Needles/Powers 2002e Principles of Financial Accounting- Internet Research Activities

Needles Accounting Resource Center

Principles of Financial Accounting , 2002 Edition
Belverd E. Needles, Jr., DePaul University
Marian Powers, Northwestern University
Susan Crosson, Santa Fe Community College

Internet Research Activities
Chapter 6: Financial Reporting and Analysis

Annual Reports and Financial Analysis

Instructions: Visit one of the five annual reports listed below, or choose others from the Annual Reports list included at this site. Identify the four basic financial statements and the related footnotes. Perform a liquidity analysis, including the calculation of working capital and the current ratio. Perform a profitability analysis, calculating profit margin, asset turnover, return on assets, debt to equity, and return on equity.

Five Annual Reports:

Sample Income Statement
(Click here to see the Sun Microsystems income statement online)

Years Ended June 30 (in millions)	2000	1999	1998	1997
Net revenues	15,721	11,806	9,862	8,598
Cost and expenses:
Cost of sales	7,549	5,670	4,713	4,320
Research and development	1,630	1,280	1,029	826
Selling, general and administrative	4,137	3,215	2,830	2,402
Purchased in-process research and development	12	121	176	23
Total costs and expenses	5,779	4,616	4,035	7,572
Operating income	2,393	1,520	1,114	1,027
Gain on sale of investments, net	208	0	0	62
Interest income, net	170	85	48	32
Income before income taxes	2,771	1,605	1,162	1,121
Provision for income taxes	917	575	407	359
Net income	1,854	1,030	755	762
Profit margin	11.79%	8.72%	7.66%	8.86%

Extended Research Activities

1. Examine Fortune Magazine's Industry List for Airlines.

Compare the top two corporations on the basis of:

Revenues
Profits
Profits as a percentage of revenues, assets, and stockholders' equity
Earnings per share

Which company looks stronger? Why?

2. Examine Fortune Magazine's list of the 500 largest corporations by industry, dubbed the Fortune 500 Industry List.

Select an industry of your choosing (other than airlines).
Compare the top two corporations on the basis of revenues, profits, profits as a percentage of revenues, assets, and stockholders' equity and earnings per share.
Which company looks stronger? Why?

Either print out your answers for submission or email them to your instructor.





	ACE Practice Tests

	Chapter Summaries

	Check Figures

	Company Links

	Learning Objectives

	Business Readings

	Internet Research Activities

	Toys'R'Us Annual Report Activities

	Fingraph Financial Reporting and Analysis Cases Using CPAnalyst(r)



	SMARTHINKING

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