Module 7 – Application & Analysis Assignment
Choose a company with which you are familiar and is publicly traded. Locate and download a copy of the company’s most recent annual report from the company’s website or Form 10-K report from the Security Exchange Commission’s (SEC) website. On the company’s website, look for Investor Relations information. On the SEC’s website, you can use the company search feature of the EDGAR database found at http://www.sec.gov/edgar/searchedgar/companysearch.html.
Open the company’s annual report/Form 10-K that you downloaded and locate the company’s segment information; it should be in the “Notes to the Consolidated Financial Statements” or another similarly named section. Look at the headings for the word “Segment”.
Respond to the following questions based on your knowledge of this module’s material.
List the name of the company and the year of the annual report/Form 10-K. Provide a link to the annual report/Form 10-K that you used for this assignment.
1) Create a table that reports the following information: • Name of company • Year of annual report/Form 10-K • Link to download this annual report/Form 10-K • For EACH operating segment:
a) name of the segment b) segment revenue c) segment income d) segment assets, and e) page number(s) of the annual report where you found the segment information.
2) Calculate each segment’s sales margin. Interpret the results.
3) Calculate each segment’s capital turnover. Interpret the results.
4) Calculate each segment’s ROI (return on investment). Interpret the results.
5) Can you calculate RI (residual income)? Why or why not?
6) The rules for how segments should be presented in the annual reports are governed by external
financial accounting rules. The information you gathered for the previous requirements would be used by investors and other external stakeholders in their analysis of the company and its stock. Internally, the company most likely has many segments. Based on what you know about the company and its products or services, list at least three potential segments that the company might use for internal reporting. Explain why this way of segmenting the company for internal reporting could be useful to managers.
http://www.sec.gov/edgar/searchedgar/companysearch.html