Instructions
Financial Accounting
Reading (Required)
• http://www.baruch.cuny.edu/tutorials/statements/
• The attached file 2016 week 2 Example Southwest Airlines
• The Power Point (Financial Statements R-2.ppt) should be very helpful
The Southwest example is included to show what can be learned from Financial statements. You will not use that format for your answers to this
assignment. Per the assignment guidelines, all calculations must be shown in an Excel file. Your responses should show that you have read and
understood the required readings, links and attached files – Provide appropriate citations and references.
Assignment:
You should answer all of the questions listed below as they relate to the financial statements of any U.S. public company of your choice in its
latest annual report. Please use the Securities and Exchange Commission web site as your primary source for financial statements. All publicly
traded U S companies have their annual reports called the 10-K available through the Securities and Exchange Commission web site.
http://www.sec.gov/
Instructions for use of the site are as follows: About half way down the home page is a box titled Search EDGAR, free access to over 21
million filings. Enter the company name or ticker symbol. That brings up a page called EDGAR Search Results. In the line “filter results”
enter “10-K” in filing type and hit search. That will bring up recent company annual reports. Note: You have a choice of “Documents” or
“Interactive Data.” Both contain all the information. “Interactive Data” uses Excel and provides the best access to information for questions
1, 2, and 3. “Documents” provides information that is easy to read for questions 4 through 8. After you click on Documents, click on the red
letters and numbers to the right of the “10-K” heading.
Also you can find the financial statements of any U.S. public company by visiting Morningstar, Yahoo Finance or MSN Money, and using the stock
market symbol for your chosen company (which can be looked up on Morningstar, Yahoo Finance or MSN Money). Please be aware that sometimes
these services omit some numbers in order to fit their preferred formats. Many companies have links to the Annual Report as filed with the SEC.
It can be found on the Investor relations page of the company web site.
1) What 3 items of important information does the income statement reveal about the financial performance of the company over the last three
years?
2) What 3 items of important information does the balance sheet reveal about the financial position of the company over the last two years?
3) Can you identify the major sources of funding used by the company from the information presented in the company’s annual report? Please
look at the Statement of Cash Flows, formerly called the Source and Uses of Funds Statement.
4) Who is responsible for:
a) the issuance, and
b) the content
of the company financial statements? (Note: this information may be difficult to find. Look for statements by management and the independent
auditing firm.)
5) What assurance, if any, is there that the financial statements are in compliance with GAAP, and are free of material misstatements?
6) Of what use, if any, are the notes to the financial statements? Give an example of something learned from the footnotes of your company.
7) What can you learn from the Business Section of the 10-K? Give two facts learn from reading this section.
8) What can you learn from the Management Discussion and Analysis of Financial Condition and Results of Operations (MD&A)? Give two facts
learned from reading this section.
*************Quantitative analysis tied to the financial statement concepts will add value to your work.