INTRODUCTION TO THE CORPORATE ANNUAL

Roberto De Armas: Fall, Harris Note to the user:This Word document provides a structuredtemplate for preparing your responses to thequestions in the annual report project. If you didnot purchase the workbook you are not permittedto use this template.INTRODUCTION TO THE CORPORATE ANNUALREPORT: A Business Application with IFRS Content4th edition Copyright 2015 by Applied Accounting Analytics. All rights reserved. Reproduction ortranslation of this book beyond that permitted by the applicable copyright law without AppliedAccounting Analytics’ permission is prohibited. 1 Roberto De Armas: Fall, Harris 2 Roberto De Armas: Fall, Harris To be completed by the student and submitted with the completed annualreport project according to your instructor’s requirements. Complete the following before you submit your assignment. This step is required tovalidate your compliance with sections 107 or 108 of the 1976 United States Copyright Act.1. Remove the front cover of the workbook and identify: Student Name: Roberto De Armas Term: Fall Selected Company: Publix Instructor: Harris2. Print out your completed electronic template. 3. Attach the following: 3 This front cover (completed) Electronic solution template Printed reports as specified by the instructions that immediately followChapter 1: Select a Company and Gather Documents – Question 1 Roberto De Armas: Fall, Harris CHAPTER 1 – INTRODUCTIONSelect a Company and Gather DocumentsChapter 1: Select a Company and Gather Documents—Question 1Identify with an “X” the primary source of data for this project.Example for The Home Depot 2013 Annual Report: http://www.homedepotar…./Click hereto enterAnnual report to shareholderstext.Click hereto enterAnnual report to shareholders with a letter from Chief Executivetext.Officer and SEC Form 10-K as part of the annual report toshareholders.Click hereto enterSEC Form 10-K and the company website.text.Fill in the page numbers from the annual report where the following are located.Required information for thisworkbook project.Financial Highlights Management’s Discussion andAnalysis (MD&A) Income Statement 4 PageNo.Clickhere toentertext. Clickhere toentertext.Clickhere toentertext. Required information for thisworkbook project.Chief Executive Officer Letter Page No. Notes to Financial Statements Clickhere toentertext. Report of IndependentAccountants or IndependentAuditors’ Report Clickhere toentertext. Clickhere toentertext. Roberto De Armas: Fall, HarrisBalance Sheet Clickhere toentertext. Five- or Ten-Year Summary ofOperating Results Clickhere toentertext. Statement of Change inStockholder’s Equity Clickhere toentertext. Management’s Report(Responsibility) on InternalControl over FinancialReporting Clickhere toentertext. Statement of Cash Flows Clickhere toentertext. Investor and CompanyInformation or ShareholderInformation Clickhere toentertext. Identify Why You Selected This CompanyChapter 1: Identify Why You Selected This Company – Question 1A) What is/are your motivation(s) or interest(s) in selecting this company?[See above for examples.] B) What question(s) are you seeking to answer?[For example, is the company profitable? Can the company change and develop new productsand services to be competitive? Would I invest in this company? Will the company providerewarding career opportunities? In chapter 5 you will have pulled together the financial andnonfinancial information to answer these question(s).] A)Click here to enter text.B)Click here to enter text. Company and Annual Report EssentialsChapter 1: Company and Annual Report Essentials – Question 1What is the company’s complete name? 5 Roberto De Armas: Fall, Harris Click here to enter text.Chapter 1: Company and Annual Report Essentials – Question 2What is the address of your company’s corporate headquarters?Click here to enter text.Chapter 1: Company and Annual Report Essentials – Question 3Identify the company’s website address.Click here to enter text.Chapter 1: Company and Annual Report Essentials – Question 4Identify the telephone number and e-mail address of the company’s Investor RelationsDepartment.Click here to enter text.Click here to enter text.Chapter 1: Company and Annual Report Essentials – Question 5Which stock exchange lists your company?Click here to enter text.Chapter 1: Company and Annual Report Essentials – Question 6What is your company’s stock exchange trading symbol?Click here to enter text.Chapter 1: Company and Annual Report Essentials – Question 7What is your company’s Standard Industrial Classification (SIC) and sector? Run asearch on “Standard Industrial Classification,” and the classification and code will beidentified. Your company may list more than one SIC code numbers. The first listed isconsidered the primary SIC for the company.For example, search – The Home Depot SIC – brings up a listing of sources. Once you locate thiscode, search on the Department of Labor website at 6 Roberto De Armas: Fall, Harrishttps://www.osha.gov/pls/imis/sicsearch.html to find out more about your Company’s SIC. SIC Code: 5211Sector: Basic Materials, Construction, RetailIndustry: Lumber and other building materialsClick here to enter text.Chapter 1: Company and Annual Report Essentials – Question 8Locate the board of directors listing. How many board members does your companyhave?Click here to enter text.Chapter 1: Company and Annual Report Essentials – Question 9How many of the directors are company employees, labeled inside directors? And howmany are non-company directors, labeled outside directors? Why does a company wantand need outside directors?(Inside and outside directors are typically identified as such by their title and company.) Click here to enter text. Chapter 1: Company and Annual Report Essentials – Question 10Leadership addresses the stockholders, typically, once a year at the annual stockholdersmeeting. Identify where and when this occurred, as reported in your annual report.Click here to enter text.The previous series of questions provides basic company information. All are building blocksof a complete study of a company through the annual report. Company Strategy and Business EnvironmentChapter 1: Company Strategy and Business Environment – Question 1Review the chairman’s message of your company’s annual report. Does it appear to beuplifting or somewhat apologetic? Identify phrases that support your position. 7 Roberto De Armas: Fall, Harris Click here to enter text.Chapter 1: Company Strategy and Business Environment – Question 2Check below the one primary company strategy identified in the chairman’s message.Support your answer with phrases found in the chairman’s message that pointed you tothe identified corporate strategy.Growth: Vertical Click here to enter text.Horizontal___Click here to enter text.Concentric Click here to enter text.Conglomerate Click here to enter text. StabilityClick here to enter text.Retrenchment Click here to enter text. .Phrases to support your conclusion:Click here to enter text.Chapter 1: Company Strategy and Business Environment – Question 3Briefly summarize the company’s discussion found in Item 1 of SEC Form 10-K.Type of business:Click here to enter text.Major business segments:Click here to enter text.Primary customers:Click here to enter text.Primary products and/or services:Click here to enter text.Other:Click here to enter text. Chapter 1: Company Strategy and Business Environment – Question 4Identify broad-based social, political, economic, and technological concerns that mayaffect your company. Put N/A if one of the categories does not apply. 8 Roberto De Armas: Fall, HarrisSocial:Click here to enter text.Political:Click here to enter text.Economic:Click here to enter text.Technological:Click here to enter text.Other:Click here to enter text. Wrap-upChapter 1: Wrap-up – Question 1After further review of additional information you should now be confident inidentifying the one primary company strategy, beyond the insight provided by thechairman’s message?Check below the one primary company strategy identified in the chairman’s messageand all other supporting documents. Support your answer with phrases.Growth: Vertical Click here to enter text.Horizontal Click here to enter text.Concentric Click here to enter text.Conglomerate Click here to enter text. StabilityClick here to enter text.Retrenchment Click here to enter text. .Phrases to support your conclusion from information gathered from the chairman’s message,Item 1 of the SEC Form 10-K and other insight gained from completing Chapter 1.Click here to enter text. 9 Roberto De Armas: Fall, Harris CHAPTER 2 – ANNUAL REPORT STRUCTUREFinancial HighlightsChapter 2: Financial Highlights – Question 1Review the financial highlights of your company’s annual report to the shareholders.Identify net sales or revenues, net income, basic earnings per share (BEPS), and totalassets for the current and preceding years. These are the most common values includedin financial highlights. If your company reports something different, simply cross out anitem here and recap what is reported. SEC Form 10-K does not provide financialhighlights. You may find this information on the company website. If not available putN/A in the first row of boxes.Categories Current Year One Year Prior Two Years Prior Net sales or revenues Click here toenter text. Click here toenter text. Click here toenter text. Net income Click here toenter text. Click here toenter text. Click here toenter text. Basic EPS Click here toenter text. Click here toenter text. Click here toenter text. Total Assets Click here toenter text. Click here toenter text. Click here toenter text. Based on your preliminary review, is your company performing better than, equal to, orless favorably than in the prior year? Briefly explain.Click here to enter text. General Company and Marketing InformationChapter 2: General Company and Marketing Information – Question 1Look for pictures of product and people that are colorful and send a positive companysignal to the reader.Category Message Example: VolunteerActivities Ongoing and contributing to the success of thecommunity Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. 10 Roberto De Armas: Fall, HarrisClick here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. What is the broader message from this information?Click here to enter text. Management’s Discussion and AnalysisChapter 2: Management’s Discussion and Analysis – Question 1Results of Operations:Identify the primary drivers/issues that explain current and future results of operationsdiscussed in the MD&A. For example, the gross profit percentage increased because ofimproved buyer/supplier relations resulting in greater overall operating performance. Oran increase in operating expenses because of increased fuel costs reduced profits. Listthe six major drivers/issues of performance you find in the MD&A section of the annualreport.Click here to enter text.Click here to enter text.Click here to enter text.Click here to enter text.Click here to enter text.Click here to enter text.Liquidity:Recap what you find about your company’s liquidity in the MD&A section of theannual report. Look for information about the ability of the company to satisfy shortterm cash needs and the ability to generate operating cash flows, for example.Click here to enter text.Capital Resources:Recap what you find about your company’s capital resources in the MD&A section ofthe annual report. Look for information about cash reserves and credit availability. Forexample, your company’s MD&A section may have a disclosure about an establishedline of credit to fund future growth.Click here to enter text. 11 Roberto De Armas: Fall, Harris Reports by ManagementChapter 2: Reports by Management – Question 1Review the Management’s Report (Responsibility) on Internal Control over FinancialReporting in your company’s annual report. Answer the following questions.Who is responsible for maintaining theinternal controls designed to providereasonable assurance that the books andrecords reflect the transactions of thecompany? Click here to enter text. Record the statement that identifiesmanagement’s conclusion about internalcontrols. Click here to enter text. Who audited management’s assessment ofthe effectiveness of your company’sinternal control over financial reporting? Click here to enter text. Independent Auditors’ ReportChapter 2: Independent Auditors’ Report – Question 1Review the Independent Auditors’ Report of your company’s annual report and answerthe following questions.Who was the company’sauditor and where is itlocated? Click here to enter text. What is the responsibilityof the auditor? Click here to enter text. Who is responsible for thepreparation of andinformation within thecompany’s financialstatement? Click here to enter text. The audit was conductedin accordance with what? Click here to enter text. What was the opinion ofthe auditor? Click here to enter text. 12 Roberto De Armas: Fall, Harris Five- or Ten-Year Summary of Operating ResultsChapter 2: Five- or Ten-Year Summary of Operating Results – Question 1Identify the major components provided in the five- or ten-year summary. Summarizethe insight provided by each. Look for stable, increasing or decreasing trends.Consistent, slightly improving performance signals management has control of thebusiness. Inconsistent performance signals management does not have control of thebusiness….ponent Summary of Insight Example: The Home Depot Sales and earnings have grown significantly over time.Operating expenses are decreasing. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. 13 Roberto De Armas: Fall, Harris CHAPTER 3 – FINANCIAL STATEMENTSThe Balance SheetChapter 3: Balance Sheet – Question 1Identify the date shown at the top of your selected company’s balance sheet.Current Year Prior Year Click here to enter text. Click here to enter text. Does the company’s fiscal year follow the calendar year? Yes, Notext. Click here to enter If not, why do you think it is different?Click here to enter text. Chapter 3: Balance Sheet – Question 2Review the current asset section of your selected company’s balance sheet. Explain whythe order of individual items begins with cash. In your opinion, would it be more or lessappropriate to order these items according to dollar magnitude? Explain.Click here to enter text. Chapter 3: Balance Sheet – Question 3Review your company’s balance sheet (or SEC Form 10-K) and compare accumulateddepreciation to the historical cost of Plant and Equipment (PE) using the following ratio….pute the following: Percentage of Asset Life Remaining Accumulated depreciation / High percentage means older assets Plant and Equipment Low percentage means newer assets Click here to enter text.Is the investment in fixed assets, on average, relatively recent? If not, can we assumethat these assets will be replaced shortly?Click here to enter text. 14 Roberto De Armas: Fall, HarrisChapter 3: Balance Sheet – Question 4Since property, plant, and equipment (PPE) and long-term investments in stock representa company’s investment, why do we distinguish between them in the balance sheet?Click here to enter text. Chapter 3: Balance Sheet – Question 5Review the noncurrent asset section of your company’s balance sheet. Are anyintangible assets listed? If so, identify the types of intangible assets and the percent oftotal assets that the intangible assets represent.Intangible Asset 1: Click here to enter text.Intangible Asset 2: Click here to enter text.Intangible Asset 3: Click here to enter text.Total Intangible Assets Total Assets = Click here to enter text.If this company were to be acquired by another company, would the intangible assetsinfluence the purchase price? Explain your answer.Click here to enter text. Chapter 3: Balance Sheet – Question 6Now review your company’s total assets for the most recent year. What percentage oftotal assets is current? Noncurrent?Current Noncurrent Click here to enter text. Click here to enter text. Should companies have a greater investment in current assets or noncurrent assets, ordoes it depend on the nature of their business? Explain your answer.Click here to enter text. Chapter 3: Balance Sheet – Question 7Review your company’s balance sheet. Does it report a deferred tax asset? A deferredtax liability? If so, are the deferred tax assets and/or liabilities reported as current ornoncurrent?Deferred tax asset? Yes or No Click here to Current or Noncurrent* Click here to enterenter text.text.Deferred tax liability? Yes or No Clickhere to enter text. 15 Current or Noncurrent* Click here to entertext. Roberto De Armas: Fall, Harris*Note: If your company reports a current deferred tax asset (liability), it will realize anincome tax benefit (obligation) in the next accounting period because of a previouslyreported event.If your company reports a noncurrent deferred tax asset (liability), it will realize anincome tax benefit (obligation) in future accounting periods (beyond the next) becauseof a previously reported event. Chapter 3: Balance Sheet – Question 8Identify the information that relates to the stockholders’ equity section of yourcompany’s balance sheet.Par value per share of common stock? Click here to enter text. Number of common shares authorized? Click here to enter text. Number of common shares issued? Click here to enter text. Number of common shares outstanding? Click here to enter text. Number of treasury shares held by the company? Click here to enter text. Chapter 3: Balance Sheet – Question 9Answer the following questions relative to the stockholders’ equity section of thebalance sheet.By what amount did retained earnings increase ordecrease from the prior year?Was the increase or decrease in retained earningsequal to the company’s current year net income or netloss? Click here to enter text.Yes or NClick here to enter text.* * If No, then dividends were paid (or declared) by your selected company or certainevents took place during the year where the accounting for the events directly affectedthe retained earnings account.Chapter 3: Balance Sheet – Question 10List (write-in) each financial statement element as shown in your company’s balancesheet.Assets Liabilities Stockholders’ Equity Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. 16 Roberto De Armas: Fall, HarrisClick here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Click here to enter text. Chapter 3: Balance Sheet – Question 11Identify the combined carrying values (dollar amounts) of the following selectedaccount groups taken from your company’s balance sheet:Account Groups Increase orDecrease CurrentYear Prior Year Current Assets Click here toenter text. Click here toenter text. Click here toenter text. Net Fixed Assets Click here toenter text. Click here toenter text. Click here toenter text. Intangible and Other Noncurrent Assets Click here toenter text. Click here toenter text. Click here toenter text. Current Liabilities Click here toenter text. Click here toenter text. Click here toenter text. Long-term Liabilities Click here toenter text. Click here toenter text. Click here toenter text. Common Stock Click here toenter text. Click here toenter text. Click here toenter text. Additional Paid in Capital* Click here toenter text. Click here toenter text. Click here toenter text. Retained Earnings Click here toenter text. Click here toenter text. Click here toenter text. Other Equity Components Click here toenter text. Click here toenter text. Click here toenter text. (in dollars) *Note again that additional paid in capital is known as share premium in IFRS based financialstatements.Chapter 3: Balance Sheet – Question 12Identify the three major balance sheet accounts, for example accounts receivable,accounts payable, inventory, etc. that changed the most from the prior year. What eventsmight explain these changes? Working to explain why these changes occurredcontributes to a greater understanding about a company.Account 17 Explanation Roberto De Armas: Fall, HarrisExample: Example: AccountReceivable An increase in accounts receivable should coincide with an increasein sales, i.e., a 10% increase in sales would explain a 10% increasein accounts receivable. If accounts receivable are increasing andsales decreasing, the signal is unfavorable. Click here toenter text. Click here to enter text. Click here toenter text. Click here to enter text. Click here toenter text. Click here to enter text. Chapter 3: Balance Sheet – Question 13Prepare a common-sized balance sheet (expressed in percentages) using the followingaccount groups shown in your selected company’s balance sheet.Account Group Increase orDecrease CurrentYear Prior Year Current Assets Click here toenter text. Click here toenter text. Click here toenter text. Net Fixed Assets Click here toenter text. Click here toenter text. Click here toenter text. Intangible and Other Noncurrent Assets Click here toenter text. Click here toenter text. Click here toenter text. 100% 100% Current Liabilities Click here toenter text. Click here toenter text. Click here toenter text. Long-term Liabilities Click here toenter text. Click here toenter text. Click here toenter text. Common Stock Click here toenter text. Click here toenter text. Click here toenter text. Additional Paid in Capital Click here toenter text. Click here toenter text. Click here toenter text. Retained Earnings Click here toenter text. Click here toenter text. Click here toenter text. Total Assets 18 (current yearpercent minusprior year percent) Roberto De Armas: Fall, HarrisOther Equity Components Click here toenter text. Click here toenter text. 100% 100% Total Liabilities and Stockholders’Equity Click here toenter text. Chapter 3: Balance Sheet – Question 14Identify the three balance sheet groups from question 13 above that changed mostsignificantly. Within each of these groups, identify the primary balance sheet elementthat drove this change. What events might explain these changes?Group Name: Explanation: Current Assets (Example – sales increased by 22%, thus accounts receivableincreased by approximately 22%) Click here to entertext. Click here to enter text. Click here to entertext. Click here to enter text. Click here to entertext. Click here to enter text. Chapter 3: Balance Sheet – Question 15Did your company become more or less liquid when comparing this year to last year?Current Year: Prior Year: Current Assets minus Current Liabilities = Current Assets minus Current Liabilities = Click here to enter text. Click here to enter text. Explain why?Click here to enter text. Chapter 3: Balance Sheet – Question 16Did your company increase or decrease its financial leverage when comparing total debtto total stockholders’ equity from this year to last?Current Year: Prior Year: Total debt Total stockholders’ equity = Total debt Total stockholders’ equity =Click here to enter text. Click here to enter text. 19 Roberto De Armas: Fall, HarrisExplain why:Click here to enter text. The Income Statement or Statement of EarningsChapter 3: Income Statement – Question 1Review the heading of your company’s income statement. Does thecompany’s income statement provide two or three years of comparativeinformation? (Insert number to the right.) Click hereto entertext. ___ yrs.Why do you think the SEC requires that balance sheets provide two years ofcomparative financial information and income statements provide three years ofcomparative financial information?Click here to enter text. Chapter 3: Income Statement – Question 2Review the middle section of you…