Prompt: Obtain the most recent annual report contained in the Form 10-K for a service company and a merchandising company either from an internet search of the company's website, or from the Securities and Exchange Commission's (SEC's) Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. (A publicly traded company is required to file a Form 10-K with the SEC annually.

1.Compare and contrast the financial statements for the companies for the most current year for the following items:

A. Contents of the balance sheet, income statement.

B. The profit and liquidity ratios. Refer to the ratios. Calculate and explain all ratios for each of the businesses. Explain the effect of inventory on the ratios of the merchandising company. Review the footnote (disclosure) related to inventory. Describe the contents of inventory footnote.

C. Which set of financial statements are most complex? Defend your opinion.

D. Based on your analysis and review of the two companies, in which company would you most likely invest? Defend your choice.

WWW.SEC.GOV

EDGAR system - MICROSOFT CORP (Filer) CIK: 0000789019

vs

EDGAR system - NETFLIX INC (Filer) CIK: 0001065280

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NETFLIX INC (Filer) CIK: 0001065280