Choose a publicly traded company that you are familiar with. Go to the selected company’s website and look at their annual report (10k). If you prefer, you may also go to the Securities Exchange Commission’s EDGAR database and download the annual report. Review the annual report, paying particular attention to the financial statements and the notes to the financial statements. How are their financial statements similar and different from those presented in the text? Describe the differences, if any, and explain why you believe the differences exist. As a potential investor, what areas do you think you should be most concerned with, if any, based upon the notes? Assuming you had unlimited funds, would this be a company you would invest in? Why or why not?
Choose a publicly traded company that you are familiar with. Go to the selected company’s website and look at their annual report (10k). If you prefer, you may also go to the Securities Exchange Commission’s EDGAR database and download the annual report. Review the annual report, paying particular attention to the financial statements and the notes to the financial statements. How are their financial statements similar and different from those presented in the text? Describe the differences, if any, and explain why you believe the differences exist. As a potential investor, what areas do you think you should be most concerned with, if any, based upon the notes? Assuming you had unlimited funds, would this be a company you would invest in? Why or why not? Criteria Ratings Points Thread Content: Key Components & Flow 21 to >18.0 pts Advanced All key components of the Discussion are answered in a clear and logical flow for the original thread. 18 to >17.0 pts Proficient Most of the key components of the Discussion are answered in a clear and logical flow for the original thread. 17 to >0.0 pts Developing Key components of the Discussion are missing, or there is not a clear and logical flow for the original thread. 0 pts Not Present 21 pts Thread Content: Major Points and Support 21 to >18.0 pts Advanced Major points are stated clearly and are supported by at least 2 peer-reviewed references. 18 to >17.0 pts Proficient Major points are stated clearly and are supported by fewer than 2 peer-reviewed references. 17 to >0.0 pts Developing Major points are not stated clearly and/or are supported by fewer than 2 peer-reviewed references. 0 pts Not Present 21 pts Thread Content: Analysis 21 to >18.0 pts Advanced There was thoughtful analysis (considering assumptions, analyzing implications, comparing/contrasting concepts) of the major points stated. 18 to >17.0 pts Proficient There was some analysis (considering assumptions, analyzing implications, comparing/contrasting concepts) of the major points stated, but a stronger connection could have been made. 17 to >0.0 pts Developing There was very little analysis (considering assumptions, analyzing implications, comparing/contrasting concepts) of the major points stated. 0 pts Not Present 21 pts Reply Content: Major Points 38 to >34.0 pts Advanced Major points are stated clearly and are supported by at least 2 peer-reviewed references. 34 to >31.0 pts Proficient Major points are stated clearly and are supported by 1 peer-reviewed reference. 31 to >0.0 pts Developing Major points may not be stated clearly and/or are not supported by peer-reviewed references. 0 pts Not Present 38 pts Thread Structure: Word Limit 10 to >9.0 pts Advanced The 400 word limit was fully met on the original posting. 9 to >7.0 pts Proficient Student wrote less than the minimum word count, but more than ½ of the required words. 7 to >0.0 pts Developing Student wrote less than ½ of the required words 0 pts Not Present 10 pts Discussion Grading Rubric | BMAL530_B05_202140 Criteria Ratings Points Thread Structure: Spelling, Grammar, and APA 17 to >15.0 pts Advanced There were no more than three spelling, grammar, or APA errors in the original posting. 15 to >13.0 pts Proficient There were four or five spelling, grammar, or APA errors in the original posting. 13 to >0.0 pts Developing There were six or seven spelling, grammar, or APA errors in the original posting. 0 pts Not Present There were eight or more spelling, grammar, or APA errors in the original posting, or the student did not submit. 17 pts Reply Structure: Number of Replies 5 to >4.0 pts Advanced There were at least two substantive replies to other students. 4 to >3.0 pts Proficient There was at least one substantive reply to another student. 3 to >0.0 pts Developing The replies submitted were not of a substantive nature. 0 pts Not Present 5 pts Reply Structure: Word Limit and Communication 5 to >4.0 pts Advanced The 200 word limit was fully met on the replies, and Communication follows Student Expectations posting. 4 to >3.0 pts Proficient The student wrote less than the minimum word limit on the replies, and Communication follows Student Expectations posting. 3 to >0.0 pts Developing The student wrote less than the minimum word limit on the replies, and/or communication did not follow Student Expectations posting. 0 pts Not Present 5 pts Reply Structure: Spelling, Grammar, and APA 7 to >6.0 pts Advanced There were no more than three spelling, grammar, or APA errors in the essay. 6 to >5.0 pts Proficient There were four or five spelling, grammar, or APA errors in the essay. 5 to >0.0 pts Developing There were six or seven spelling, grammar, or APA errors in the essay. 0 pts Not Present 7 pts Total Points: 145 Discussion Grading Rubric | BMAL530_B05_202140 Financial Statements These three main elements (assets, liabilities, and equity) that make up the accounting equation are then used to create financial statements. The financial statements describe the health of a company, much like an annual physical conducted by a doctor. Similar to the physical, a close examination has to be done in order to determine the true health. Not everything can be known about a company by just examining the financial statements, but the financial statements do go a long way in helping stakeholders and potential investors determine what is healthy about the company, what improvements could/should be made, and other qualitative data about the company and possibly even the industry as a whole. Ideally, all financial statements, and any additional information that may be available, must be reviewed collectively, and over time. Examining one financial statement, or only one time period will not give the reviewer a true picture of the financial health. Page 4 Income Statement The first financial statement is known as the Income Statement. The Income Statement provides details as to the revenues that have been earned by the company, and the expenses that have been incurred over a given time period. The net result is either a profit or a loss. It is possible to not have a profit or a loss, known as break-even, but that is extremely rare. Sometimes, the Income Statement is known as a Profit/Loss statement. The basic elements found on the income statement are revenues and expenses. Revenues may be called by several different names, but the most popular include revenues, sales, services, and fees earned. This element represents the gross amount earned, prior to any discounts or reductions. The theoretical definition is the gross increase in equity from a company’s business activities. So, while revenue is related to equity, it does not formally appear as an equity account. Rather, it appears on its own financial statement, and is separately listed. Similarly, expenses are also a type of equity account, but also appear on the Income Statement instead of directly listed as an equity item. Unlike revenues, expenses represent those items that show the outflow or using up of assets as part of the operations of a company. They are incurred as a means to generate revenues. In other words, expenses are those assets that have expired or are no longer owned by a company. For example, if Matthew decided to start his own cleaning business, went to a cleaning supply store and purchased cleaning solution for $10, the $10 would represent $10 in sales to the cleaning supply store. It would represent $10 of an asset to Matthew, as the cleaning solution would meet the definition of an asset (economic resource to Matthew that he owned and no one else had a right or access too). If the cleaning solution originally cost the store $6, then the store would show revenues/sales of $10, and a reduction in inventory of $6. The reduction of inventory would show a decline in value in the inventory asset account, and an increase in an expense (i.e. Cost of Goods Sold) of $6. This would leave a profit, or net income of $4 ($10 sales minus $6 expense). The terms net income and profit are often used interchangeably, as is net loss and loss. A simple formula used to calculate the Income Statement may then be defined as Revenues − Expenses = Profit/Loss Consequently, if revenues exceed expenses, there is a net profit, and if expenses exceed revenues, there is a net loss. The Income Statement can also break down the expenses into different categories. Those expenses directly related to the production of revenue would be considered Cost of Goods Sold (COGS). The result equals Gross Profit. The Gross Profit figure allows a financial statement user to determine how much of the revenues being generated are left over after the cost of the items being sold (or services being provided) are available to pay for other expenses. Other expenses would be classified as operating expenses, and generally relate to the overall operations of the business. Common expenses that fall into this category would be bank fees, office supplies, and most utilities. When one breaks the expenses down on the Income Statement in this multi-step manner, it is known as the Multiple-Step Income Statement. The formula would then look like Revenues − COGS = Gross Profit − Operating Expenses = Profit/Loss In either case, the simple formula or the multi-step formula, the end result should be the same profit or loss. Using the example of the purchased cleaning solution, the company would record $10 in revenue, $6 in COGS, which would give a gross profit of $4. Any additional expenses the store had, such as utilities, office supplies, etc. would then be subtracted from the $4. The end result would be the net income/loss. Once the net income or loss is calculated, that amount then flows through to a second financial statement, known as the Statement of Owners’ Equity. It is this statement, and the corresponding ending amount, that links the Income Statement and the Balance Sheet together. Without it, the Balance Sheet will not balance properly. Statement of Owners’ Equity The Statement of Owners’ Equity examines the owners’ equity account for all increases and decreases over a period of time. Much like the Income Statement, the Statement of Owner’s Equity is over a period of time, and not just one specific moment. For those companies that are publically traded, the statement is sometimes referred to as the Statement of Retained Earnings, as it measures the retained earnings account. The Retained Earnings account is an account that contains the cumulative profits and losses of a company, adjusted for dividends that may have been paid out, or any other similar adjustments. Different business entities will name the statement slightly different, but the end result should be the same. The