Choosing a Company

| November 17, 2017
 

The purpose of The Financial Reporting Project is to apply the lessons of your accounting course to a real company. You will discover how the issues, topics, practices and procedures described in your textbook actually affect a company’s financial reports. The first step is to choose a company that you think you will find interesting and that you want to know more about. Choose carefully because you will work with this company on several assignments this term. Be sure to choose a publicly-held U.S. company so that its financial information will be readily available. (Publicly-held means that its stock is traded on a stock exchange.) Your professor may give you additional guidelines on choosing a firm.

IDENTIFYING COMPANIES FROM WHICH TO CHOOSE:

Recognizing that your professor may have placed some limitations on your choice, here are some possible ways to go about identifying companies from which to choose.

1. You might first want to choose an industry that interests you. For example, a specific industry might be appealing because:

a. Someone you know works in that industry or perhaps you have worked in a particular industry that you would like to learn more about.

b. A company in that industry is located in your hometown or in a nearby location.

c. You regularly purchase products from that industry (e.g., textbooks or beverages).

d. The industry might be one that could provide employment opportunities after graduation.

e. The industry has been in the news lately, and you are interested in being better informed about the issues that were raised.

2. A good place to start is in your school’s library. Following are five sources that provide information about many industries and specific information about individual firms in those industries.

a. Forbes , a bi-weekly business magazine published by Forbes, Inc. Its “Annual Report on American Industry” appears in the first January issue each year. It includes brief descriptions of 31 major industries and ranks industries and more than 1,000 leading companies by profits, growth, and stock market performance. Under each industry heading are listed the leading companies in that industry.

b. Value Line Investment Survey , published by Value Line, Inc. This service is updated weekly and comes in three parts. The front page of Part 1 (“Summary & Index”) lists about 100 industry categories along with the page number where information on each industry can be found in Part 3 . In Part 3 you will find the industry information as well as specific information about each company in each industry.

c. Standard & Poor’s Industry Surveys , published by Standard & Poor’s, Inc. This two-volume document is published every quarter and covers dozens of industries and hundreds of companies. In the front part of each volume you will find a section titled the “Earnings Supplement.” This section lists all the industry categories and each of the companies within each industry.

d. Fortune , a bi-weekly business magazine published by Time, Inc. Its annual listing of the 500 largest firms in the United States is referred to as the Fortune 500 and is probably the most widely cited listing of this type. The Fortune 500 usually is in the mid-April edition.

e. Standard Industrial Classification Manual , published by the U.S. Government Office of Management & Budget . This manual organizes all businesses and industries in the United States into four-digit SIC codes. In the back of the volume is an alphabetical index of industry categories with the SIC code for each category. The front of the manual is a detailed description of each industry category. Use this manual to select an industry and its four-digit SIC code. After selecting an industry, go to the Million Dollar Directory , published by Dun & Bradstreet, Inc . The directory is a series of five volumes; look for the one labeled “Series Cross-Reference by Industry.” This volume is organized by SIC code numbers. You will find many companies for whatever SIC code you have chosen along with each firm’s mailing address and telephone number. {This information will be handy for Assignment 1C.)

COMPLETING THE ASSIGNMENT:

1. What is the name of the company you have chosen?

2. Which industry category does your firm represent?

3. Write several paragraphs describing how (and why) you chose the firm you did. Did you use any of the resources listed earlier in this assignment, or the Internet? Were they easy to use? Hard to use? Which one(s) would you recommend to friends if they had to complete this assignment? Discuss.

NOTE: Please think and plan carefully before writing. Readability, spelling, organization, grammar, and sentence structure will all be considered in grading your response.

Assignment 1C

Obtaining Financial Statements

Most future assignments will be based on information contained in your company’s Annual Report, its SEC Form 10-K, and its proxy statement. In this assignment you are to contact your assigned (or chosen) company to request the most recent version of those items that is available.

The Annual Report is a document that must be distributed to all shareholders every year. It contains the firm’s financial statements as well as a variety of other required and optional information. Often, it is a slick and glossy publication with color pictures of the executives, company facilities, and products. The SEC Form 10-K is the version of the annual report that must be filed annually with the Securities and Exchange Commission (an agency of the federal government in Washington, D.C.). When you receive your firm’s Annual Report and SEC 10-K you will notice that the two documents have many similarities but that they also have some striking differences.

The proxy statement is a document describing matters that will be discussed or voted on at the annual stockholders’ meeting. It is also the device by which management of the corporation solicits your authorization (proxy) to vote your shares on its behalf. Of greatest interest, perhaps, proxy statements must provide detailed information about compensation of key executive personnel. (Ever wonder how much money the top executives of a large corporation are paid? Here’s your chance to find out.)

COMPLETING THE ASSIGNMENT:

1. Contact your company by telephone, letter, or email. You will need to go to your university library, community public library, or the Internet to obtain the mailing address, email address, or telephone number. The address, and usually the phone number, can be obtained from the following sources:

a. Directory of Corporate Affiliations National Register Publishing Co.

b. Million Dollar Directory Dun & Bradstreet

c. Q-File Q-Data Corporation

d. Reference Book of Corporate Management: America’s Corporate Leaders Marketing Services, Inc.

2. The following hints will help you carry out this assignment.

a. Companies usually have an Office of Investor Relations or Shareholder Relations. Write to, or telephone, that office. If your company has an Internet homepage, you may be able to send an email request directly.

b. Explain that you are an accounting student at Clark Atlanta University and that as part of a class assignment this term you will be studying the firm and its financial information.

c. Request a copy of the firm’s most recent Annual Report, most recent SEC Form 10-K, and its most recent Proxy Statement. Be sure to tell them how much you appreciate their assistance. A little gratitude goes a long way in smoothing these requests. (Actually, most firms are very happy to provide these documents. They tend to think of you either as a potential investor, potential customer, or both. At minimum, it’s usually great public relations for a firm to have college students interested in it.)

d. Provide an exact mailing address. These documents are very important to you, and you do not want to risk having them mishandled because of a vague address.

3. Record the following information regarding your request.

a. Post office address or email address of the firm (if you sent a letter orĀ· email):

b. Date of request for documents:

c. Method of making the request (e.g., telephone, fax, letter, email):

d. Phone number of firm (if you telephoned or faxed):

SAMPLE LETTER:

If you prefer to write a letter, it could be similar to the following:

(Your Name and Address)

(Today’s Date)

Investor Relations Department

Little Tot Toy Corporation

3652 Playtime Boulevard

Phoenix, Arizona 00000

Director of Investor Relations:

I am an accounting student at Clark Atlanta University. As part of a class assignment this term all students will be examining and analyzing the financial reports of a major corporation.

I have chosen your firm and would like to study the financial reports of your company as part of my class assignment. Please assist me by sending me a copy of your most recent Annual Report, most recent SEC 10-K, and most recent Proxy Statement.

Thank you very much for your help.

Sincerely,

(Type your name on this line and put your signature just above it.)

5

Get a 5 % discount on an order above $ 150
Use the following coupon code :
2018DISC
U.S. healthcare system assignment
Research paper writing help

Category: Completed Assignments

Our Services:
Order a customized paper today!