I am using AT&T.

Part I - Select a company and obtain the Annual Report.

A copy of the company's most recent Annual Report. also needed to obtain some information from the company's 10K (for Part III, question 5) which can usually be found on the company website or on the Securities Exchange Commission website at www.sec.gov.

Part II - The below annual report or sections must be shown to me. includes (1) Management's Discussion and Analysis, (2) The financial statements, (3) Notes to the Financial Statements,

Part III 5-6 minutes presentation for the class using the information your gather in partIV - VI

Part IV -Your presentation should answer the following questions and items: (40%)

Company Background

A brief summary of the company including a description of primary business operations.

1)Getting to know the Annual Report

Scan the report to identify the major sections of the report.Table of Contents that identifies the page number for the following items:

1. Letter to the Shareholders
2. Management's Discussion and Analysis of Financial Results (include major sub-headings in your Table of Contents
3. Income Statement
4. Balance Sheet
5. Statement of Cash Flow
6. Statement of Shareholders' Equity
7. Notes to the Financial Statements (include a list of the individual footnotes.)
8. Report of the Independent Registered Public Accounting Firm

2)Read the Letter to the Shareholders.

1. Who is the letter from?
2. What are some of the company's plans for the upcoming year?
3. What is the tone of the letter (optimistic, cautious, non-committal)?
4. Does it address any problems from the past year?

3)What are the titles of the Company's individual financial statements?When is the company's fiscal year end?How many years of data does the company include in each of its financial statements?

4)Current Assets

1. How much does the company report in accounts receivable?What information is given regarding the allowance for bad debts? Where did you find this information?

5)Liabilities

1. Analyze your company's liability section of the comparative balance sheets.Has the composition of current and long-term liabilities changed significantly over the period?

Part V - Prepare the Financial Ratios (50 points)

Financial Statement Analysis

12) Compute FOUR ratios titled "Profitability Analysisfor TWO years andcomment on the trends noted in the profitability ratios computed .You should give specific comments as to whether each ratio has improved or worsened.

13)ComputeONE liquidity ratio for TWO years and comment on the trends noted in the liquidity ratio. You should give specific comments as to whether each ratio has improved or worsened.

14)Compute ONEtitled "Profitability Analysisfor TWO years andcomment on the trends noted in the profitability ratios computed .You should give specific comments as to whether each ratio has improved or worsened.

PartVIOverall Conclusions (10 %)

a)In your opinion, does this company appear to be a strong company and a good investment?

b)In your opinion, how could the company improve the clarity of its financial reporting?

Annual Report Project Ratios

Note that these ratios contain some variations from the ones in the textbook. This is so that you can complete two years of ratios.

Measures of Profitability

Gross Profit percentage

Gross Profit

Net Sales

Return on Sales

Net income

Net sales

Return on Assets

Net income

Total Assets

Return on Equity

Net Income

Stockholders' Equity

An Liquidity Ratios ( Short Term)

Current Ratio

Current Assets

Current Liabilities

Quick Ratio

Cash + ST Investments + Accounts Receivable

Current Liabilities

Receivables

Net Sales

Turnover

Accounts Receivable

Avg. Collection

365

Period

Receivables Turnover

Inventory Turnover

Cost of Goods Sold

Inventory

Days Sales in

365

inventory

Inventory Turnover

Solvency Ratio (Long Term)

Debt to Equity Ratio

Total Liabilities

Total Equity

Times Interest earned

Net Income + Interest Expense + Income tax Expense

ratio

Interest expense