Accounting for Analytics
Accounting for Analytics
Accounting for Analytics (AM16 SPR 2022)
Stefano De Cesaris
Group assignment 2
Submission details
After completing the assignment, please submit to Canvas:
- Your report (as described in part A below) as a single PDF file. Please note the page limit
given below.
- Your presentation slide (as described in part B below) as a PDF or PowerPoint file.
- Your working files (Excel etc) as a zipped file.
Assignment background and data
The assignment focuses on the analysis of the inventory of Drinks Inc., a fictional retailer of spirits
and wines in the US.
The assignment data consists of four .csv files contained in a Data.zip file (198MB) plus a .pdf file
with field descriptions:
- BegInv.csv providing opening inventory data at 1 January 2021.
- EndInv.csv providing closing inventory data at 31 December 2021.
- Purchases.csv providing inventory purchases data for the year ending
31 December 2021.
- Sales.csv providing product sales data for the year ending 31 December 2021.
- Field Descriptions.pdf providing information about the fields in the files above.
Requirements
A) Prepare a report (no longer than 7 pages) with your answers to the questions below. Please
note: your answers to questions 1 and 2 should also include a brief description of the
analytical process you have followed and of the analytical techniques you have used.
You can conduct your analysis using any software/tool of your choice.
1) (25 points)
Test the accuracy of the closing inventory volumes (units) provided in EndInv.csv by
executing an ‘inventory rollforward’ for all InventoryIds, describing any discrepancy you
find.
The inventory rollforward is the calculation of the ending inventory units based on the
inventory equation:
Ending inventory units = Opening inventory units + Purchased units – Sold units
Compare your calculation to the ending units reported in the EndInv.csv file.
2
2) (35 points)
The chief operating officer of Drinks Inc has requested an analysis of the company’s
drinks inventory to understand whether there are obsolescence issues with the
company’s inventory.
Provide a quantitative analysis of the inventory by brand alongside one (or more)
visualization(s).
Consider using the inventory turnover ratio in your analysis.
3) (20 points)
Discuss the key findings of your analysis in 2) above, focusing on any possible
obsolescence issues with Drinks Inc’s inventory.
4) (10 points)
As we saw in class, the IFRS rules (found in IAS 2) require writing down the inventory
value whenever net realizable value (NRV) is lower than cost. However, IAS 2 does
not allow writing up the inventory when NRV is higher than cost, which makes the
measurement rule asymmetrical.
Discuss the possible advantages and disadvantages, from the perspective of an
external user of accounting information, of that asymmetrical approach to inventory
measurement.
B) (10 points)
Prepare a single slide with your key findings and discussion points. This slide will be shown in
class and your team will briefly present and answer questions.
Note
While this is a group assignment, you may only collaborate within your group.
Collaboration between groups is not permitted.