INTERMEDIATE ACCOUNTING 2

CASE STUDY 1

You will be required to review and answer a list of questions based on the financial report of a publicly traded corporation. The company you choose needs to be a public company that carries inventory.

Please create a post on the Discussion Board with the following information:

In the subject field write your name and the name of the company you want to analyze. Review the other threads to make sure that another student has not picked the same company. If the company has already been chosen you need to change your selection.

In the message field state the main reasons for choosing that company (what made you select it interested in their products, management style, etc.).

You can start working on the case after you receive an approval from the instructor, so please monitor the Discussion Board for that confirmation.

After finalizing the company please answer the following questions for the most current year (unless otherwise specified). Type your answers on a separate sheet of paper using complete sentences in the format presented below:

All of your answers need to list the page number of the annual report where you found your answers.

You need to attach an electronic copy of the annual report to accompany your case assignment.

All computations MUST be shown.

Failure to follow the above instructions will result in a 10% reduction of your grade and the assignment will have to be redone.

Question	Answer (show any calculations)	Page you found your answer
6	The net income is $1,430 million. This represents a dollar decrease of $352 million (1,752-1,430) and a percentage decrease of 20% (352/1752) from last year.	208

General Information:

1. What is the name of the company?

2. What is the company's product or service?

3. What is the year end of the company?

4. Who is the Chief Executive Officer?

5. Who is the Chief Financial Officer?

6. Who were the auditors?

7. What kind of opinion was given from the auditors?

Income statement/Statement of Retained Earnings:

8. What is the net profit/income/loss for the year? Did it increase or decrease from last year? Give your answer in dollar and percentage change.

9. What are the earnings per share on common stock? How does this compare to last year?

10. Did the company pay any dividends? If yes, how much? Show your answer in total and per share. If no, does the report state why no dividends were paid?

11. What is the number of common shares authorized, issued and outstanding? Compare to last year.

12. Compute the rate of return on sales for the current year and last year. Compare.

13. Is your company a merchandising or manufacturing company? What is the gross profit percentage? Does the report give industry standards in this area? How does your company look in comparison to industry and also, last year?

14. Are there any unusual and infrequent items on the income statement? If yes, what are they and how did they affect the income statement?

15. What is beginning and ending retained earnings balances for the current year? Were there any adjustments to beginning retained earnings (a prior period adjustment), if yes, how much and what was the change?

16. Is the income statement presented in multiple-step format or single step format?

17. What was the amount of total comprehensive income for the current year?

Balance Sheet/Statement of Cash Flows/Notes:

18. Did the company have an increase/decrease in cash? What are the major factors that contributed to the increase/decrease?

19. What methods of depreciation are used?

20. Does the company have any long-term debt? How much is the current portion of long-term debt?

21. What is the company's current ratio? Is this a favorable ratio? Why or why not?

22. What is the value of inventory and what method(s) were used to calculate inventory? Was this a change from the prior year?

23. Does the company own treasury stock? How many shares?

24. Are there any contingent liabilities? If yes, what are they?

25. State the balance in Accumulated Other Comprehensive Income for the two most current years.

26. Final Analysis: If you had money to invest, would you invest in this company? Elaborate and support your decision based upon answers to above questions. Your answer should be at least 5-6 sentences.