Annual Report Project
Annual Report Project: Each student will be responsible for conducting a research project of a company based on the material we have covered in this course. You may choose any company that is publicly traded on an American Stock Exchange. It is your responsibility to obtain an Annual Report for your desired company. A good place to start would be the library databases, specifically the Edgar database at www.sec.gov. Report requirements will be made available.
The objective of this project is to take the concepts learned in the course and apply them to your company’s annual report. The following is a suggested format to use for this analysis:
I. Executive Summary (2-3 paragraphs describing what the company is in business to do)
II. Background and nature of the company’s business (3-5 paragraphs describing how the company got started and how it got to it’s place now)
III. Discussion of the industry in which the company operates (2-3 paragraphs describing the industry in which the company operates and their key competitors)
IV. Information related to the management and key executives (2-3 paragraphs about the companies CEO/CFO)
V. Financial statement analysis (this should be your focus)*
A. Reproduce the company financial statements – Balance Sheet,
Income Statement, Statement of Cash Flows and the Statement of Stockholders’ Equity. (This means you need to re-type them in either a Word or Excel document, you may not photocopy or cut and paste.
B. Ratio Analysis – using ratios on ‘Ratio Sheet’ (compute each ratio as shown below, then write 2-3 sentences describing what the ratio MEANS for the company. Don’t give me the definition of each ratio, tell me what the ratio means for the company)
Example: Current Ratio = Current Assets/Current Liabilities
4,000,000/2,000,000 = 2
VI. Stock Journal From __________________(the stock journal will be a day by day look at the companies stock ups and downs, simply give the day and close for each business day in the time period listed. Example 1/18/11 $25.67)
VII. Discussion (summary) of 5 footnote disclosure items. (choose 5 notes to the financial statements and briefly describe)
VIII. Summarize the letter by the auditing CPA firm (relevant information such as GAAP guidelines, changes in accounting principles, etc.)
IX. Inventory principles used by the company (what method of inventory valuation does the company use, refer to inventory chapter in book)
X. Discussion of current events related to the company – three articles (choose three articles about the company and summarize each – I will need a copy of the actual article)
XI. Recommendation – would you invest in this company, why or why not?
(1-2 paragraphs on your decision to invest or not)