AIS 301/701 – Case Assignment

Memorandum Writing Help

Background:

You are a consultant that psychoanalytical and concise information about companies to individuals looking to invest. A new client of yours, a retired English teacher named James Harding, is interested in investing some of his savings and he has a basic understanding of accounting and finance.

He has come to you to help make sense of Best Buy’s(the company) financial statements he has been reviewing. Specifically, James has asked you to prepare a memo for him addressing (in order) each of the questions listed below using only the 10K of Best Buy for the year ending February 2014. James wants this memo to be no more than 8 pages in length, double-spaced, with 1-inch margins on all sides using Times New Roman 12 point font and wants the memo to adhere to the writing guidelines he has provided. He also stated quite emphatically that he “will not pay for a bunch of data copied from the inter-webs or work that has grammatical errors” and wants you to explain each of your answers/conclusions in an in-depth, comprehensive, well-supported, and concise manner.

How does the company generate revenues?

1. How does the company account for its revenues?
2. What are the company’s major costs?
3. How does the company account for these costs?
4. What assets does the company use to generate revenues?
5. How does the company account for these assets?
6. What is the debt structure of the company?
7. How much financial flexibility does the company have?
8. What is the ownership structure of the company?
9. What are the company’s major estimates (or lack thereof) in the financial statements?
10. How do these estimates help investors assess the company’s future cash flows and risk?
11. Why is it important that the company’s financial statements be faithfully represented?
12. What are the risks/outcomes if the financial statements are not faithfully represented?
13. Would you recommend buying stock in Best Buy?
14. Would you recommend buying a 10-year bond from Best Buy?

James wants you to evaluate questions #14 and #interdependently (i.e., a good fixed-income investment may not necessarily be a good equity investment and vice-versa). In answering question #14, assume (1) if Best Buy’s stock is bought it would be held for 10 years and (2) Best Buy’s stock price is influenced only by Best Buy’s earnings (i.e., if earnings rise over time so would the stock price and vice-versa). In answering question #15, you may ignore the market rate of interest.

Required:

Prepare a memo according to your client’s instructions and the Writing Guidelines you have been provided.

Review the Case as soon as possible and make sure that you understand the Case and its requirements. Any questions regarding the Case must be submitted, via e-mail, to your instructor. Submitted questions will be reviewed and it will be decided which, if any, will be answered. Some questions, and their respective answers, may be provided to all five (5) sections.Questions received after 12 Noon on April 7, 2015 will not be addressed.

On the due date, submit TWO complete copies of your memo along with the cover pages (found below). Staple the case cover page for the Content grader to one copy and the case cover page for the Writing grader to the second copy. Cases are due at the beginning of class on the due date. You may hand in your copies of your Case write-up early if you know you will be absent from class on the due date. No late submissions will be accepted.Electronic submission of your Case is not an acceptable form of performance.

Grading:

The writing portion of your memo will be graded using the rubric shown in the Writing grader cover sheet (found below).The content portion of your memo will be graded on a 1 through 5 point scale (1 being the worst and 5 being the best). This scale will then be used to extrapolate the content points. For example, a content score of 3 will be assigned 60% (3 divided by 5) of the total content points possible.In this example, the content points you would earn would be 24 (60% x 40). Total points for the Case will be the sum of the writing and content points. For example, if you earn 16 out of 20 points in writing and 24 out of 40 points in content, your final point total will be 40 (16 + 24) out of a possible 60.

A memorandum (i.e., a memo) is a document in which you communicate something in a clear, focused and organized way. Within the context of AIS301/701, your memo will require some amount of research before answering the questions posed to you. By nature, memos are direct and you should get to your answer in a straightforward way. The format of a memo (i.e., the way it appears on the page) should mirror this simple and direct approach (see Section III: Formatting your Memo). Please remember that within AIS 301/701, the emphasis in memo writing is placed on explaining difficult accounting concepts to your reader. You should never just tell your reader what you researched. Instead, analyze key points and make a case for your responses!

Writing an amazing memo is not difficult. Read carefully each of the following sources of information before turning your memo in:

The Case Assignment(make sure you understand what is being asked of you; read it several times!)

1. The Writing Guidelines (this document)

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