Resources needed: 1. A windows PC with Microsoft Access or Excel installed.

Scenario: Pick one e-commerce company on the Internetfor example, Ashford, Yahoo, or Priceline. Study the web pages that describe the company and explain its purpose and structure. Use the web to find articles that comment on the company. Then visit the Securities and Exchange Commissions website at www.sec.gov to access the companys 10-K (annual report) form showing income statements and balance sheets. Select only the sections of the 10-K form containing the desired portions of financial statements that you need to examine and download them into your spreadsheet.

Downloading the Data into a Spreadsheet: Use the Convert Text to Columns Wizard in your spreadsheet software to arrange the 10-K data you downloaded into spreadsheet columns and rows. From the Excel menu, select Data and then select the Text to Columns option. The software brings up a Wizard to convert the imported text into spreadsheet columns. Although you can decide to create line breaks, it may be easiest to accept the default settings (Fixed Width, General format) and then adjust column widths after the Wizard has arranged the data in spreadsheet columns.

Financial Statements: Financial statements are used to evaluate the performance of a business and diagnose its strengths and weaknesses. The two primary financial statements are income statements and balance sheets. The income statement, also called an operating statement or profit and loss statement, shows the income and expenses of a firm over a period of time, such as a year, a quarter, or a month. Gross profit is calculated by subtracting the cost of goods sold from revenues, or sales. The gross margin is calculated by dividing gross profit by revenues (or sales). Net profit (or loss) is calculated by subtracting all other expenses, including operating expenses and income taxes from gross profit. Operating expenses are all business costs (such as expenditures for sales and marketing, general and administrative expenditures, and depreciation) other than those included in the cost of goods sold. Net margins are calculated by dividing net profit (or loss) by revenues (or sales).

A balance sheet provides a snapshot of a companys financial assets and liabilities on a given date, usually the close of an accounting period. It lists what material and intangible assets the business owns and what money the business owes either to its creditors (liabilities) or to its owners (shareholders equity, also known as net worth). At any given time, a businesss assets equal the sum of its liabilities plus its net worth. Current assets include cash, securities, accounts receivable, or other investments that are likely to be converted into cash within one year. Liabilities are outstanding obligations of the firm. Current liabilities are debts that are due within one year. Long-term debt consists of liabilities that are not due until after a year or more. If too much debt has been used to finance the firms operations, problems may arise in meeting future interest payments and repaying outstanding loans. By examining a series of balance sheets, one can identify and analyze trends in the financial strength of a business.

Create simplified spreadsheets of the companys balance sheets and income statements for the past three years.

Is the company a dot-com success, borderline business, or failure?

What information provides the basis of your decision? Why? When answering these questions, pay special attention to the companys three-year trends in revenues, costs of sales, gross margins, operating expenses, and net margins.

Create an outline and include it in this document that will be the basis for a PowerPoint presentation to be created. Do not create the PowerPoint until you are assigned it and given a template for the presentation. Your outline should include the following:

o A description of the company to include

Its history

Market(s) it operates in

Who are its major competitors?

Geographic Location(s)

Its structure and purpose

College published articles to support this information

o Analyze the financial reports you gathered and report on:

Income over the 3 years you downloaded

How does this compare with the market they operate in?

How does their performance compare to the market that their stock is traded in? (if they are traded on the DOW how did the DOW perform and how did the company perform?)

Give an analysis of net revenue over the 3 years

o Is the company a dot-com success, borderline business, or failure?

o What information provides the basis of your decision? Why?