Assignment: Annual Report Review
The specific course learning outcomes associated with this assignment are:
- Analyze financial statements using financial ratios.
- Analyze and evaluate cash flows over time.
- Use technology and information resources to research issues in financial management.
- Write clearly and concisely about financial management using proper writing mechanics.
This project requires that you conduct a financial analysis of two, comparable organizations. You may select any organizations that produce publicly available financial statements employing IFRS or U.S. GAAP (both companies must follow the same GAAP). Let your professor know which two companies you plan to study before the end of Week 2, as your selection must be approved. The professor reserves the right to limit the number of students comparing the same two organizations.
Assignment:
1. Carefully review the annual reports for both organizations. Comment on what approach each company has taken in reporting to its shareholders. (This requirement is purposely broad to give you the freedom to talk about anything that comes under the broad title of "reporting to shareholders').
2. Prepare a ratio analysis for both companies including a trend analysis for three years. Comment on the significance of the ratios for each company (do they indicate that things are all right, do they suggest that problems exist, or is it likely that problems will occur in the future?). Comment specifically on the similarities and differences among the ratios calculated for both companies and comparison to any benchmark.
3. Prepare an analysis of the cash flow statements for both companies.
4. List and discuss the importance of the two most significant accounting policies adopted by the two organizations (you should select the same two policies for both organizations). Explain the options selected by both companies and comment on any differences that you see. Explain what other policies the organizations could have selected and state why you think they selected one policy over another.
5. Provide the URL's for each company's Annual Report.
Your assignment should adhere to these guidelines:
- Write in a logical, well-organized conventional business style. Use Times New Roman font size 12 or similar, double space, and leave ample white space per page.
- All references must follow JWMI style guide and works must be cited appropriately.
- On the first page or in a header, include the title of the assignment. Reference pages are not included in the assignment page length.