10 Aug Examining Financial Statements
Students will select a Fortune 500 company to examine (http://fortune.com/fortune500/). Prepare a Word document using information from their Annual Report. (Use the most recent year available.)
The Word document must cover ALL of the following:
Overview
· Describe the content and purpose of the three main financial statements.
Balance Sheet
· What are the balances at year-end for assets, liabilities, and stockholder’s equity?
· Prepare a common-size Balance Sheet. Be sure to properly label and form this financial statement.
· Review the Notes to the financial statement:
. What Inventory Method does the company use?
. What other pertinent information does the company disclose about their inventory
. What does the company disclose regarding fixed assets and depreciation?
Income Statement
· What is revenue, gross profit, and net income for the year?
· Prepare a common-size Income Statement. Be sure to properly label and form this financial statement.
· Are there any special items on the Income Statement (e.g. Discontinued Operations, Extraordinary items)? If so, describe the event that caused the item and why is this event classified as a special item.
· Review the Notes to the financial statement:
. Describe the company’s policy on revenue recognition.
Statement of Cash Flows
· What are the cash flow totals for operating, investing, and financing activities?
· What are some of the main investing and financing activities that occurred? If there are negative cash flow totals, describe whether this cash outflow has a positive or negative impact on the company’s sustainability. Why?
Management’s Discussion and Analysis (MD&A)
· Highlight 3 interesting topics discussed in the MD&A section of the annual report.
. How does the information presented impact the financial statements and relevant ratios?
Additional Instructions
· Make sure to choose a Fortune 500 company that has inventory
· Annual Reports (10-k) can be found:
. Company website – Usually at the bottom of the main page under a link titled ‘Investor Relations’, ‘Corporate’, (or something similar).
. SEC website (https://www.sec.gov/). Click ‘Filings’ tab to search for the company (Make sure to use the 10-k report).
· The document should include the same headings listed above (Overview, etc.).
· The document should be APA formatted (including title page, APA formatted references, etc.)
· You can complete the common size financial statements in Excel then copy and paste into your main Word document.
· MUST: Include the direct link to the Annual Report
· You must upload your file to Blackboard under Week 3 Assignments. Go to the Assignment, scroll down to “Attach Local File” and click Browse to select YOUR file, then hit SUBMIT.
| Evaluation Criteria for: Assignment 1 | ||||
| Assignment 1 points | WD
68 -75 Points |
Dev
56 to 67 Points |
NSW
55 points or lower |
|
| Overview (10%)
7.5 points |
Provides a complete overview of the three main financial statements. Clearly states the content and purpose of each. | Provides a somewhat complete overview of the three main financial statements. Clearly states the content and purpose of each. | Provides no clear overview of the three main financial statements. Does not clearly or fully state the content and purpose of each. | |
| Balance Sheet (20%)
15 points |
Reported balances agree to the linked Annual Report. Common-size balance sheet is computed correctly. Clearly and correctly describes the required information from the Notes to the Financial Statement | Reported balances agree to the linked Annual Report. Common-size balance sheet contains some inaccuracies. Somewhat clearly and correctly describes the required information from the Notes to the Financial Statement | Reported balances do not agree to the linked Annual Report. Major inaccuracies with the Common-size balance sheet. Description of the required information from the Notes is inaccurate or incomplete. | |
| Income Statement (20%)
15 points |
Reported amounts agree to the linked Annual Report. Common-size income statement is computed correctly. Clearly and correctly describes the required information from the Notes to the Financial Statement | Reported amounts agree to the linked Annual Report. Common-size income statement contains some inaccuracies. Somewhat clearly and correctly describes the required information from the Notes to the Financial Statement | Reported amounts do not agree to the linked Annual Report. Major inaccuracies with the Common-size income statement. Description of the required information from the Notes is inaccurate or incomplete. | |
| Statement of Cash Flows (20%)
15 points |
Reported amounts agree to the linked Annual Report. Correctly identifies sources of major investing and financing activities | Reported amounts agree to the linked Annual Report. Somewhat correctly identifies sources of major investing and financing activities | Reported amounts do not agree to the linked Annual Report. Incorrectly identifies sources of major investing and financing activities | |
| MD& A (20%)
15 points |
Highlights 3 topics discussed in the MD&A. Provides a reasonable and logical analysis of how the information may impact the financial statements and ratios. | Highlights at least 2 topics discussed in the MD& A. Provides a somewhat reasonable and logical analysis of how the information may impact the financial statements and ratios. | Highlights 1 or less topics discussed in the MD& A. Does not provide a reasonable and logical analysis of how the information may impact the financial statements and ratios. | |
| Grammar, Speech Patterns, Punctuation and APA (10%)
7.5 points |
Clearly uses proper grammar, APA for in text citations and for all references. Formatting is clean and reader friendly. | Has more than three errors in APA, grammar and or punctuation. Formatting is somewhat clean and reader friendly. | Has more than four errors in APA, grammar and or punctuation. Formatting is not clean nor reader friendly. |
N S W = Needs Significant Work D = Developing WD = Well Developed
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