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Team Assignment (160 points)

Corporate Reporting: Strategy, Governance, Ethics and Control

Read this document carefully before gathering company information used in making a good selection to get an idea of what you will have to report about the company.

In this assignment, your Team selects a company on which to do the Team Assignment. Choose wisely by gathering information about possible companies before making your selection. It is important to select a U.S. based public company with readily available (online) financial statements. This is available for companies through annual reports, 10-Ks, stockholder relations departments, and other SEC filings. It is also important to select a company with a narrow line of business, e.g., not like General Electric. Obtain instructor approval of your selection.

Additionally, you will need to select a company that publishes a Corporate Responsibility and Sustainability Report. If a company does not publish this report, you may NOT select that company for this project.

Warning: If you do not select a U.S. BASED COMPANY THAT PUBLISHES A CORPORATE RESPONSIBILITY AND SUSTAINABILITY REPORT you will lose points on your project for failure to follow assignment instructions. This may result in a score of zero on your project.

Purpose: to familiarize the Team with the chosen company and gain an understanding of available public information about it in order to answer the questions for the team assignment, and to learn how and where to find relevant information about the entity. Remember, accounting is a broad topic related to all aspects of an organization. The assignment asks questions about a wide range of topics. Some will remind you of knowledge learned in financial accounting; others will require you to investigate outside sources for relevant information. When done, you will be well equipped to discuss details about your company (and you will be asked to do so).

After selecting and receiving approval for your company, proceed to execute the necessary research to answer the questions below. To keep things organized, build your report answering these questions, using the outline structure below. Except where indicated, formal paragraphs are NOT required. Questions must be answered in complete sentences using correct grammar, punctuation, etc. Be sure to include page numbers and use a 12-point font to be easy on the readers. Be clear and concise in your explanations. Team members must review each others’ work to assure a quality product that well organized and well written.

Research the company through the company website, the SEC website , online resources, Bloomberg, and the USC or other libraries. Team papers should may not exceed 8 pages (including parts I, II, & III). Appendices may be included.

Information for the following should be taken from the 10-K and the company’s investor relation department. Keep in mind that financial information from other sources, such as Yahoo Finance are unaudited numbers and may not be accurate.

Part I - Report

A. The Company

a. Briefly describe the business the company

i. Major competitors

ii. Corporate strategies

iii. Important markets for its products (Consider contacting the entity’s investor relations department to obtain more information)

b. You should consider and highlight any key differences and potential similarities between the company you selected and the industry or key competitor in terms of:

i. Core products and /or services

ii. Supplier relations

iii. Customer relations

iv. Locations

v. Strategies

c. What is the organization structure of the company? Identify and describe the responsibilities of the top two or three officers.

d. What is the structure of the Board of Directors?

i. What are the audit committee’s responsibilities and the makeup of its membership, e.g., insider/outsider mix, financial background, other relevant experience?

ii. Is the governance structure consistent with Sarbanes-Oxley Act (SOX) requirements?

B. Reporting

a. When is the fiscal year-end for the company and when was the last annual report issued?

i. In your own words, summarize what the company considers to be the key financial results. Be specific and give detail!

ii. In bullets, please list what you consider to be the 5 most important footnotes and explain why

iii. Do any of financial data seem unusual or unique to the company or its industry?

b. Include in your report a copy of audit opinion (as an Appendix item).

i. Is it a qualified or unqualified opinion? How do you know? Explain clearly.

ii. Who are the company’s outside auditors, and what was the audit fee for the last audited year?

c. In two or three paragraphs describe the three key messages in the company’s MD&A and how they link to the company’s strategy.

d. In your own words, what do the reports on internal controls by the company itself and by the auditor tell the reader? Why are both reports included?

e. What forms does the company regularly file with the SEC?

i. When must these SEC forms be filed?

ii. Generally what type of information is in these reports?

f. Provide three examples that the company is complying with SOX?

C. Subsidiaries or segments

a. Does the company have subsidiaries or segments?

i. For two of the subsidiaries or segments (if available), identify the businesses they are in.

ii. How is the financial information for the subsidiaries or segments incorporated in the financial statements? (be specific) What is incorporated in the footnotes?

b. Has the company had any merger or acquisition activity in the last year or so?

i. If so, briefly describe what happened and give your views on the reasons for the activity?

ii. What other companies (no more than two) do you see as possible merger/acquisition partners for your company, and explain potential benefits or costs of each?

D. Corporate Governance

a. Discuss the company’s corporate governance policies related to its board of directors.

b. Discuss the handling of ethical disputes within the company.

c. Briefly discuss company activities with respect to the environment, sustainability, and community involvement.

d. Briefly describe current litigation or ethical situations facing the company.

E. Assume you are a potential employee. Is this a company you would like to work for? Does the company promote diversity and inclusiveness in its hiring practices? Give several SPECIFIC reasons of why OR why not? Rate the company on a 1-10 (higher, better) as a potential employer? Cover BOTH the positives and negatives of your company.

F. General Company/10-K Information

a. CIK (Central Index Key) -- define and list

b. SIC (Standard Industrial Classification) -- define and list

c. Ticker symbol -- define and list

d. Define “SEC filing”

e. Is the company an accelerated or non-accelerated filer? Define both terms.

f. Location

g. EIN -- define and list

h. Industry

i. Date of filings

j. List the names of the CEO and CFO

a. CEO____________________________________

b. CFO____________________________________

k. If there are any, what are the accounting challenges facing the company? Have any accounting problems surfaced? Has the company been impacted by accounting rules? What is the implication of IFRS if any? (Hint: utilize the footnotes to the financial statements; look at 8-K or other SEC filings to help answer the question)

l. List the following from the most recent financial statement published in your 10-K:

a. Total Assets

b. Total Liabilities

c. Equity

d. Total Revenues

e. Total Expenses

f. Net income before taxes

g. Tax rate

h. Net income

i. Net Cash flow

j. Stock Value at date of filing

m. Signatories on the filings

n. Number and names of Board members-do names any stand out? Why?

o. Go to the Securities and Exchange Commission’s website.

a. Click on the litigation section

b. Type in your company’s name

c. Ascertain if there has been an enforcement action from the past 5 years

d. Print out the summary and the SEC filing of the complaint

e. Read both documents

f. Submit the SEC summary of the case as an addendum along with 2-3 paragraphs summarizing your thoughts on what the case involved and what the accounting issue was.

G. Corporate Responsibility & Sustainability (CR&S)

a. Include a copy of your company’s Corporate Responsibility & Sustainability Report

i. Who audited this report?

b. What action has your company taken to promote CR&S?

c. Suggest two (2) additional CR&S initiatives that your company could implement. Please make sure your suggestions are practical and be sure to discuss their impact.

d. How have there existing CR&S initiatives impacted your company’s bottom line? Would they continue these efforts if they did not have a positive effect on company profits? Discuss.

Part II – Ratio Analysis

As part of your analysis, you will need to include ratios to determine how well/poorly your selected company is performing. Pick six from the list of suggested ratios on below and include them in your report and your presentation. Be sure to describe the meaning/trending of each ratio. What impact do they have on the company? In addition, you should make a judgment (i.e., good, bad, or no change) about the financial progress of the company as of the end of its last fiscal year!

PLEASE DO NOT CALCULATE YOUR RATIOS. THEY MUST RETREIVED FROM THE 10-K.

List of Suggested Ratios

1. Working Capital

2. EBITDA

3. Current Ratio

4. Quick Ratio

5. Inventory Turnover Ratio

6. Receivables Turnover Ratio

7. EPS

8. Net Margin

9. Gross Margin

10. Operating Profit Percentage

11. ROE

12. ROA

13. ROI

14. Debt/Equity Ratio

15. Price/Earnings Ratio

16. Dividend Payout

17. Dividend Yield

Part III – Video

Each team must include a short video presentation on the selected company that tells a standalone story. Your team video must be uploaded to YOUTUBE and a link provided to me prior to your presentation. They will provide guidance on what should be submitted. Suggested length: 3-5 minutes (MAXIMUM 5 minutes, ideal is 4). Look for examples of past student videos at the end of this assignment.

Part IV – Creative Representation

Each team should come up with a creative physical representation of their report. Your actual report should be included in the physical project. We encourage you to come by my office to see examples of projects that students have made in the past.

Part V - Presentation

Each group will present their company before a panel of judges. No notes, cue cards, or any other materials may be used during any student’s individual portion of the presentation. I strongly suggest that your team rehearse your presentations several times prior to your presentation date so that they go smoothly. This includes testing of the classroom equipment and technology.

You are expected to thoroughly know the material about your selected company. You will be asked questions by the judges and me. Teams must cover a minimum of 80% of the material from Parts I, II, & III during the presentation and video.  All teams must give an overview of the MDA, company competitors, whether the company is in a survival or extinction mode, and provide an in-depth analysis of the financial statements.

• PowerPoints, poster boards, props, handouts, etc. are permitted.

• Length of presentation: maximum of 15 minutes including the presentation of the video. Each team will be allowed 3-5 minutes to set up.

• Team presentation order will be determined prior to the presentation dates.

• Dress code: teams may dress in the theme of their respective companies.  For example, the team that did Royal Caribbean dressed up like cruise ship employees while team Disney came attired as various Disney characters. Otherwise, formal business attire is required.

Due Dates:

|Team Companies Finalized |No later than February 9th |

|Part I - Report |These items should be turned in |March 22nd |

| |as one paper (12 pages max.) | |

|Part II - Ratios | |March 22nd |

| | |

|Part III - Video |April 3rd by Noon (YouTube link due via email to Professor Sweeney |

| |& Joe) |

|Part IV - Creative Representation |April 5th (for ALL teams) |

|Part V - Project Presentations |April 5-7th |

Key Things to Remember:

Paper:

1. Include a copy of the audit opinions, SEC litigation summary, your article, and relevant portions of your 10-K as appendices to your report

2. Do not turn in anything that is not typed

3. While you may cut and paste from the internet for a vast majority of information on this project, you cannot plagiarize the MDA-put it in your own words

a. Warning: Your paper is thoroughly reviewed and compared to 10-K and other data. DO NOT make up information and present it as fact.

4. Include a works cited as necessary

Presentation:

1. CREATIVITY is the key to impressing the judges.

2. Practice! Practice! Practice! The judges can tell if you are a well-rehearsed team or if you’ve never practiced before. DO NOT wait until the last minute to put your presentation together. As indicated on the syllabus, ONE team day will be provided for you to practice.

Competition

Aside from the graded portion of this project, additional awards will be given out to top performing teams. Typically, one team from each class will be chosen for each of the following categories: best-in-class, best video, best creative project. The number and size of the awards may be altered as the judges and I see fit. Additionally, one group will be chosen as the best overall winner after the judges have viewed all of the presentations.

|Category |Award (Bonus Points) |

|Best Video |20 |

|Best Creative Project |20 |

|Best-in-Class |30 |

|Best Overall |50 |

HAVE FUN WITH THIS PROJECT!

GET MOVING!! THIS WILL TAKE TIME!!

Sample Videos:

Here is a list of sample videos that students have created in past years. Watch a few them to help you get an idea for what the judges and I are looking for. You may need to copy and paste the links below into your browser.

REGULUS



RALPH LAUREN



NVIDIA





Michael Kors



Macy’s





Exxon Mobil



Dunkin’ Brands



Southwest Airlines



Dole Foods



Viacom



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