BUS-A 202 ANNUAL REPORT PROJECT INSTRUCTIONS Comprehensive Report - 200 Points

PURPOSE OF ANNUAL REPORT PROJECT: This course requires you to do an Annual Report Project. The primary purpose of this project is to analyze a company's financial statements by doing ratio analysis, reading the annual report, and writing a comprehensive paper about your assigned company.

I. You will be assigned a company (dollar general) by your instructor. The very first thing you need to do is to use the Security and Exchange Commission's Electronic Data Gathering and Retrieval (EDGAR) database to obtain the company's most recent annual report. A. Using the EDGAR Fast Search http://www.sec.gov/edgar/searchedgar/companysearch.html enter your company's stock (ticker) symbol and find your company or use the Company Name search and locate the correct listing for your company. B. After finding your company, enter "10-K" in the Filing Type box and search for the company's annual 10-K filings. These will be displayed in chronological order from the most recent to the oldest. C. Select the first Document whose description is Form 10-K and open it by clicking on the red file link. This will open the company's 10-K report. (Make sure it's the most recent one) D. When you open the 10-K report in the SEC's database, change the iXBRL format to Open as HTML in the top left corner under Menu. E. Next open your HTML file and right-click and do "save as" and save it as "The name of your company and your name 1". This will be an attachment you send to me. F. Select the second Document whose description is Form 10-K and open it by clicking on the red file link. This will open the company's prior year 10-K report. Repeat the process of opening the file as an HTML file and saving it an HTML file. Save it as "The name of your company and your name 2". Data in this file is needed to calculate the average account balances for the older two years reported in your first 10-K file.

II. You will use specific accounts/numbers to calculate 12 groups of ratios (see below). This will be incorporated into your comprehensive paper. You will analyze the numbers and tell why the company's numbers are lacking/growing without bias or opinions. So, you will first show a ratio calculation for the most recent year and the prior year. Then, you will explain in a paragraph analysis of the numbers and the reason for the trend(s). Thus, you will calculate a) three Profitability Ratios and write a paragraph summarizing your analyses of these ratios and trends; b) seven Liquidity Ratios and a paragraph summarizing your analyses of these ratios and trends; and c) two Solvency Ratios and a paragraph summarizing your analyses of these ratios and trends. You DO NOT do a paragraph for each ratio; rather, you will do a summary paragraph for each grouping of ratios (Profitability, Liquidity, and Solvency---3 TOTAL paragraphs)

Profitability Ratios Net Profit Margin Percentage (page 747) Return on Total Assets (page 748) Return on Equity (page 748) Liquidity Ratios Working Capital (page 741) Current Ratio (page 741) Acid-test (Quick) Ratio (page 742) Accounts Receivables Turnover (page 742) Average Collection Period (page 742) Inventory Turnover (page 743) Average Sale Period (page 743) Solvency Ratios Debt to Equity Ratio (page 745) Times-Interest-Earned Ratio (page 745) This analysis will be done in a Word document and added to your comprehensive paper. A. Ratio Calculation 1) Each of the above ratios needs to be calculated for the most recent and the prior year.

2) You must first show the general equation of the ratio using the Word equation editor (Refer to video on Canvas under modules showing how to use this)

3) You must next show the numbers you used to calculate the ratio using Word's equation editor i. This includes averages - you would show something like 100 /((200 + 300)/2). This shows the proper order of operations. It is displayed using the "Linear" option

4) Finally you must show the ratio (the answer). All ratios must be displayed to two decimal places. All profitability ratios and the debt ratio should be expressed as percentages to two decimal places.

5) Here is an example of exactly how the ratio calculations should be formatted: 2020 2019 Current Ratio = Current Assets Current Liabilities $764,318 $357,953 $786,927 $341,545 2.14 2.30 1 . 8 2Note that all eleven ratios must be calculated. Use your financial statements in your Annual Report to calculate these ratios. If they do not directly indicate credit sales for the AR ratios assume all sales were on credit.

B. Ratio Analysis 1) After calculating each group of ratios you must write at least one paragraph explaining what the answer you calculated means. You are preparing a report that will be used by stakeholders with different concerns. They want to know if the results of your ratio analysis are favorable or unfavorable from their perspective. Look at the trend from year to year. You need to use outside sources to support your assumptions. These sources should be from scholarly journals, financial statements, and from the course textbook. You must cite these sources correctly using APA.

2) Do NOT simply restate the numbers and calculate differences. Make the assumption your readers can understand the data and do math. You want to show WHY things happened. In the above example you could expand on how their current ratio increased because they paid down debt and did not take on new long-term liabilities.

III. Submit your Comprehensive Report on your company's most current annual report as a Word document. In #1, you saved the most recent annual report for your assigned company. In #2 you calculated and explained several ratios that are used to analyze the financial performance and health of a company. Now, you will put everything together and write a professional report detailing the company and your assessment of its financial health. Your Comprehensive Report submission must include the ratio analysis you gathered in #2 as an appendix to the report and you must either attach the annual report you used or put it in the appendix. Your Comprehensive Report should include a table of contents and be organized as follows: A. Table of Contents 1. Your Comprehensive Report must include a properly formatted Table of Contents. Table of Contents should contain each of the required items and their page number. Use Word to do this with the built-in Table of Contents tool. B. Introduction 1. Name of the company. 2. Description of the company's principal products. 3. Top competitors of the company. 4. The company's main geographic area of activity. 5. History of the company. 6. Identify the company's stakeholders. Those who have an economic interest in the company's results and financial wellbeing. 7. Any significant things that have happened in the past to the company, such as restructure, bailouts, bankruptcy, going public, etc. 8. A general layout of what the paper is about to present. You MUST have citations and good sources for all your introduction information. C. Summary of the company's financial statements 1. Income Statement a. What have the company's sales and net income been for the past two years? What does management say about the trend? (Hint: Look at the Management Discussion and Analysis section of the company's 10-K filings.) b. Does anything in the Income Statements appear to have a large one-time effect on a particular year's income? If so, research and explain why? (Hint: Look for any Discontinued Operations and/or Extraordinary Gains and Losses sections on the Income Statement.) c. Feel free to insert charts and graphs to highlight the points you make, ensure they are labeled and cited. d. Research the things you find in scholarly sources to find explanations. e. Do NOT simply restate numbers or math, assume your reader can gather required information. 2. Balance Sheet a. Has the company's stockholders' equity increased over the last two years? Has the company's stock price increased over the last two years? (Hint: You can find the company's historical stock prices using either the Google Finance or Yahoo Finance search engine.) b. Has the company increased (or decreased) its assets in the last two years? If so are these short-term or long-term assets? If the company's long-term assets have changed substantially what might this mean? Does management address this in the company's 10-K filings? c. What are the company's liabilities? Have these increased (or decreased) substantially in the last two years?Why might this have happened? Does management address this in the 10-Ks? d. Feel free to insert charts and graphs to highlight the points you make. e. Research the things you find in scholarly sources to find explanations. f. Do NOT simply restate numbers or math, assume your reader can gather the required information. 3. Statement of Cash Flows a. Do cash flows from operating activities exceed net income for each of the last two years? What does this mean? Is the trend good, bad, or indifferent? b. How have cash flows from investing activities changed in the last two years? What does this mean? c. How have cash flows from financing activities changed in the last two years? What does this mean? d. Research the things you find in scholarly sources to find explanations. e. Do NOT simply restate numbers or math, assume your reader can gather required information. D. Summary of Notes to Financial Statements - Read this section of the annual report and summarize information you feel is relevant to the understanding of this company. E. Ratio Analysis 1. This portion of the report should be the ratio analysis. Remember to discuss: a. Profitability b. Liquidity c. Solvency F. Conclusion 1. Based on your analysis draw some conclusions regarding the company. Is its value increasing or decreasing? Why? Does it appear that management has good control over the company's operations? On what basis are you drawing this conclusion? Do you think this company would be a good one in which to invest? Why? G. Appendix 1. You can include all the financial statements from #1 into your appendix or simply send it to me as an attachment. 2. You can add any charts, graphs or other information to the appendix (however, it is not required) IV. The final submission for Part 4 must be a pdf file using the following name: Annual Report Project_YOUR LAST NAME_YOUR FIRST NAME_NAME OF COMPANY.pdf The report should consist of 8 to 15 about double-spaced pages (not including the Appendix) using APA citations (there are a lot of APA resources in the modules area). Do take advantage of the IU East Writing Center to earn 10 extra credit points for this project. Rubric Help: Paper APA, in text citations, Reference list, good introduction, introduction has statement explaining the paper, all three financial statements analyzed with outside sources, in depth writing on your ratio analysis, outside sources used, focus on the how and why things happened, do not restate numbers or math, write good conclusion, include everything in the appendix, spell check, grammar check, have the writing center check your paper. Extra Credit - 10 points

The IU East Writing Center can help you improve your grade on this project by checking your format (including your APA citations and Reference List), grammar, and spelling. To encourage your use of the Writing Center you will receive 10 bonus points for submitting your paper to the IU East Writing Center for their review. Make sure to let them know that the in-text citations and end-of-paper Reference List must be in APA format. Proof of assistance from the Writing Center must be received to earn these points. The Writing Center will notify the instructor automatically, just be sure to give them the instructor's name, course number, and section number. If you are a student at another campus and go on-campus to your writing center you must specifically ask them to notify your instructor and provide the required information. You can do everything online: http://www.iue.edu/hss/writingcenter/ RUBRIC This project is graded on a rubric. There are ten components worth a total of 100 points. The criteria for receiving the maximum points are: 1. Following instructions - Students followed all instructions (10 points). 2. Professionalism - Paper was well written with a logical flow and no grammar or spelling errors (10 points) 3. APA - Paper was properly APA formatted, had proper APA citations, and a properly formatted Reference List (10 points).

4. Table of Contents - The table of Contents contained all important information and was properly formatted (10 points). 5. Introduction - Excellent introduction with all required information and layout of the paper (10 points). 6. Summary of financials - Excellent summary of all three financials, included outside sources, and does not include a restatement of numbers or math (10 points). 7. Summary of overall Annual Report - Excellent analysis of notes to financial statements and any other pertinent information included in the most recent annual report (10 points). 8. Ratio Analysis - Excellent analysis (see Section II-B above), all calculations correct, all ratios correct, and outside sources used. (10 points). 9. Conclusions - Excellent conclusion (10 points). 10. Other- You attached the most recent Annual Report for your company and named the file correctly (10 points).