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Chapter 1 WWW Cases Case 1 7 International Issues Many companies have a significant amount of sales in foreign markets Required Compare the current period sales and net income from U S an

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Chapter 1 WWW Cases Case 1 7 International Issues Many companies have a significant amount of sales in foreign markets Required Compare the current period sales and net income from U S an Powered By Docstoc
					Chapter 1 WWW Cases

Case 1-7 International Issues

Many companies have a significant amount of sales in foreign markets.

Required:
Compare the current period sales and net income from U.S. and non-U.S. sales for the
following companies. Note any significant differences between the companies. Financial
statements can be located on the company websites given. Which company has the largest
portion of its sales in the United States? Which has the largest portion of its profits in the
United States?

Company
Ford Motor Company
General Motors Corporation

Case 1-8 International Accounting Standards

Microsoft Corporation presents its income statement in a variety of formats using both the
currencies and the accounting practices of other countries in the “Analysis Tools” area of the
investor section of their website (www.microsoft.com/msft/tools.htm). Compare the U,S.,
Canadian, UK, and Australian income statements. What features of the non-U.S. statements do
you think are improvements on the U.S. statements? What features did you find to be confusing?

Financial Analysis Case

Each chapter contains a financial analysis case. For each of these cases, you will be asked to
apply some of the principles of financial analysis that were introduced in the various chapters.
For Chapter 1 the first assignment is to pick a company to analyze for the entire semester. It is
suggested that you choose a Fortune 500 manufacturing or merchandising company so that all of
the ratios discussed in subsequent chapters can be calculated.

Required:
After choosing your company, log onto the SEC Edgar Form Pick website
(http://www.sec.gov/edaux/formlynx.htm). Type your company name in the company name box and
find the latest 10-K report for the company you have selected. Answer the following questions:

a.   What is the company’s conformed name?
b.   What is the company’s standard industrial classification?
c.   What is the company’s state of incorporation?
d.   What is the company’s fiscal year-end?
e.   What is the company’s business address?
f.   What is the company’s telephone number?
g.   On which stock exchange(s) is the company’s stock listed?
h.   Summarize the company’s business operations as discussed on the Cover Page in part I of the
   company’s 10-K.
i. Who are the company’s major competitors? (Found under competitive position in part I.)
j. Choose two of the company’s competitors to use for comparative analysis purposes and print
   the latest 10-K reports for these two companies. You will need these reports for the cases in
   each of the remaining chapters.


Chapter 2 WWW Cases

Case 2-10 FASB Exposure Drafts and Emerging Issues

Visit the FASB's home page on the World Wide Web
(http://www.rutgers.edu/Accounting/raw/fasb/welcome.htm).

Required:
a. Review recently posted FASB Documents and Information to determine if any important new
   initiatives are being considered by the FASB.
b. What exposure drafts are currently outstanding?
c. What issues are being considered by the Emerging Issues Task Force?

Case 2-11 the FASB’s Mission and Processes

Visit the FASB's home page on the World Wide Web
(http://www.rutgers.edu/Accounting/raw/fasb/welcome.htm).

Review the “FASB Facts” section of its website. In particular, read through the sections “Facts
about FASB—Mission & Structure of the Board” and “FASAC—Financial Accounting
Standards Advisory Council.”

Required:
a. Summarize the mission of the FASB in one or two paragraphs. What do you think about the
   FASB’s mission? Is it too broad; is it too vague, do you think the mission is achievable?
b. How effective do you think the FASB’s processes are? Do you think they will focus on the
   right issues on a timely basis? Do you think that all relevant parties will be heard in their
   process?
c. Summarize the current membership of the FASAC including the group’s mix of gender and
   type of organization they represent. Do you think this group is adequately diverse in order to
   allow all relevant parties to be heard?

Case 2-12 FASB Recent Additions

Visit the FASB's home page on the World Wide Web (http://www.fasb.org/)
Required:
Review the “Recent Activity andNews” section of the FASB website. Pick two of the items
presented and (1) summarize the items and (2) provide your own opinion about the items and
how you think the FASB should handle any issues that are presented.
Case 2-13 Principles Based vs. Rule Based Accounting Standards

Required:
Discuss the issue of principles based vs. rule based accounting standards.

Case 2-14 International Accounting standards

Required:
Discuss the FASB-IASB international convergence project

Case 2-15 The Financial statement Presentation Project

Required:
Discuss the FASB-IASB financial statement presentation project.

Financial Analysis Case

Companies disclose the impact of new accounting pronouncements in the footnotes to their
financial statements (Usually in the Summary of Significant Accounting Policies).

Required:

   Search your company’s financial statements to determine the new accounting standards that
   affected their operations during the past year and summarize their effects.

Chapter 3 WWW Cases

Case 3-7 IASC Home Page

Log onto the World Wide Web and enter the International Accounting Standards Board's home
page.

Required:
a. What general categories of information are contained on the IASB's home page?
b. What current issues is the IASB reviewing?

Financial Analysis Case

GAAP vs. International Accounting Standards

Required:
Find a foreign company that is selling securities in the U.S. securities markets and comment on
the change in net income that was caused by changing from the company’s domestic accounting
standards to U.S. GAAP.
Chapter 4 WWW Cases

Case 4-9 Agency Theory

According to agency theory, the existence of debt imposes agency costs.

Required:
a. What are agency costs?
b. Explain why an increase in debt would increase agency costs and what the resulting effect
   would be for debt holders.
c. What strategy might debt holders utilize to counter potential adverse agency effects?

Case 4-10 Capital Asset Pricing Model

Log onto the World Wide Web and find three companies whose stocks are traded on the New
York Stock Exchange. Compute a beta for the three companies by comparing the movement in
their stock with the movement of Standard and Poor's 500 for five years. (For simplicity, track
the percentage stock returns and the percentage return for the index on the first day of each
quarter for the five-year period.) Hint: You can compute beta by using each of the company's
quarterly returns as the dependent variable and the index as the independent variable in a
regression analysis. Compare the betas of the three companies. What do these betas tell you
about the relative volatility of the three stocks? Next, compute the betas for the three companies
using the movement in the Dow Jones Industrials over the same period. Are the calculated betas
the same? Why? Finally, look the companies in an investor service such as Value Line or
Standard and Poor’s. What are the betas disclosed for the companies?

Financial Analysis Case

Compile information for your company to be used to perform a fundamental analysis (annual
reports, quarterly reports, management’s discussion and analysis and information from the
financial press).

Required:
a. Consult the Web to determine the current recommendation for your company’s stock from
   financial analysts. (A good source for this information is the Fortune Investor.)
b. Comment on the trend in earnings for your company and future expectations voiced by
   management.
c. Chart your company’s stock price for the past 12 months and compare it to changes in the
   Standard and Poor’s Index (Use another index if your company is in a specialized industry
   for which an index is published.)
d. Use the index chosen in part c to compute a beta for your company.



Chapter 5 WWW Cases
Case 5-9 Revenue Recognition

In the precious metal industry, revenue may be recognized when a precious metal is mined and
refined.

Required:
a. Describe how this practice differs from the way companies typically recognize revenue.
b. Explain the reasoning behind recognizing revenue when a precious metal is mined and
   refined.
c. Explain the reasoning behind the typical practice for recognizing revenue.


Required:
Summarize the authorized findings.

Case 5-10 Presentation of Comprehensive Income

Log on to the World Wide Web and search for the annual reports of three domestic "Fortune
1000" companies and three international companies.

Required:

   a. Review the income statements of the three domestic companies
         i.  Do the companies disclose items of other comprehensive income as defined by
             the FASB?
        ii.  For companies disclosing items of other comprehensive income, is a one
             statement or two statement approach used to disclose these items?
   b. Review the income statements of the three international companies. Do the companies
      present a Statement of Non-owner Movements in Equity?

Financial Analysis Case

Assess your company’s quality of earnings.

Required:

   a. Use the eight techniques outlined in the text.
   b. Assess the correlation between accounting income and economic income for your
      company.


Chapter 6 WWW Cases

Case 6-10 Objectives of Financial Statements
Discuss how a company’s primary financial statements are useful to potential investors who are
trying to decide whether to buy stock in the company. Support your discussion by citing
objectives outlined in the Conceptual Framework.

Case 6-11 Financial Analysis

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies.

Required:
a. Review the income statements for the three domestic companies and answer the following
   questions for the last reporting year:
   i. What income statement format does each company use?
   ii. What are the basic and diluted earnings per share for each company?
   iii. Have any of the companies disclosed accounting changes?
   iv. Have the companies reported any discontinued operations for the last year?
b. Review the income statements for the three domestic companies and answer the following
   questions for the last reporting year:
   i. Do the companies present the income statement in the format suggested in Presentation
        of Financial Statements?
   ii. What are the basic and diluted earnings per share for each company?
   iii. Have any of the companies disclosed accounting changes?
   iv. Have the companies reported any discontinued operations for the last year?

Financial Analysis Case

Assess investors’ comparative perceptions of the outlook for your company.

Required:
a. Compute the price/earnings ratio for your company and its two competitors for the last day of
   its latest fiscal year.
b. Comment on the implications of your company’s price/earnings ratio in comparison to its
   competitors’ and market averages.


Chapter 7 WWW Cases


Case 7-10 Assets, Liabilities, Gains and Losses

A company is required to report a liability in its balance sheet when it expects to lose a law suit
and the amount of the expected loss can be reasonably estimated. Conversely, a company is
prohibited from reporting a receivable in its balance sheet when it expects to win a lawsuit even
though it is probably and the amount of the expected gain can be reasonably estimated.

Required:
   a. Does the expected loss meet the definition of a liability found in the conceptual
      framework? Explain.
   b. Does the expected gain meet the definition of an asset found in the conceptual
      framework? Explain.
   c. Why do you think accountants treat these seemingly similar situations differently?
      Explain.

Case 7-11 Analysis of Financial Statements

Log on to the World Wide Web and search for the annual reports of three domestic "Fortune
1000" companies and three international companies (Consult the Preface for web sites of
companies or search for different companies)

Required:

   a. Review the balance sheets and statements of cash flows for the three domestic companies
      and answer the following questions for the last reporting year:
         i.  What are some of the measurement bases used by the companies to report their
             assets?
        ii.  Did the companies pay dividends for the last reporting year?
       iii. What method of reporting cash flows from operating activities did each of the
             companies use?
       iv.   What were the company's cash flow from operations? Did this differ substantially
             from the net income reported on the income statement? Why?
        v.   What were the company's major cash flows from investing and financing
             activities?
   b. Review the balance sheets and statements of cash flows for the three international
      companies and answer the following questions for the last reporting year:
         i.  What are some of the measurement bases used by the companies to report their
             assets?
        ii.  Did the companies pay dividends for the last reporting year?
       iii. Are the companies disclosing the information concerning their financial assets
             that is required under the provisions of IAS No. 32?
       iv.   What method of reporting cash flows from operating activities did each of the
             companies use?
        v.   What were the company's cash flow from operations? Did this differ substantially
             from the net income reported on the income statement? Why?
       vi.   What were the company's major cash flows from investing and financing
             activities?
      vii.   Do the companies follow U.S. GAAP or international standards in reporting cash
             flows from investing activities?

Case 7-12 Fair Value Measurements

Required:
Summarize SFAS No. 157 “Fair Value Measurements
Case 7-13 Presentation of Comprehensive Income

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies. (Consult the Preface for websites of companies or
search for different companies.)

Required:
a. Review the income statements of the three domestic companies:
    i. Do the companies disclose items of other comprehensive income as defined by the FASB?
    ii. For companies disclosing items of other comprehensive income, is a one-statement or two-
statement approach used to disclose these items?
b. Review the income statements of the three international companies. Do the companies present
     a Statement of Non-owner Movements in Equity?

Financial Analysis Case

Assess the financial position of your company in comparison to its competitors

Required:

   a. Compute the return on assets, profit margin and asset utilization rate for your company
      and its two competitors.
   b. Assess your company’s competitive financial position.
   c. Compute the free cash flow for your company and its two competitors
   d. Assess your company’s relative cash position and comment on its receipt and use of cash
      during the year.



Chapter 8 WWW Cases

Case 8-12 Accounting for Purchase Discounts

Companies record purchases of inventory on account having terms that allow cash discounts
under either the net method or the gross method. The net method is generally considered
theoretically sounder than the gross method.

Required:
Describe the advantages and disadvantages of both methods.

Case 8-13 Financial Analysis

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies.
Required:
a. Review the balance sheets for the three domestic companies and answer the following
   questions for the last reporting year:
   i. Do the companies disclose any short-term investments? If so, what method is used to
        account for these short-term investments?
   ii. What inventory cost flow methods are the companies using?
   iii. Compute the working capital for each of the companies.
b. Review the balance sheets for the three international companies and answer the following
   questions for the last reporting year:
   i. Do the companies separately disclose current assets and current liabilities?
   ii. Do the companies disclose any short-term investments? If so, what method is used to
        account for these short-term investments?
   iii. What inventory cost flow methods are the companies using?
   iv. Compute the working capital for each of the companies.
   v.
Financial Analysis Case

Evaluate your company’s working capital position.

Required:
a. Compute the following ratios for your company and its two competitors:
   i. Working capital
   ii. Current ratio
   iii. Acid test ratio
   iv. Cash flow from operations to current liabilities
   v. Accounts receivable turnover ratio
   vi. Days in receivables
   vii. Inventory turnover ratio
   viii. Average days in inventory
b. Assess the relative working capital position of your company.

Chapter 9 WWW Cases

Case 9-12 Impairment of Assets

Long-term fixed assets are written down when it is determined that they have been impaired.

Required:
a. When are assets considered impaired under current GAAP?
b. How are impairment losses measured under current GAAP?
c. Would it be more or less conservative to measure the loss using the recoverable amount to
   measure impairment losses? Explain.
d. Which would be more consistent with economic income: measuring impairment losses using
   the recoverable amount or the measurement required under current GAAP? Explain.

Case 9-13 Financial Analysis
Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies. Select at lease one domestic oil-producing
company. (Consult the Preface for websites of companies or search for different companies.)

Required:
a. For the domestic companies answer the following questions for the last reporting year:
   i. What items of property, plant and equipment do each of the companies disclose?
   ii. What depreciation methods do the companies use?
   iii. For the oil company, are the disclosure requirements contained in SFAS No. 69 being
        followed?
b. For the international companies answer the following questions for the last reporting year:
   i. What items of property, plant and equipment do each of the companies disclose?
   ii. What depreciation methods do the companies use? Do the companies disclose how they
        selected their depreciation methods?
   iii. Have any of the companies revalued their assets as allowed by IAS No. 16?
   iv. Have any of the companies changed depreciation methods as required under certain
        circumstances by IAS No. 16?

Financial Analysis Case

Assess your company’s utilization of long-term assets.

Required:
a. Comment on your company’s asset-replacement policy
b. How is your company’s asset-replacement policy impacting its return on assets ratio?
c. Compare your company’s asset utilization ratio with that of its two competitors.
d. What method of depreciation does your company use?
e. What depreciation method do your company’s two competitors use?


Chapter 10 WWW Cases

Case 10-10 Organization Costs

Newatit Company spent a substantial amount of money organizing and getting ready for
business. These costs are considered organization costs.

Required:
a. Does the incurrence of organization costs meet the definition of assets found in the
   Conceptual Framework? Explain.
b. If organization costs are assets, would they be considered intangible assets? Explain.
c. How should the cost incurred be matched against earnings under current GAAP?
d. Some theorists argue that organization costs should not be amortized. Defend this position.

Case 10-11 Financial Analysis
Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies. (Consult the Preface for websites of companies or
search for different companies.)

Required:
a. For the domestic companies answer the following questions for the last reporting year:
   i. Do the companies report any long-term investments? If so, are they classified as trading
        securities or held-to-maturity securities?
   ii. Do the companies disclose any intangible assets? If so, what categories of intangible
        assets are disclosed and what amortization period is being used?
   iii. Do the companies disclose any research and development expenses?
b. For the foreign companies answer the following questions for the last reporting year:
   i. Do the companies report any long-term investments? If so, what valuation basis is used
        by each company?
   ii. Do the companies disclose any intangible assets? If so, what categories of intangible
        assets are disclosed and what amortization period is being used?
   iii. Do any of the companies disclose "negative goodwill"?
   iv. Do the companies disclose any research and development expenses? If so, have any of
        the companies recorded development costs as assets?


Case 10-12 Analysis of Research and Development Activities

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies.

Required:
a. Use the approach developed by Gary Entwistle in the article on the webpage for Chapter 11
   to research the disclosure of research and development expenditures by corporations.
   Specifically, which of the following categories of information were disclosed?
   i. Inputs
   ii. Outputs
   iii. Future expenditures
   iv. Financing
   v. Accounting financial
   vi. Strategy
b. In which of the five categories of annual report location did the companies disclose research
   and development information?
c. Compare your results to those reported by the author.

Financial Analysis Case

Disclosure of investments and intangibles

Required:
a. Review the financial statements for your company to determine if they disclose any of the
   following:
   i. Trading securities
   ii. Available-for-sale securities
   iii. Held-to-maturity securities
   iv. Investments accounted for by the equity method
   v. Intangibles
b. Perform a similar analysis for your two competitor companies.

Chapter 11 WWW Cases


Case 11-11 Financial Analysis

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies. (Consult the Preface for websites of companies or
search for different companies.)

Required:
a. For the domestic companies answer the following questions for the last reporting year:
   i. What is the amount of long-term debt disclosed by each of the companies?
   ii. Do any of the companies’ debt instruments contain conversion provisions?
   iii. Do any of the companies disclose short-term obligations expected to be refinanced?
   iv. Do any of the companies disclose contingent liabilities? If so, have any been reported as
        current expenses?
   v. Have any of the companies engaged in derivative transactions? If so, what types?
b. For the international companies answer the following questions for the last reporting year:
   i. Are the companies disclosing the information about their financial liabilities that is
        required under the provisions of IAS No. 32?
   ii. What is the amount of long-term debt disclosed by each of the companies?
   iii. Do any of the company's debt instruments contain conversion provisions?
   iv. Do any of the companies disclose contingent liabilities? If so, have any been reported as
        current expenses?
   v. Have any of the companies engaged in derivative transactions? If so, what types?.

Financial Analysis Case

Evaluate the use of debt.

Required:
a. Calculate the following ratios:
   i. Long-term debt-to-assets ratio
   ii. Interest coverage ratio
   iii. Debt service coverage ratio
b. Calculate the same ratios for your competitor companies and comment on your company’s
   relative solvency and use of leverage
c. Review Item 7a in your company’s and its two competitors’ 10-K reports and summarize the
   companies’ disclosure of information on market risk.
d. Comment on your company’s comparative use of derivatives.

Chapter 12 WWW Cases

Case 12-8 The Impact of Changes in Rates on Deferred Tax Amounts

Explain the effect that changes in income tax rates have on income tax expense for companies
that have deferred income tax assets and for companies that have deferred income tax liabilities.


Case 12-9 Financial Analysis

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies. (Consult the Preface for websites of companies or
search for different companies.)

Required:
a. For the domestic companies answer the following questions for the last reporting year:
   i. Do the amounts for income tax expense and income tax payable differ? If so, review the
        footnotes to determine the reason for this difference.
   ii. Do the companies disclose either deferred tax assets or deferred tax liabilities?
   iii. Do any of the companies disclose net operating loss carrybacks or carryforwards?
b. For the foreign companies answer the following questions for the last reporting year:
   i. What method of accounting for interperiod tax timing differences are the companies
        using?
   ii. Do the amounts for income tax expense and income tax payable differ? If so, review the
        footnotes to determine the reason for this difference.
   iii. Do the companies disclose either deferred tax assets or deferred tax liabilities?
   iv. Do any of the companies disclose net operating loss carrybacks or carryforwards?

Case 12-10 FIN 48

Required:
Discuss the requirements of FIN No. 48 “Accounting for Uncertainty in Income Taxes—an
interpretation of FASB Statement No. 109”

Financial Analysis Case

Analyze income tax expense and income taxes payable.

Required:
a. Analyze your company’s provision for income taxes and income taxes payable including:
   i. The amount of income taxes that would have been paid at the statutory rate and the
       amount actually paid
   ii. Changes in the deferred tax asset and liability accounts
   iii. Changes (if any) in the amounts of income tax carrybacks and carryforwards
b. Conduct a similar analysis for your two competitor companies and discuss any differences
   you find.

Chapter 13 Cases

Case 13-9 Capital Leases as in Substance Purchases of Assets

Explain how a capital lease is in substance a purchase of an asset. Tie your explanation to the
Conceptual Framework’s definitions of assets and liabilities.

Case 13-10 Financial Analysis

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies. (Consult the Preface for websites of companies or
search for different companies.)

Required:
a. Review the financial statements for the three domestic companies and answer the following
   questions for the last reporting year:
   i. Do the companies disclose any capital leases of leased property? If so, are the disclosure
       requirements contained in SFAS No. 13 being followed?
   ii. Are any of the companies lessors in lease transactions? If so, do they use the sales-type
       or direct financing method to account for their lease transactions?
a. Review the financial statements for the three foreign companies and answer the following
   questions for the last reporting year:
   i. Do the companies disclose any financial leases of leased property?
   ii. Are any of the companies lessors in lease transactions? If so, how are they accounting
       for these transactions?

Financial Analysis Case

Use of leases

Required:
a. Review the financial statements of your company and its two competitors to determine if
   they are using leases as a part of their financing activities strategy.
b. Contrast your company’s leasing strategy with those of its competitors.

Chapter 14 WWW Cases

Case 14-7 Financial Analysis

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies.
Required:
a. Review the financial statements for the three domestic companies and answer the following
   questions for the last reporting year:
   i. Do the companies report any pension expense?
   ii. If so, do the companies have defined contribution or defined benefit pension plans?
   iii. Do the companies disclose any other expenses associated with postretirement benefits?
b. Review the financial statements for the three foreign companies and answer the following
   questions for the last reporting year:
   i. Do the companies report any pension expense?
   ii. If so, do the companies have defined contribution or defined benefit pension plans?
   iii. Do the companies disclose any other expenses associated with postretirement benefits

Financial Analysis Case

Analyze retirement provisions.

Required:
a. Review the financial statements of your company and its two competitors to determine if
   they disclose information on pension or other postretirement benefits.
b. Discuss any differences that you find.

Chapter 15 WWW Cases

Case 15-13 SFAS 123

On 1/1/x1, Dannon Corp granted to each of its top 5 executives, 1,000 options to purchase shares
of the corporation’s $10 par common stock @ $25 per share. On that date, the market price per
common share was $22. The options are exercisable on 1/1/x3. The exercise period ends 1/1/x5.


Management expects the executives to exercise their options on the first day they become
exercisable. The volatility of the stock price is determined to be .25 and the yield on bonds (risk
free rate) is 7%.
Required:
   a. Are the options considered compensatory under APB Opinion No. 25? Why or why not?
   b. What is the total amount of compensation expense under APB Opinion No. 25? Explain.
   c. Calculate the value, if any, of the options. Use Black-Scholes. (Hint, see the article by
      James R. Mountain at the end of the chapter. It’s easier if you use Excel as he did.)
   d. What is the total amount of compensation expense under current practice, as outlined in
      FASB ASC 718-10?
   e. Do you think the options have value? Explain. What do you believe the proper amount
      of expense should be? Why?
   f. Would your answer be different if the market price of the common shares were only $5?
   g. What are the assumptions underlying the Black-Scholes option pricing model?
   h. How are the Black-Sholes assumptions modified by FASB ASC 718-10 to make them
      apply to employee stock options? Explain why?

Case 15-14 Financial Analysis

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies. (Consult the Preface for websites of companies or
search for different companies.)

Required:
a. Review the financial statements for the three domestic companies and answer the following
   questions for the last reporting year:
   i. What components of stockholders' equity do each of the companies disclose?
   ii. Do the companies have preferred stock shares outstanding? If so, what special features
        do these shares contain?
   iii. Do any of the companies report treasury shares? If so, do the companies disclose the
        reason for reacquiring the shares?
   iv. Do the companies disclose any stock compensation plans? If so, are they reporting such
        plans under the fair value or intrinsic value methods? What was the value of
        compensation expense measured for any outstanding stock option plans?
b. Review the financial statements for the three foreign companies and answer the following
   questions for the last reporting year:
   i. What components of stockholders' equity do each of the companies disclose?
   ii. Do the companies have preferred stock shares outstanding? If so, what special features
        do these shares contain?
   iii. Do any of the companies report treasury shares? If so, do the companies disclose the
        reason for reacquiring @@@acquiring?@@@the shares?

Financial Analysis Case

Analyze the return to stockholders.

Required:
a. Calculate the following ratios:
   i. Return on common stockholders’ equity
   ii. Common stock earning leverage ratio
   iii. Financial structure ratio
b. Calculate the same ratios for your two competitor companies and discuss the relative
   performance of the three companies from the viewpoint of common stockholders.

Chapter 16 WWW Cases

Case 16-8 Financial Analysis

Log onto the World Wide Web and search for the annual reports of three domestic Fortune 1000
companies and three international companies. (Consult the Preface for websites of companies or
search for different companies.)

Required:
a. Review the financial statements for the three domestic companies and answer the following
   questions for the last reporting year:
   i. Have the companies issued a consolidated financial statement? If so, do they report
        goodwill? And, if so, over what period is goodwill being amortized?
   ii. Have the companies engaged in any foreign currency translation transactions?
   iii. Do the companies report segmental information?
b. Review the financial statements for the three foreign companies and answer the following
   questions for the last reporting year:
   i. Have the companies issued a consolidated financial statement? If so, do they report
        goodwill? And, if so, over what period is goodwill being amortized?
   ii. Have the companies engaged in any foreign currency translation transactions?
   iii. Do the companies report segmental information?


Financial Analysis Case

Disclosure of consolidated information

Required:
a. Review the financial statements of your company to determine:
   i. Is it a consolidated entity?
   ii. If so, what segmental information is disclosed?
   iii. Did the company experience any foreign currency gains or losses?
b. Conduct a similar analysis for your competitor companies.

Chapter 17 WWW Cases

Case 17-11 Securities and Exchange Commission

Log onto the World Wide Web and enter the SEC's home page (http://www.sec.gov).

Required:
What information is contained on the SEC's home page?

Financial Analysis Case

Disclosure of forward-looking information

Required:
a. Review the financial statements for your company to determine if they disclose any forward-
   looking information.
b. If so, is this information positive or negative?
c. Conduct a similar analysis for your two competitor companies.

				
DOCUMENT INFO
Description: Ford Motor Company Project Financial Statement document sample