SCENARIO: You are a new hire for a major corporation completing your eight-week rotation relating to accounting, financial reporting, budgeting, cost control, and profit maximization. As part of your rotation you are learning how accounting information is used by managers throughout the organization to make managerial decisions. This report will address the below topics, providing senior management a report introducing, explaining, and providing analysis of the financial reports. Assume senior management does not understand basic accounting concepts and unable to read and interpret the reports without your assistance. Incorporate and explain accounting concepts learned within the course material (readings and discussions) and provide financial analysis as completed within the SEC10K discussion posts.
REQUIREMENT: Prepare a report for your chosen corporation’s senior managers to interpret and explain the SEC10K financial reports. The report should be one to two full in pages in length: single spaced, 12 pt. font, one-inch margins, and in your own words. Make note of the grading rubric which requires you to address project questions, display critical thinking, analysis, research, application of course concepts, write in your own words, and demonstrate a high degree of effective communication (i.e., formal business writing with proper grammar and punctuation).
The following are concepts you should incorporate for discussion within your report:
Review the financial statements as whole, including the Notes to the Financial Statements to learn more about your company. Discuss types of information contained with and the reason for the incorporation of financial statement footnotes.
Review the Statement of Comprehensive Income. What items are displayed in Other Comprehensive Income? What is the importance of providing this financial report?
Does your company own treasury stock (sometimes called “repurchase of stock”) in the owners’ equity section (Statement of Retained Earnings)? Is this value increasing or decreasing? Consider the journal entry approach to the purchase of treasury stock. Treasury stock is displayed on the retained earnings statement/balance sheet as a negative value in owners’ equity. Explain treasury stock, and why treasury stock decreases stockholders equity. Why would a company purchase Treasury Stock? (Hint: Review the www.principlesofaccounting.com website for Treasury Stock concepts. You can list the reasons in an enumerated list.)