Financial Statements Briefing & Analysis
The purpose of this assignment is exposure to a ‘real’ financial statement annual report for a stock market based popular company (see semester company list). The following learning outcomes will be assessed:
Please note that Competency 6 is the peak competency. Competency 1 to 5 are building blocks for
competency 6. This post test therefore is cumulative in nature.
C1: Identify accounting, accounting standards, and objectives of financial and managerial accounting.
C2: Identify and differentiate between the four basic financial statements, purposes and elements.
C3: Describe an effective accounting information system and management’s role.
C4: Analyze cost behaviors using various financial analysis.
C5: Identify, construct, and appraise budgets for effective management.
C6: Analyze financial statements to evaluate operations and performance.
Financial Statements Briefing & Analysis
Instructions:
Review 12 company’s financial information and decide on 1 company to process financial statement briefing and analysis. Each individual in class must conduct research a different company. No overlaps are allowed. Once you decide on a company, then message me and declare your company. The first person who selects and I confirm with, then the company is granted and the company is taken off as an option.
Make sure to obtain an approval through the message center, prior to beginning work. Download and read, in detail, at least 3 financial documents provided relating to selected company. The required readings and research are as follows: latest annual report or 10-K filing, annual letter to shareholders and management’s discussion and analysis. Students may research more documents than mentioned; however, the student must research the noted document listed above, at minimum. You will find other documents very helpful such as financial highlights. While you are not required to research this document, it will be very helpful in summarizing financial outcomes.
Financial Statements Briefing & Analysis
Write a comprehensive report containing with the following elements: (If report is partially completed, the report will not be accepted. You must have all parts completed before I will grade your report. Remember this is a comprehensive report and must be summited as a whole.
- Declared Company – Write 1-3 pages about the company and its direction from a financial standpoint (This is based on combination of narrative and quantitative measurements in the annual report.) (Measures C6) i. It is suggested to write this section after researching items b-i below.
- Discuss the users of the annual report. Describe how users can utilize the information. The suggested length be ½ – 1 page. (Measures C1-C2)
- Identify the main financial statements in the annual report and describe the basic financial statement elements. Discuss if the financial statements follow GAAP and how can a user identify if it is compliance with GAAP. The suggested length be 1 to 1 ½ page. (Measures C2)
- Discuss accounting information system related to internal control systems. Based on SarbanesOxely Act, internal controls must be discussed and therefore, report contains these topics. The suggested length should be 1 page. (Measures C3)
Financial Statements Briefing & Analysis
- Risk Factors – Summarize 5 of the numerous risk factors stated in the report. Risk factors are standard requirement of each company’s report. Discuss risks’ impact on company and management. The suggested length be 1 – 1 ½ page. (Measures C4-C6)
- The annual report information should discuss budget outcomes. Discuss budget results and management’s reflection and//or action of budget outcomes. The suggested length be ½ – 1 page. (Measures C4-C5)
- Create a vertical analysis for the most recent year for one major financial statements (consolidated) (Measures C6)
- Create a horizontal analysis for the most recent year and immediate prior year for one major financial statements (consolidated) (measures C4 & C6)
There are various categories of financial ratios discussed in this course. For each category Profitability, Solvency, Efficiencies, and Liquidity ratios, calculate at least 2 ratios (per category), utilizing the financial statements contained in the annual report. Show the formula and the result. Discuss the results and its meaning. The student may integrate information in the report that explains ratio analysis and outcome. APA.
