The Annual Report Project (ARP) is intended to provide real-world ex of the accounting and financial reporting principles. Specific purposes of the project are as follows:
• To demonstrate types of financial statement formats used by American corporations.
• To enable you to learn where to find key financial information on your company.
• Provide practice in written communication of financial information, a skill which would be invaluable during professional career.
Basic Instructions
1. Choose a large publicly traded corporation and get a recent annual report (2011 or 2012, if possible).
2. Familiarize yourself with contents of annual report. You certainly don’t have to read it word for word—no one else does—but you must know where to find CEO’s narrative, auditor’s report, the financial statements, and notes to the financial statements.
3. prepare short narrative report which includes information listed in the next section. Your grade on the project would reflect my perception of how well you address each issue, so ensure that your explanations and/or opinions are complete and well founded.
4. Your report must be prepared on the word processor. The report must be neatly prepared and must observe general rules of good grammar, punctuation, and sentence structure. Your report must be no shorter than 2 and no longer than 4 single spaced pages. Points would be detracted for failure to these requirements.
The Annual Report Project must include three sections with the following information:
Section 1: Basic Corporate Information
a. Official name of corporation
b. Location of corporate charter and corporate headquarters
c. Primary product or service
d. Short corporate history
e. Major subsidiaries (if identified)
f. Name of CEO
g. Makeup of Board of Directors
Section 2: Company Financial Situation
a. Financial performance during past year
b. Factors affecting financial performance
c. Number of outstanding common shares at yearend
d. Two competitive strengths
e. Two competitive weaknesses
f. Name of independent auditing firm
Section 3: Selected Financial Data
a. Sales or net sales
b. Total assets
c. Cash flows from investing activities
d. Gross profit (if available)
e. Total liabilities
f. Cash flows from financing activities
g. Operating income
h. Total stockholders’ equity
i. Present ratio, ROA, and Net profit margin
j. Net income
k. Cash flows from operating activities