Assignment #1

75 Points 

Students will select a Fortune 500 company to examine ( Prepare a Word document using information from their Annual Report. (Use the most recent year available.)

The Word document must cover ALL of the following:


  • Describe the content and purpose of the three main financial statements. 

Balance Sheet

  • What are the balances at year-end for assets, liabilities, and stockholder’s equity?
  • Prepare a common-size Balance Sheet. Be sure to properly label and form this financial statement.
  • Review the Notes to the financial statement:
  • What Inventory Method does the company use?
  • What other pertinent information does the company disclose about their inventory
  • What does the company disclose regarding fixed assets and depreciation?

Income Statement

  • What is revenue, gross profit, and net income for the year?
  • Prepare a common-size Income Statement. Be sure to properly label and form this financial statement.
  • Are there any special items on the Income Statement (e.g. Discontinued Operations, Extraordinary items)? If so, describe the event that caused the item and why is this event classified as a special item.
  • Review the Notes to the financial statement:
  • Describe the company’s policy on revenue recognition.

Statement of Cash Flows

  • What are the cash flow totals for operating, investing, and financing activities?
  • What are some of the main investing and financing activities that occurred? If there are negative cash flow totals, describe whether this cash outflow has a positive or negative impact on the company’s sustainability. Why?

Management’s Discussion and Analysis (MD&A)

  • Highlight 3 interesting topics discussed in the MD&A section of the annual report. 
  • How does the information presented impact the financial statements and relevant ratios?

Additional Instructions

  • Make sure to choose a Fortune 500 company that has inventory
  • Annual Reports (10-k) can be found:
  • Company website – Usually at the bottom of the main page under a link titled ‘Investor Relations’, ‘Corporate’,  (or something similar).
  • SEC website ( Click ‘Filings’ tab to search for the company (Make sure to use the 10-k report).
  • The document should include the same headings listed above (Overview, etc.).
  • The document should be APA formatted (including title page, APA formatted references, etc.)
  • You can complete the common size financial statements in Excel then copy and paste into your main Word document.
  • MUST: Include the direct link to the Annual Report
  • You must upload your file to Blackboard under Week 3 Assignments.  Go to the Assignment, scroll down to “Attach Local File” and click Browse to select YOUR file, then hit SUBMIT.
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