statement, post its profit to equity and make the balance sheet balance before touching the cash flows. In the analysis, ask what changed and why for each ratio, and connect the ratios to one another. Note what the statements cannot tell you. Classify each balance as current or noncurrent before building the statement. A free first sample of an ACC-6040 final project is available on request.

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ACC 6040 Module 8 questions, answered

Where can I find a free ACC 6040 Module 8 sample paper?

The ACC-6040 course project is shown above in full: a rink operator's year-end income statement and classified balance sheet, and a ratio and cash flow analysis of a listed leisure company.

What is in the ACC-6040 course project?

Two parts: preparing financial statements from provided account balances, then analyzing a company's publicly available financial information.

How much is the ACC-6040 course project worth?

A quarter of the course grade; it is finished in the last week of the term.

What does a falling return on assets with steady asset turnover indicate?

That profit margins, not efficiency in using assets, are driving the decline.

Why read the cash flow statement with the income statement?

Because profits can rise while operating cash flow falls, and capital spending financed by debt shows up only in the cash flow and balance sheet.

ACC 6040 Module 8 Course Project: Statements and a Public Company Analysis Example