Company GameStop In this project, you will select a publicly traded company that operates in the retail industry and has physical stores. Using the investor relations section of the companys website (and/or the SEC Edgar database), you will locate and analyze the companys most recent 10-K annual report filing. Make sure to review not only the financial statements themselves but also the accompanying notes to the financial statements, along with the management discussion and analysis and other supporting information. Answer the questions in Parts 0-10 below using the companys 10-K annual report and other sources as needed. You will notice that Parts 1-10 align with the content that has been studied in this course throughout the semester. Part 0: Company Background and Competitors In addition to your companys financial performance which will be detailed in Parts 1-10 below, please also provide information on the following: A. Name and describe the company, its history, its products and/or services, its status, and its outlook. B. In what industry does your company operate? What trends are occurring within the industry? What is the industrys outlook? C. Who are the companys primary competitors? 1. Name and discuss at least three. 2. Compare your companys performance to its competitors using at least (5) metrics or perspectives from Parts 1-10 below. Ratio analysis is encouraged here. Part 1: Investments 1. Does your company report investments within the assets section of the balance sheet? If so, are these investments in debt or equity securities? If debt securities, what approach (held-to- maturity, trading, or available-for-sale) is your company using to account for its investments? 2. What is the total amount of your companys investments as of the most recent year-end and where are those investments shown on the balance sheet? 3. Does your company report any investments at fair value? If so, what is the amount of your companys investments that are reported at Level 1, Level 2, and Level 3 of the fair value hierarchy? 4. Did the company report any significant changes in accounting policies during the most recent year? If so, what were those changes? Be specific. Part 2: Current Liabilities and Contingencies 5. What are the components of your companys current liabilities? 6. Are current assets sufficient to cover current liabilities? What is the current ratio for the most recent year? How does the ratio compare with the prior year? 7. Find the disclosure note that discusses the companys gift card sales. a. By how much did the companys gift card liability change between the most recent year's end and the previous year's end? b. How would the following affect your companys gift card liability (indicate increase, decrease, or no change for each): i. Sale of a gift card ii. Redemption of a gift card (the holder using it to acquire goods or services) iii. Increase in breakage estimated for gift cards already sold c. Find the disclosure note that discusses the companys accounting for contingencies. Does their approach seem appropriate? Why or why not? Part 3: Bonds and Long-Term Notes 8. Calculate the debt-to-equity ratio for your company for the most recent year. Assume the average ratio for U.S. retailers is 1.95 for the same period. How does your company compare and what does that indicate about the companys financial status? 9. Calculate your companys times interest earned ratio for the most recent year. Assume the coverage for companies in the U.S. retail industry for the same period was 6.5. How does your company compare and what does that indicate about the companys financial status? Part 4: Leases 10. Does your company engage in leases? If so, what type (operating, financing, etc.)? For what purpose(s) did your company engage in these leases? Part 5: Accounting for Income Taxes 11. From the income statement, determine the income tax expense for the most recent year. Tie that number to the provision for income taxes. Prepare a summary journal entry that records your companys tax expense from continuing operations for the most recent year's end. 12. Locate the note that pertains to the companys net deferred tax asset/liability. Calculate the change in net deferred tax assets or liability since last year. To what extent did you account for that change in the journal entry you wrote for the previous requirement? List possible causes of any differences. 13. Does your company have any liabilities for unrecognized tax benefits as of the most recent year- end? If so, how much is that liability? Part 6: Pensions and Other Postretirement Benefits 14. What were the changes in your companys projected benefits obligation in the most recent year-end and the previous year for its qualified pension plans? 15. What were the changes in your companys pension plan assets in the most recent year-end and the previous year for its qualified pension plans? 16. Were these pension plans overfunded or underfunded for the most recent fiscal year and the previous year? 17. What were the components of your companys pension expense in the most recent year and the two prior years? Part 7: Shareholders Equity 18. Does your company report any share repurchases? If so, what was the dollar amount of the shares repurchased in the most recent year? 19. Does your company account for share repurchases as treasury stock or retired shares? Part 8: Shared-Based Compensation and Earnings per Share 20. Find the note that pertains to share-based compensation. What type of awards does the company report? 21. Based on the fair value of the awards granted, what was your companys primary form of share- based compensation for the most recent year? 22. Projections of future performance should be based primarily on continuing operations. What was diluted EPS for continuing operations in each of the most recent three years? 23. How many shares were included in diluted earnings per share but not basic earnings per share due to share-based compensation awards? Part 9: Accounting for Changes and Error Corrections 24. Do the notes to the financial statements give any indication that your company has changed any of its major accounting methods? 25. Is there any evidence of the company having to make any restatements due to errors? Part 10: Statement of Cash Flows 26. Did your companys cash provided by operating activities in the most recent year increase or increase from the previous year? 27. Is your companys cash provided by operating activities more or less than net income in the most recent year? 28. What is your companys largest investing activity? 29. Is your company increasing or decreasing its long-term debt? 30. Some transactions that dont increase or decrease cash must be reported in conjunction with a statement of cash flows. What activity of this type did your company report during each of the three years presented?