ANNUAL REPORT PROJECT



ANNUAL REPORT PROJECT

BAA 510

Fall 2005

□ The objective of this project is to familiarize you with the information that is contained in the annual report of a public company.

The completed project should be neat in appearance and free of any grammatical errors or misspellings. In addition, your project should be well organized, with all supporting documents clearly identified.

1. Choose a public corporation for your project. You must select a manufacturing company.

NAME OF COMPANY:

INDUSTRY

What, specifically, does your company do?

2. Obtain an annual report for your company.

What is the address of your firm?

Does your firm have a web site? If so, what is the address? Attach a copy of the home page of the web site.

How did you obtain the annual report?

Who should be contacted for financial information?

3. Gather some basic information on your company.

State of incorporation:

This report is for fiscal year ending:

Who is the independent auditor of your company?

What type of opinion did the auditor issue?

Who is the CEO of the company?

Who is the CFO of the company?

Who is the Chairman of the Board of Directors of your company?

How many people are on the Board of Directors?

How many members are external to the company?

On which exchange does your company trade its stock?

What is the ticker symbol for your company?

What was the 52-week high and low price of your stock for the reported fiscal year?

Does your company belong to a group of other companies? In other words, does it have subsidiaries or is it a subsidiary of another firm? If so, describe.

4. The Income Statement

How many zeroes are omitted from the presented numbers?

What amount did your company report for each of the following?

Revenue from sale of goods and services _________________

Cost of Goods Sold _________________

Operating Income _________________

Income tax expense ________________

Interest expense ________________

Total expenses (including interest and taxes) _________________

Net income _________________

Primary Earnings per Share _________________

Do you notice any special items that appear at the bottom of the income statement? This would include income (loss) from discontinued operations, extraordinary gains (losses) or cumulative effect of a change in accounting principle. If any of these do appear, go to the notes to locate an explanation of these events. List each event and a summary of the explanation in the space below.

Are any “forward looking” or “pro forma” statements presented? If so, what is the net income reported?

5. The Balance Sheet

Does your organization's AR include a classified balance sheet (segregates current and long term assets and liabilities)?

A comparative balance sheet (presents more than one year)? If so, what years are presented for each statement?

How much was reported for each item below?

Current assets _______________

Property, plant and equipment ________________

Other long-term assets ________________

Current liabilities ________________

Long-term liabilities ________________

Common stock ________________

Contributed capital in excess of par ________________

Retained earnings ________________

Current assets are what percent of total assets?

Property, Plant and Equipment are what percent of total assets?

Inventory is what percent of total current assets?

Are any commitments are contingencies shown on the Balance Sheet? If so, what are they?

6. The Statement of Stockholders' Equity

Is there a Statement of Stockholders' Equity in your Annual Report?

What was the beginning amount of the year stockholders' equity?

What was the ending amount stockholders' equity?

Did your company issue any common or preferred stock during the year? If so, identify the type of stock, the number of shares issued and the par value per share.

Did your company have a stock dividend or stock split during the year? If so, indicate the amount of the dividend or split.

List below the items that caused changes in stockholders' equity.

7. Notes to the Financial Statements

How many Notes are listed at the end of the financial statements?

List the title of each Note:

What inventory method does your company use (LIFO, FIFO, etc.)?

Which depreciation method does your organization use? Is more than one method used?

Does your company have any stock based compensation?

Were any new accounting pronouncements applied during the year?

What is the number of the note that relates to income taxes?

What page presents the CEO certification of the statements as required by Sarbanes Oxley?

8. Management Discussion and Analysis

What is the tone of the MD&A?

Compare your MDA with the list in your textbook. How well were the items in the list addressed?

9. What is your overall opinion of the annual report? Did it include the required information? Would the average investor be able to understand the information presented? How much PR fluff was included?

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