Accounting Financial Statement Analysis Assignment
Part I - General Information Contents
How to Read Annual Reports: http://www.ibm.com/investor/help/reports/index.html?tab=tab_BB
Read the information provided above and answer the following questions:
1. What are the optional and required (by SEC, Securities & Exchange Committee) elements required in an annual report?
2. Describe the contents of the Management Discussion and Auditor's Report.
Download PepsiCo 2015 Annual Report from Sakai and answer following questions:
A. Management's Discussion and Analysis (MD&A)
Identify two primary drivers/issues that explain current and future results of operations discussed in the MD&A. For example, the gross profit percentage increased because of improved buyer/supplier relationship resulting in greater overall operating performance.
B. Independent Auditor's Report
a. Who was the company's auditor and where is it located?
b. What is responsibility of the auditor?
c. Who is responsible for the preparation of and information within the company's financial statement?
d. The audit was conducted in accordance with what?
e. What was the opinion of the auditor?
Part II - Financial Data
Use Excel or Table function in MS Word to create a table for every data that you used in your analyses and the page number where they can be located. For example:
|
Data
|
Page Number
|
|
Net Revenue
|
63
|
|
Accounts Receivable
|
98
|
You may use Table function in Word or Excel for data analysis.
C. Trend Analysis:
a. Make a 3-year trend analysis, using 2013 as the base year, of [1] net sales and [2] net income.
b. Comment on the significance of the trend analysis results.
D. Ratios Analysis (Include Formulas):
a. Compute for 2015 and 2014 the [1] profit margin, [2] asset turnover, [3] return on assets, and [4] return on common stockholders' equity. Comment on PepsiCo's profitability.
b. Compute for 2015 and 2014 the [1] debt to total assets and [2] times interests earned ratio. How would you evaluate PepsiCo's long-term solvency?
E. Other Resources:
a. Use the internet to search for THREE other resources that may assist you in analyzing PepsiCo's financial statements.
Submit a hard copy (printout) of the homepage (1st page only), including its URL (only the homepage). State the reasons that they were selected.
b. For each of the sources, state how you would use the information obtained to analyze the PepsiCo's financial statements.
c. State whether the additional information confirms or contradicts your previous assessments.
F. Based on the information collected and analyses, state your reasons why a potential should / should not invest in PepsiCo. Be specific.