Obtain from the library the annual report of a well-known company (or a company specified by your instructor).

Instructions

From the balance sheet, income statement, statement of cash flows, and notes to the financial statements, answer the following:

a. What are the largest assets included in the company's balance sheet? Why would a company of this type (size and industry) have a large investment in this particular type of asset?

b. In a review of the company's statement of cash flows:

1. What are the primary sources and uses of cash from investing activities?

2. Did investing activities cause the company's cash to increase or decrease?

3. What are the primary sources and uses of cash from financing activities?

4. Did financing activities cause the company's cash to increase or decrease?

c. In a review of the company's income statement, did the company have a net income or a net loss for the most recent year? What percentage of total revenues was that net income or net loss?

d. Select three items in the notes accompanying the financial statements and explain briefly the importance of these items to people making decisions about investing in, or extending credit to, this company.

e. Assume that you are a lender and this company has asked to borrow an amount of cash equal to 10 percent of its total assets, to be repaid in 90 days. Would you consider this company to be a good credit risk? Explain.