INDIVIDUAL PROJECT/ ANNUAL REPORT PROJECT
Choose a U.S. public company that merchandises or produces tangible) Do NOT choose a bank, insurance company or other service organization. The company should have a balance for accounts receivable and inventory. Utilizing (1) the company’s website to access the most recent annual report, and/or (2) the Securities and Exchange Commission’s edgar database www.sec.gov (Search for the most recent form 10Ks for your company. PRINT ALL 4 FINANCIAL STATEMENTS FOR THE MOST RECENT YEAR), and (3) http://biz.yahoo.com/i, (PRINT THE ANNUAL INCOME STATEMENT, BALANCE SHEET AND CASH FLOW STATEMENT FROM THE YAHOO WEBSITE). Answer the following questions about your company. Use the most recent annual reports available
1. Using the yahoo website above, list the closing price of the stock for 3 different points in time (example: this Friday and the Friday before you complete the assignment)
Date Price per share
a. Initial selection date 2/10/2014 ___________________
b. Intermediate date 3/10/2014 ___________________
c. Final selection date 4/9/2014 ___________________
If you had invested $ 5,000 on February 10, what would be your gain (loss) if you sold on April 9th?
(Method: Divide $5,000 by the initial price to find the number of shares “purchased”. Multiply that number of shares by the change in price from initial to final selection date to find the gain or loss.)
2. Using the information in the annual report, list the answers to the following questions
a. Ending date of the last fiscal year
b. What is the company’s ticker symbol?
c. What are the principal products and/or services that your company provides?
d. Name of the independent public accounting firm that prepared the audit report (Find the “Independent Accountants’ Report, right before the financial statements in the annual report, the answer will be accounting accounting firm, not an individual).
e. How many shares of stock are authorized? Issued? (on annual report balance sheet)
f. What is the basic earnings per share (from the annual report income statement)
g. What depreciation method does your company use: straight-line, units of production, or declining balance (in annual report footnote about property and equipment)
h. What inventory cost method does your company use (LIFO, FIFO, average, specific ID): in annual report footnote on inventory)
3. Using the information on your company through the yahoo website above, answer the following questions
a. What is the company’s industry?
b. What is the name of a major competitor company?
4. Go to the yahoo site mentioned above. Choose ‘News’ and select an interesting article relevant to your company. Articles that only announce earnings are not sufficient. Articles should contain a substantial news item. Include a copy of the article with you write-up.
a. What was the source of the article? (For example, Reuters, Businesswire, etc.)
b. Pretend that you are a personal financial planner and that one of your clients owns stock in the company. Write a brief memo to your client summarizing the article and explaining the implications of the article for their investment.
5. Based on the information contained in the most recent YAHOO financial statements, compute the following ratios for your company for the past 2 years? Compute each year separately, showing the calculations for each ratio. The formulas for the ratios are available in your text book. (For g, k, and q, write a 2-4 sentence conclusion for each group of ratios (a-f, h-j, l-p) where indicated, indicating whether the ratios are improving, stable, or getting worse). For ratios, use a table or list.
a. Current ratio.
b. Current cash debt coverage ratio
c. Receivables turnover ratio and
d. Average collection period
e. Inventory turnover ratio and
f. Days in inventory
g. What conclusions concerning the company’s liquidity can be drawn from these ratios?
h. Debt to total assets.
i. Cash debt coverage ratio.
j. Free cash flow.
k. What conclusions concerning the company’s solvency can be drawn from these ratios?
l. Return on assets ratio.
m. Profit margin ratio.
n. Asset turnover ratio.
o. Gross profit rate.
p. Earnings per share.
q. What conclusions concerning the company’s profitability can be draw?
6. Would you recommend this company for investment purposes? Why or why not (give clear and concrete reasons, your opinion should be supported with 5-8 substantial facts)
*******THE ANNUAL REPORT PROJECT IS DUE April 21, 2014******
Report format: No folders, just a title page including COMPANY NAME, TICKER SYMBOL, your NAME Class Section and Semester
The information should be reported by numbering and labeling each item in the order requested. The finished product should be typed and must include a copy of:
i. The most recent 4 statements (balance sheet, income statement, cash flow statement, and statement of stockholders’ equity) from the annual report itself.
ii. The most recent ANNUAL financial statements (income, balance sheet and cash flow statement) for your company from the Yahoo website. (Compare the dates, to make sure they agree with your annual report.)
iii. A copy of the news article used in question 4.
No handwritten reports will be graded. Use a word processor.
Answers to Question 4, 5g,k,and q and 6 should be written in complete, grammatically correct sentences. For other questions you may just list the answer. The following format is suggested.
Font: Times New Roman, 11 point font. Margins: one-inch all around.
Line spacing: double-spaced. Paragraph: left alignment, first line half-inch indentation.
Footer: Your name, Page number, assignment identification and company name.
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