FINANCIAL ACCOUNTING TEAM PROJECT REQUIRED: WRITTEN PROJECT
1. Obtain the most recent annual report for TWO companies in the SAME industry. The reports should contain at least three years of income statement data and two years of balance sheet data.
2. Analyze at least 3 (three) items on the income statement for your base company that would be important to an investor, and discuss whether your company's performance related to these items appeared to be improving, deteriorating, or remaining stable. Justify your answer.
3. Analyze at least 3 (three) items on the balance sheet for your base company that would be important to an investor, and discuss whether your company's performance related to these items appeared to be improving, deteriorating, or remaining stable. Justify your answer.
4. Identify 2 (two) items not included in (or derived from) the financial statements that you think would be important to someone considering whether to invest in your company. Discuss your reasons for believing that these two items about the company would be important in making an investment decision. (Hint: you might want to consider items discussed in other business classes.)
5. Compare your base company's financial statements with those of the second company in the same industry. If you were making a decision to invest in one of the two companies, which company would you choose? Why? (Note: your answer in this section must include some financial issues, but your answer need not be limited to a discussion of financial issues.)
Note: 1. You must submit the entire annual report for each company being discussed.
2. Your analysis must include page references to relevant portions of the annual reports, and the relevant portions of the annual reports must be highlighted. Your report must also contain appropriate quotation marks for quoted material and appropriate citations for material taken from sources outside the financial statements.
3. Your analysis is limited to 6 (six) pages, and must be typed, double-spaced, and have 12-point font.
FINDING ANNUAL REPORTS
You are required to turn in a copy of both companies' annual reports with your group project. The best way to obtain annual reports is to request them directly from the company. You may find a company's contact information on its website (usually in an SEC Filings or Investor Relations/Information tab). You should request two copies, and exchange the second with the group using your company for comparison. Annual reports are also available on the SEC website, https://sec.gov/, and through the university library website using either the S&P Market Insight or Lexis-Nexis databases.
Company Website Example: finding an annual report for Kroger:
1. Type Kroger.com into the web browser address bar 2. Click the link SEC Filings towards the bottom of the screen 3. Click on one of the links to open a PDF document or 4. Click the Contact US link for contact information
SEC Website Example: finding a 10-K report for Kroger:
1. Click the link Search for Company Filings under Filings & Forms (EDGAR) 2. Click the link for Full Text Search on the left-hand side of the screen 3. Click the link for Advanced Search on the right-hand side of the screen 4. Go to the In Form Type pull-down menu and click on 10-K 5. Type the company name in the appropriate box 6. Click on Search
S&P Market Insight Example: finding a 10-K report for Kroger:
1. Click the link for Company at the top of the screen 2. Type the ticker symbol in the box and click Go 3. Click the link for EDGAR on the left-hand side of the screen 4. Click the icon of the document to change the format (Word, HTML, etc) 5. Click the link for the 10-K report under Annual Filings 6. Click the link for Archives to access older 10-K reports (back to 1994)
Lexis Example: finding a 10-K report for Kroger:
1. Click Business at the top of the screen 2. Go to the Left-hand side of the screen and click the link for SEC Filings 3. Type either the ticker symbol or the company name into the appropriate box 4. Go to the Sources pull-down menu and click on SEC Form 10-K 5. Select the date you want (the default is all dates) 6. Click on Search (In LexisNexis, a single 10-K is often split into several records, so be careful)