a. Using the Consolidated Statement of Income determine the net income of this company for the most current year. Using the Consolidated Statement of Cash Flows determine the Cash Provided by (from) Operating Activities for the most current year. Compare the two numbers. What do you think is causing this difference? Explain.
b. Using your company's Consolidated Income Statement, determine the ratio of net income to net revenue or sales. Do this for the three most recent years. Do you think the company is becoming more or less efficient? Explain.
c. Using the company's Consolidated Balance Sheet (Statement of Financial Position), determine the three largest Assets, be sure to look at all the assets, not just the Current Assets. Explain whether you believe the company has invested in the appropriate types of assets for this company.
d. Using your company's balance sheet, determine the Current Ratio for both year ends. What does this tell you about your company?
e. Using your company's balance sheet, determine the total liabilities. Then compare them to the total assets. This is called the Debt/Asset ratio. What does this indicate about the risk of your company?
f. Using the company's Consolidated Statement of Stockholders' (Shareholders') Equity, find the Retained Earnings column for the most recent year. Another place to look is the Cash Flow from Financing Activities on the Statement of Cash Flows. State whether your company is paying dividends. If so, how much are the dividends? Do you think the company is making a good decision in paying or not paying dividends?
g. Using the Consolidated Statement of Cash Flows of this company, identify a decision the company would make concerning financing activities and investing activities. Was the cash flow positive or negative from investing activities and financing activities? What does each of these suggest about this company's financial health?
h. Is the net cash flow from operating activities positive or negative? Has it increased or decreased from the previous years? What does this indicate about your company?
i. Read the Independent Auditors' Report for your company. Is it a qualified or unqualified opinion? How did you determine this? What is your opinion concerning the reliability of an Independent Auditors' opinion?