You have done an excellent job for your company. The executives have been considering to promote you to a position with more responsibilities and higher pay. Whether you will have this promotion depends on your performance for this project the executives assign you to do. The specific tasks are:

1. Collect the most recent 10-K, including financial statements, their footnotes, and management discussion for one of the following primary firms: (Note: DONT print out 10-K.) a. Amgen Inc. (ticker: AMGN) b. Texas Instruments Inc (ticker: TXN) Then, you need to find one major competitor of the firm you select above, and also download its most recent 10-K. You need to explain why you select this firm as the competitor for your project study. In addition, you need to collect industrial benchmarks or ratios for the ratios you need to calculate (See 3 below), and to investigate what formulas from which these benchmarks are calculated. (5 points)

2. Summarize the management discussion and analysis. Pay close attention to the adjective terms in the description they use to excuse themselves from unsatisfactory performance. Do you think that the firm discloses its financial situation sufficiently? (15 points)

3. For the two companies (the primary and the competitor), do numerical analyses on: their common-size (vertical and horizontal) ratios, year-to-year ratios, liquidity of short-term assets and related debt-paying, activity efficiency, long-term debt-paying ability or coverage, and the firms profitability. Note: Do as many ratios listed in the Appendix A of Chapter 24 as you can. (25 points)

4. Comments on findings of the primary firm based on the analytical results in Item 3 above, in comparison with those of the competitor and industrial benchmarks. (15 points)

5. Comment on the accounting treatments of the primary firms. To do this, you need to read management discussion and analysis and footnotes carefully. In general, your comments should concentrate on whether the firms are conservative or not for account classification and estimates, and whether there are accounting policy changes and why. If the firms use different accounting methods, such as for depreciation and amortization, you need to specify them. Your evaluation should be based upon the criteria we have learned in this course, such as those discussed in Chapter 24 and the accounting quality hierarchy. Particularly, concentrate on the following issues: (30 points)