The world of business has changed significantly over the last twenty years. Where once it was unique to operate internationally, it is now much more commonplace. Many U.S. Companies are either moving overseas or moving operations overseas and many international companies are moving operations into the United States.
Select an industry, which you will analyze. Obtain the annual reports of four companies. The companies should be picked as follows:
1) One company should be a foreign company (Headquarters) that does not have operations in the United States.
AXA - French top insurance company
2) One company should be a foreign company (Headquarters) that maintains operations in the United States.
Wawanisa- Canadian insurance company, Service office locates in San Diego
3) One company should be a United States company (Headquarters) with operations in a foreign country.
State Farm- In Fortune 500, operates in Canada and Mexico
4) One company should be a United States company (Headquarters) with no foreign operations.
ALL STATE - U.S based only
Read and analyze the reports in preparation for answering the given problems. The paper must be a collaboration involving all group members.
1) Analyze the operations of each company. How is the company doing in this present economic environment? Is the world economy affecting the company? How?
2) Compare the format of the financial statements. What are the main similarities and differences? Why do these differences exist?
3) Compare the footnote summarizing the accounting policies followed by the company (usually the first footnote to the financial statements) in the most recent annual reports. Identify any differences in the accounting principles employed by the companies. What effect do such differences have on their financial position, results of operations, and cash flows? Is one company more conservative or liberal than the other in choosing its accounting principles? Why do you think the difference(s) exist? Also descrbe any accounting principle change that occurred during the period covered by the financial statements. Was it a mandatory or elective change?
4) Compare the total disclosure and information content of the financial statements. Critique the total presentation and the detailed disclosures. Why are the reports different? Are the financial statements simple or difficult to read? What are the unanswered problems in each of the financial statements?
5) Which accounting principles have the biggest impact on the financial statements of companies in this industry and which have the least impact? Why? Will any principles influence the financial statements of one company any more or less than the other? Why?
You are to make the report as if you are a team of analysts at an investment company interested in international investments in your selected industry. As part of your report, give a background on your selected industry and the main players and markets around the world. The project is to be a single, coordinated effort. It must not be several reports, written by individuals, stapled together.