Part 1 Select Company (Walmart) As a team, choose a publicly traded company and obtain its annual report or 10K 1 Select a publicly traded company that you understand what it does and that you are interested in Generally, that is a company that makes and or sells tangible products Do not select a public utility, financial institution, brokerage firm, insurance company, cooperative, or government entity Summary annual reports are not sufficient 2 Order a hard copy of the annual report or 10K These are free however, allow time for it to be delivered through the mail You may also print out the annual report 10K from an online source however, that may require upwards of 100 sheets of paper Ordering is the cheap alternative A useful resource is fortune com This site provides links to the websites of Fortune 500 companies To obtain a printed copy of the annual report, contact the companys Investor Relations department Part 2 Overview of Annual Report (25 pts) Using your companys annual report or 10K as well as internet sources, respond to the following (Source Annual Report Project by Nancy A Herring, PhD, CPA) What is the name of your company Walmart What is the industry classification for your company (according to Fortune or the Internet site you are using) On what stock exchange is the companys stock traded What is the ticker symbol for the company What were the lowest and highest stock prices during the past year Describe the nature of the companys business List the companys primary products or services (use brand names where available) What is the address of the companys corporate headquarters What is the address of the companys web site List the countries in which the company operates Who is the chairman of the companys board of directors Who is the companys CEO The annual report contains several sections Identify the following page number each of the following items are found in your companys annual report (Although the page number is only requested here, you are strongly encouraged to read each of these sections as this time ) FINANCIAL HIGHLIGHTS This section provides a summary of selected financial results over a number of years You may find two schedules providing highlights one brief summary near the front of the annual report and a more detailed summary in the financial section This second section may be called Five Year Summary of Selected Financial Data Note its page number here Page THE CHAIRMANS LETTER This letter provides the chairmans overview of the past year and developments which will affect the next year Note its page number here Page THE COMPANY, ITS PRODUCTS, ITS EMPLOYEES This section may contain a number of color photographs and will highlight the products and accomplishments of the company Note its page number here Page MANAGEMENT DISCUSSION AND ANALYSIS This section discusses operating results, industries in which the company operates, financing and investing activities, significant events, trends and developments Note its page number here Page THE FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS This section contains the balance sheet (also called statement of financial position), income statement, statement of cash flows, and statement of stockholders equity The accompanying notes, as indicated at the bottom of each of the above statements, are an integral part of the financial statements The financial statements cannot be understood without reference to the notes Consequently, the financial statements AND accompanying notes will be the focus of this entire project Note the page number of each of these financial statements Balance Sheet Income Statement Statement of Cash Flows Statement of Stockholders Equity Identify the number of the note and its page number for the following items Summary of significant accounting policies Note Page Inventories Note Page Plant assets Note Page Long term debt Note Page Employee benefit plans Note Page Commitments and contingencies Note Page Other notes Title of note Note Page MANAGEMENT REPORT ON INTERNAL CONTROL Page THE INDEPENDENT AUDITORS REPORT REPORT ON INTERNAL CONTROL Page REPORT ON THE FINANCIAL STATEMENTS Page REVIEW THE CHAIRMANS LETTER TO THE SHAREHOLDERS Page Summarize the major points made in the letter (This make take several paragraphs ) Locate the management report(s) and the independent auditors report(s) Answer the following Who is responsible for the preparation and integrity of the financial statements Does the company maintain a system of internal controls Why What is the purpose of the companys audit committee What is the name of the independent public accountants (auditor) There are two independent auditors reports (1) a report on internal control, and (2) a report on the financial statements The following questions relate to the auditors report on the financial statement audit What is the auditors responsibility What is the purpose of an audit Summarize the auditors opinion Part 4 Complete a Written Report (100 pts) The report should be no less than 10 pages, double spaced and include Your paper should be structured as follows 1 Introduction and company background 2 Discuss the accounting methods chosen by the company and the impact of those choices on the financial statements These choices likely will include the companys inventory costing and depreciation methods as well as other methods you consider significant 3 Assess the companys liquidity Be sure to fully identify what caused certain trends and changes in patterns 4 Discuss the companys activity ratios Be sure to fully identify what caused certain trends and changes in patterns 5 Discuss the companys profitability Be sure to fully identify what caused certain trends and changes in patterns 6 Discuss the companys coverage and solvency ratios Be sure to fully identify what caused certain trends and changes in patterns 7 Identify and discuss significant cash flows Be sure to fully identify what caused certain trends and changes in patterns 8 Identify any other information which you consider appropriate in coming to a decision, including dividend patterns and price earnings ratios Be sure to fully identify what caused certain trends and changes in patterns 9 Overall conclusion about the financial health of the company (Ultimately answer the question that if you were a creditor or investor, would you loan money to or invest in this company ) Fully explain the reasons for your recommendation

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Part 1 Select Company (Walmart) As a team, choose a publicly-traded company and obtain its annual report or 10K. 1. Select a publicly-traded company that

Part 1 Select Company (Walmart)

As a team, choose a publicly-traded company and obtain its annual report or 10K.

1. Select a publicly-traded company that you understand what it does and that you are interested in. Generally, that is a company that makes and/or sells tangible products. Do not select a public utility, financial institution, brokerage firm, insurance company, cooperative, or government entity. Summary annual reports are not sufficient.

2. Order a hard copy of the annual report or 10K. These are free; however, allow time for it to be delivered through the mail. You may also print out the annual report/10K from an online source; however, that may require upwards of 100 sheets of paper. Ordering is the cheap alternative.

A useful resource is fortune.com. This site provides links to the websites of Fortune 500 companies. To obtain a printed copy of the annual report, contact the companys Investor Relations department.

Part 2 Overview of Annual Report (25 pts)

Using your companys annual report &/or 10K as well as internet sources, respond to the following. (Source: Annual Report Project by Nancy A. Herring, PhD, CPA)

What is the name of your company?

Walmart

What is the industry classification for your company (according to Fortune or the Internet site you are using)?
On what stock exchange is the companys stock traded?
What is the ticker symbol for the company?
What were the lowest and highest stock prices during the past year?
Describe the nature of the companys business.
List the companys primary products or services (use brand names where available).
What is the address of the companys corporate headquarters?
What is the address of the companys web site?
List the countries in which the company operates.
Who is the chairman of the companys board of directors?
Who is the companys CEO?

The annual report contains several sections. Identify the following page number each of the following items are found in your companys annual report. (Although the page number is only requested here, you are strongly encouraged to read each of these sections as this time.)

FINANCIAL HIGHLIGHTS. This section provides a summary of selected financial results over a number of years. You may find two schedules providing highlights: one brief summary near the front of the annual report and a more detailed summary in the financial section. This second section may be called Five-Year Summary of Selected Financial Data. Note its page number here.

Page # ______

THE CHAIRMANS LETTER. This letter provides the chairmans overview of the past year and developments which will affect the next year. Note its page number here.

Page # ______

THE COMPANY, ITS PRODUCTS, ITS EMPLOYEES. This section may contain a number of color photographs and will highlight the products and accomplishments of the company. Note its page number here.

Page # ______

MANAGEMENT DISCUSSION AND ANALYSIS. This section discusses operating results, industries in which the company operates, financing and investing activities, significant events, trends and developments. Note its page number here.

Page # ______

THE FINANCIAL STATEMENTS AND NOTES TO THE FINANCIAL STATEMENTS. This section contains the balance sheet (also called statement of financial position), income statement, statement of cash flows, and statement of stockholders equity. The accompanying notes, as indicated at the bottom of each of the above statements, are an integral part of the financial statements. The financial statements cannot be understood without reference to the notes. Consequently, the financial statements AND accompanying notes will be the focus of this entire project. Note the page number of each of these financial statements.

Balance Sheet _____

Income Statement _____

Statement of Cash Flows _____

Statement of Stockholders Equity _____

Identify the number of the note and its page number for the following items:

Summary of significant accounting policies Note # ____ Page _____

Inventories Note # ____ Page _____

Plant assets Note # ____ Page _____

Long-term debt Note # ____ Page _____

Employee benefit plans Note # ____ Page _____

Commitments and contingencies Note # ____ Page _____

Other notes

Title of note ______________ Note # ____ Page _____

MANAGEMENT REPORT ON INTERNAL CONTROL Page _____
THE INDEPENDENT AUDITORS REPORT:

REPORT ON INTERNAL CONTROL Page _____

REPORT ON THE FINANCIAL STATEMENTS Page _____

REVIEW THE CHAIRMANS LETTER TO THE SHAREHOLDERS. Page _____

Summarize the major points made in the letter. (This make take several paragraphs.)

Locate the management report(s) and the independent auditors report(s). Answer the following:
1. Who is responsible for the preparation and integrity of the financial statements?
2. Does the company maintain a system of internal controls? Why?
3. What is the purpose of the companys audit committee?
4. What is the name of the independent public accountants (auditor)?
There are two independent auditors reports. (1) a report on internal control, and (2) a report on the financial statements. The following questions relate to the auditors report on the financial statement audit.
1. What is the auditors responsibility?
2. What is the purpose of an audit?
3. Summarize the auditors opinion.

Part 4 Complete a Written Report (100 pts)

The report should be no less than 10 pages, double-spaced and include:

Your paper should be structured as follows:

1 Introduction and company background.

2 Discuss the accounting methods chosen by the company and the impact of those choices on the financial statements. These choices likely will include the companys inventory-costing and depreciation methods as well as other methods you consider significant.

3 Assess the companys liquidity. Be sure to fully identify what caused certain trends and changes in patterns.

4 Discuss the companys activity ratios. Be sure to fully identify what caused certain trends and changes in patterns.

5 Discuss the companys profitability. Be sure to fully identify what caused certain trends and changes in patterns.

6 Discuss the companys coverage and solvency ratios. Be sure to fully identify what caused certain trends and changes in patterns.

7 Identify and discuss significant cash flows. Be sure to fully identify what caused certain trends and changes in patterns.

8 Identify any other information which you consider appropriate in coming to a decision, including dividend patterns and price-earnings ratios. Be sure to fully identify what caused certain trends and changes in patterns.

9 Overall conclusion about the financial health of the company. (Ultimately answer the question that if you were a creditor or investor, would you loan money to or invest in this company?) Fully explain the reasons for your recommendation.