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ACCT 240 Principles of Financial Accounting – Fall 2015

Financial Reporting Project

Interpreting financial statements and related disclosures in companies’ annual reports is one of

the major goals of this course. Every student should select one publicly traded U.S. firm to

analyze throughout the course and prepare a report at the end of the semester. Please do not

choose financial or utility firms because their financial statements may be special. Companies’

annual reports can be accessed through SEC’s EDGAR system and here is the link for it:

http://www.sec.gov/edgar/searchedgar/companysearch.html. Once you select your firm, post a

thread on Blackboard, so others will not choose the same firm. There are altogether eight tasks

related to the project.

1. Write an overview of the company, including the company’s business, the industry the company operates in and the main competitors of the company.

2. What is the most recent fiscal year end for the company’s Balance Sheet? How much is the company’s total assets and how much is total revenue for the most recent year end?

3. Find one footnote for each of the following and describe its contents in brief: a. An accounting rule applied in the company's statements. b. Additional detail about a reported financial statement number. c. Relevant financial information but with no number reported in the financial

statements.

4. Using electronic sources, find the earnings announcement for the company’s fourth quarter of the most recent year. When is it dated and how does that date compare to the balance

sheet date? What is discussed in that earnings announcement (please be concise)?

5. Using electronic sources, find the most recent recommendations by analysts about the company’s stock. On average, do analysts recommend “buy” or “sell” for the company’s

stock?

6. Ratio analysis: a. What does the return on total assets ratio measure in general? b. Compute the ROA ratio for the last three years. What do your results suggest

about the company?

c. Compute the ROA ratio of a main competitor of the company for the most recent year. What do your results suggest about the company?

7. Use the ROA profit driver analysis to determine the cause(s) of any differences in the ROA ratio between the company and its competitor.

8. Summarize the positives and negatives about the company from the findings in the previous seven tasks and comment on the financial condition of the company.

The project reports should be highly professional and must be presented in a form that

would be suitable for submission to a client. In addition, the report should be concisely

written and the complete report should be no longer than 4 pages [including tables and charts].

You can consult with Kogod Center for Business Communication to get advice on best

practices on report preparation. The project will be evaluated based on four aspects --- data

accuracy, data interpretation, presentation and organization of the report and the appropriateness

of the conclusion.

ACCT 240 Principles of Financial Accounting – Fall 2015

Financial Reporting Project – GRADING RUBRIC

STUDENT NAME

______________________________________

Maximum

Points

Points

Earned

1. Clearly described the background information of the company.

10

2. Correctly identified the fiscal year end, total assets and total revenue. 5

3.a Found one footnote related to an accounting rule applied in the

company's statements, and described its contents in brief.

5

3.b. Found one footnote related to an additional detail about a reported

financial statement number, and described its contents in brief.

5

3.c. Found one footnote related to relevant financial information but with

no number reported in the financial statements, and described its

contents in brief.

5

4. Found one article reporting the company's 4 th

quarter earnings

announcement. Identified when it was dated and noted how that date

compared to the balance sheet date and concisely described the

contents of the earnings announcement.

15

5. Found analysts' recommendation.

5

6.a. Described what the return on total assets ratio measures in general. 5

6.b. Accurately computed the ROA ratio for the last three years and

described what the results suggest about the selected company.

10

6.c. Accurately computed the ROA ratio for the competitor and

described what the results suggest about the selected company.

10

7. Used the ROA profit driver analysis and determined the cause(s) of

any differences in the ROA ratio between the company and its

competitor.

10

8. Appropriately summarized the key findings. 10

9. The report is free of typos. 5

TOTAL POINTS

100