Assignment 3 – Financial Accounting
Name:______
Due date: October 15, by email
You may type your answers in the space after each question, then submit the entire document by email.
Select one of the following companies, and go to the most recent 10-K (the annual report filed with the SEC).
Wal-Mart Stores
ExxonMobil
General Electric
AT&T
Using the consolidated financial statements and the notes to the financials (along with your text, and the Power Points for Chapters 2 - 10), answer the following questions. Your answers may be numerical, bullet point lists, short answers, whatever is required. Complete sentences are not required. The goal of this exercise is to familiarize yourself with the SEC filings and with the information contained in the financials and the notes to the financials. DO NOT JUST CUT AND PASTE DISCLOSURES! I want your words – your interpretation.
For the most recent year:
1. What is the par value per share of the common stock?
2. How many shares of common stock are outstanding?
3. Does the company have any treasury stock? If so, what is the total dollar amount of the cost of the treasury shares?
4. Did the company have any foreign subsidiaries which required a translation adjustment? If so, what was the amount and direction of the translation adjustment?
5. What amount of cash did the company invest in property, plant and equipment (capital expenditures)?
6.What amount of goodwill did the company recognize it its balance sheet? What percentage of total assets was this asset? What activities caused the goodwill (just focus on the footnote in the most recent year)?
7. What is the net amount for deferred tax asset or deferred tax liability as disclosed in the footnotes of the company’s financials? What amounts does the company display separately in the balance sheet for current/noncurrent deferred tax assets/liabilities? (The disclosure may not agree with the balance sheet due to aggregation of some numbers.)
8. Does the company offer stock options to its employees? If so, what is the amount of the stock options exercisable at the end of the current year?
9. Does the company disclose any contingent liabilities or legal proceedings? If so, does the company indicate that any of the contingencies will “probably” be settled against the company? Or are the contingencies indicated to be of a lesser amount/probability? Explain.
10. Does the company have any operating leases that are considered to be noncancelable leases? if so, what is the total amount of the minimum operating lease payments? If these were required to be capitalized in the future, by what percentage would it increase total liabilities?
11. What amounts does the company show for basic and diluted earnings per share? What type(s) of securities were "assumed to be converted" (e.g., stock options, convertible bonds, convertible preferred stock)?
12. Does the company have a defined benefit pension plan? If so, what does the company indicate as the funded status of the pension plan?
13. Does the company mention any derivative investments? If so, what sort of derivatives does the company have? (just some general information here – ex: cash flow hedge, interest rate hedge, etc.)
14. From the Statement of Cash Flows, find the Cash Flow from Operating Activities. What amount does the company show as net cash inflow(outflow) from operating activities? How does this number relate to net income (higher or lower)? What is the ratio of Cash flow from operating activities to net income (divide CFO by net income. What was the single largest adjustment to net income to get to cash flow from operating activity?
15. Find the Cash Flow from Investing activities. What amount did the company show for capital expenditures (purchase of capital assets like property, plant, equipment)?
16. Find the Cash Flow from Financing activities. What was the Net Cash Flow from Financing? Was the company borrowing more than it was repaying? What was the primary form of borrowing – debt or equity?