Acct312 Project Analysis

An Analysis on the Financial Statements of Coach

This paper covers several important financial analytics of the popular fashion company, Coach, Inc. This company has grown dramatically in popularity over the past few years. Such analyses can be very important in deciding whether or not it will be beneficial to invest in the company. Some of the topics covered are deferred tax assets and liabilities, temporary and permanent differences, income tax provision, defined benefit and contribution plans, earnings per share, share-based compensation, and the statement of cash flows. Please note that all dollar amounts are in thousands, except for per share data.

1.) What amount of deferred tax assets or deferred tax liabilities are on the two most recent years on the balance sheet? What gives rise to these deferred taxes? What information is disclosed in the footnotes related to deferred taxes? Please define a deferred tax asset and deferred tax liability.

In 2011, Coach had a tax benefit of $251,549, and a tax liability of 53,990, which left them with an overall deferred tax benefit of $197,559. In 2012, they had a deferred tax benefit of $242,144 and a deferred tax liability of $70,905, which resulted in an overall tax benefit of $171,239. The overall tax benefit decreased from 2011 to 2012 by $26,320, or 13.32%. The tax benefit arises from multiple different factors; including pensions and employee benefits, property and equipment, and Coach also had a net operating loss in both years. A deferred tax asset is an asset on a company’s balance sheet that may be used to reduce any subsequent period’s income tax expense. A deferred tax liability is an account on a company’s balance sheet that is a result of temporary differences between the company’s accounting and tax carrying values, the anticipated and enacted income tax rate, and estimated taxes payable for the current year.

2.) What temporary and permanent differences does the company disclose in its...