Briefly describe your main” company and its business (e.g. the background of the company, its lines of business, major products, countries in which it operates, etc.)

Briefly describe your main” company and its business (e.g. the background of the company, its lines of business, major products, countries in which it operates, etc.). REQUIREMENTS 1 THROUGH 6 SHOULD BE COMPLETED FOR YOUR MAIN COMPANY ONLY.

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1.     

BACKGROUND:

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Briefly describe your main company and its business (e.g. the background of the company, its lines of business, major products, countries in which it operates, etc.).

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Describe the business environment in which your company operates (e.g. the industry in which it operates, its competitors, the political climate, litigation, risks, and any other issues addressed by the Form10-K). 

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2.     

INCOME STATEMENT:

  • Describe the major sources of revenues, expenses, gains, and losses reported.
  • Calculate the percentage change in each account from the previous year to the current year and comment on any significant changes.
  • Explain any significant unusual or nonrecurring items, including what caused them and the likelihood that the items will occur again in the future.

 
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3.     

BALANCE SHEET:

  • Describe the major types of assets, liabilities, and equities reported.
  • Calculate the percentage change in each account from the previous year to the current year and comment on any significant changes.

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4.     

STATEMENT OF CASH FLOWS:

  • Identify the major adjustments to net income that were made to arrive at net cash flow from operating activities.
  • Discuss the major inflows and outflows of cash for investing activities and financing activities.
  • Calculate the percentage change in the total net cash flows for each of the three categories of activities from the previous year to the current year and comment on any significant changes.
  • Describe any noncash investing and financing activities found.

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5.     

AUDIT REPORT:

  • Identify the public accounting firm that audited the company’s financial statements.
  • What does the opinion of the independent auditor tell you about the company’s financial statements?
  • Briefly explain the meaning of the audit report, and the assurance provided, if any.

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6.     

 REVENUE RECOGNITION PRINCIPLES:

  • Discuss the types of revenue transactions (e.g., cash customers, credit customers, advance customer orders, etc.) in which the company engages and the revenue recognition method(s) used.
  • Comment on the company’s revenue by segment. Which segment(s) of the company generate the greatest revenue?

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7.     

RATIO ANALYSIS:

  • Compute the following ratios for the main company, competitor, and industry:

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Current Ratio,  Quick Ratio, Liabilities-to-Equity Ratio, Times Interest Earned Ratio, Gross Margin,  Operating Margin, Profit Margin, Asset Turnover, Return on Assets, Return on Equity

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Based on your ratios, discuss your main company’s liquidity, solvency, and profitability compared to the competitor and industry.

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Briefly describe your main” company and its business (e.g. the background of the company, its lines of business, major products, countries in which it operates, etc.)

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