Individual Financial Accounting Assignment

Reading (Required)

  • The Power Point (Financial Statements R-2.ppt) It is below
  • The attached file 2016 week 2 Example Southwest Airlines

The Southwest example is included to show what can be learned from Financial statements. You will not use that format for your report in 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.

Learning Goals of this assignment:

1. Communication: You can communicate clearly in writing.

2. Critical Thinking: You can apply logical processes to formulate clear, defensible ideas based on the analysis of facts and ethical considerations.

3. Quantitative Reasoning: You can use mathematical information, operations, and quantitative analyses to solve problems and inform decision-making

5 Ethical and strategic leadership. You can lead the organization ethically and strategically.

7. Legal acumen. You can identify key legal concepts in the business environment and apply them to enhance effective management decisions and organizational operations.

10. Strategic Management of Financial Capital. You can plan, evaluate and manage the financial implications of the organization’s (global) operations.

Individual Assignment (8%):

You are the head of marketing for a hedge fund that is researching a new company to assess whether it represents a good potential for investment. You start your research with an analysis of the firm’s financial statements, in order to understand how well its operations are managed. Your fund has recently been blindsided by discovering that one of its recommended investment targets has been accused of unethical practices in its accounting processes and a failure to comply with regulations in its industry. Therefore, in addition to assessing the firm’s financial and operational health, you want to be sensitive to any evidence that the firm might be taking regulatory/legal and/or ethical “shortcuts.”

Your assignment is to do the research described below, plus any additional research you deem necessary to meet your objectives. You will write a formal report to your management that describes what you found, how you evaluate the firm’s financial and operational health, and whether there are any potential “red flags” that may suggest potential for legal or ethical concerns. Supported by your analysis, make your recommendation to management about investing in this firm. Your report should be approximately 8 – 10 pages,, and your Excel file should contain the data that you use to support your analysis.


To guide your research, you should, at a minimum, 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. These questions are guides to your research, and the data you gather are to be compiled into a final report, appropriately organized to support your recommendations.

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.

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.

If you work for a U.S. public company, you may want to use the financial statements of your company – but the choice is up to you.

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 learned 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.

9. Where might you identify any areas of potential ethical concerns? Give at least two examples of the kinds of ethical concerns that might arise from analysis of the company’s financial statements.

Once you have completed your research, including addressing the above questions, you will write a formal report to your management that details your research and supports your recommendations.

Formatting requirements for the written report:

  • Meaningful report title
  • Short Executive summary of no more than one page
  • Introduction with report purpose
  • Section headings helpful to the reader (ensuring that all 9 items of this assignment are addressed)
  • Conclusion with key “take-away” points repeated from report body
  • Reference list in APA format
  • Page numbers on all pages

Post your written report and supporting Excel file in your individual assignment folder by the due date.

When you submit your paper, your work will be evaluated using the competencies listed below. You can use the list below to self-check your work before submission.

  • 1.1 Organize document clearly in a manner that promotes understanding and meets the requirements of the assignment
  • 1.2 Develop coherent paragraphs or points so that each is internally unified and so that each functions as a part of the whole document
  • 1.3: Provide sufficient, correctly cited support that substantiates the writer’s ideas.
  • 1.4 Tailor communications to the audience.
  • 2.1 Identify and clearly explain the issue, question or problem under critical consideration.
  • 2.2 Locate and access sufficient information to investigate the issue or problem.
  • 2.3. Evaluate the information in a logical and organized manner to determine its value and relevance to the problem
  • 2.4 Consider and analyze information in context to the issue or problem.
  • 2.5. Develop well reasoned ideas, conclusions or decisions, checking them against relevant criteria and benchmarks.
  • 3.1 Identify numerical or mathematical information that is relevant in a problem or situation.
  • 3.4. Employ software applications and analytical tools to analyze, visualize and present data to inform decision-making.
  • 5.1. Develop constructive resolutions for ethical dilemmas based on application of ethical theories, principles and models.
  • 7.3. Analyze the implications of civil or criminal wrongs and of product or service liability laws, and make recommendations to support business decisions.
  • 10.2. Analyze financial statements to evaluate and optimize organizational performance.
  • 10.3. Determine optimal financial decisions in pursuit of an organization’s goals.
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