Annual+Report+Summative


 * GRADE 12 ACCOUNTING **  ** INDEPENDENT STUDY UNIT - ANNUAL REPORT **** (40 marks) **

Once a year, public corporations communicate to their shareholders and other interested parties by issuing audited financial statements and other pertinent information in book format. This document (electronic and hard copy) is known as an **annual report** and summarizes the financial performance of the company for the year while presenting management’s vision for the future of the firm.


 * __Instructions__:** For this assignment, you will examine the annual report of a Canadian public corporation for the fiscal year ended sometime in the past year and then answer the following questions with respect to that report. Please provide **page numbers from the report** to support your answers. You will need to spend considerable time reviewing the various sections of the report in order to complete this assignment.

You may select any Canadian public corporation you wish to examine. Company profiles and annual reports for most Canadian public corporations and investment funds can be found on the **//sedar.com//** website. (Annual reports of US public corporations can be examined on the EDGAR database at **//sec.gov//** while the books of public companies listed on the TSX can be viewed at //**tmx.com**//.) In addition, most corporate websites contain links to that company’s annual report. In any event, please obtain my consent as to your selection of corporation before proceeding so as to avoid duplication within the class.

This assignment should be prepared in a **transparent duotang**. Answers should be typed, neat and in complete sentences where specified. It is probably in your best interests to include question numbers (and perhaps even the questions themselves) in your finished product. The assignment should also contain a **title page** detailing all relevant information (your name, course and code, date, assignment title, etc.).

To begin the assignment, go to sedar.com. Click on //English//. Click on //Search Database//. Click on //Search for Public Company Documents//. Scroll down //Document Type// menu and click on //Annual Report//. Adjust the //Date of Filing// to read: From (one year ago from today’s date) to (present date). Click on //Search//. When you click on the name of the company you wish to research (to the left), you will see the **Company Profile**. When you click on //Annual Report – English// (to the right), you will see the company’s most recent **Annual Report**. Try to select a company with a sizeable annual report (1000 K or greater). Avoid annual reports on US SEC Form 10-K or Form 20-F.


 * __Questions – Company Profile:__**

1. Look at the **Company Profile** on //sedar.com.//

a) In which city is the company’s head office located? b) When was the company founded? (date of formation) c) Which industry classification does the company belong to? d) When is the company’s financial (fiscal) year end? e) Which stock exchanges are the company’s shares traded on? f) Who is the company’s auditor? g) Is the company incorporated (Jurisdiction Where Formed) federally or provincially? If provincially, in which province? h) In which provinces does the company operate (Reporting Jurisdictions)?


 * __Questions - Annual Report:__**

2. Look at the **Letter/Message to Shareholders.**

a) Identify the name of the President and/or Board Chairman and/or Chief Executive or Operating Officer of the company who prepared this letter. b) **In complete sentences**, briefly explain one key success, one recent change and one key plan for the future expressed in the letter.

3. Look at **Management’s Discussion and Analysis (MDA) of Operations.**

a) List at least ten __specific__ topics (subheadings) covered in this section. b) **In complete sentences**, briefly summarize management’s current outlook for the company.

4. Look at the **Independent Auditor’s Report** within the Audited/Consolidated Financial Statements section**.**

a) Confirm that the name of the accounting firm listed in the Company Profile is the same firm name found at the bottom of the auditor’s report. b) **In complete sentences**, briefly describe the auditor’s opinion as to the fairness of the company’s financial statements.

5. Look at the **Balance Sheet** within the Audited/Consolidated Financial Statements section**.**

a) What are the company’s total assets for the current year? b) What are the company’s total liabilities for the current year? c) What is the company’s share/contributed capital and retained earnings for the current year? d) What is the company’s total shareholders’ equity for the current year? e) What is the actual name used by the company to identify this particular document?

6. Look at the **Income Statement** within the Audited/Consolidated Financial Statements section**.**

a) What are the company’s total revenues/sales for the current year? b) What is the company’s cost of sales/cost of goods sold for the current year? (for merchandising firms only) c) What is the company’s gross profit/gross margin for the current year? (for merchandising firms only) d) What are the company’s total operating costs/operating expenses for the current year? e) What is the company’s operating (normal/continuing) income for the current year? f) What is the company’s EBIT or EBITDA for the current year? g) What is the company’s net income/earnings (final profit or loss) for the current year? h) What are the company’s earnings per share (basic and diluted) for the current year? (notes) i) What is the actual name used by the company to identify this particular document?

7. Look at the **Cash Flow Statement** within the Audited/Consolidated Financial Statements section**.**

a) What is the company’s net increase/(decrease) in cash and cash equivalents due to __operating__ activities for the current year? b) What is the company’s net increase/(decrease) in cash and cash equivalents due to __investing__ activities for the current year? c) What is the company’s net increase/(decrease) in cash and cash equivalents due to __financing__ activities for the current year? d) What is the company’s __overall__ net increase/(decrease) in cash and cash equivalents for the current year? e) What is the actual name used by the company to identify this particular document?

8. Look at the section that follows the financial statements labelled **Notes to Audited/Consolidated Financial Statements**.

a) What was the basis of preparation (statement of compliance) of the company’s most recent financial statements, i.e., in accordance with which reporting standards or principles? b) How many fixed/capital assets (property/plant/equipment) does the company own? Name all of them and their estimated useful lives if provided. c) Choose one or more fixed/capital assets and then describe the method of depreciation or amortization used for those particular assets. d) Other than goodwill, name all of the company’s intangible assets (e.g., patents, trademarks, contracts, etc.) e) How many common shares (basic and diluted) in the corporation were outstanding at the end of the year and/or what was the weighted average number of common shares (basic and diluted) outstanding during the year? f) How much did the company pay in dividends per share (common and/or preferred) and/or in total on an annual and/or quarterly basis?

9. Using the company financial statements and the summary of **financial ratios** found on pages 914-915 of the textbook (or located in the Chapter 19 link on this wiki), calculate

a) two liquidity ratios b) two profitability ratios c) one solvency ratio

for your selected corporation that does __not__ already appear in the annual report and show your formulas and calculations.

10. Look at the ** Company Directory **.

a) How many members make up the company’s board of directors? Identify the chairman of the board. b) Name __some__ of the senior executives/officers/Vice-Presidents of the company, and identify the department or division each is responsible for.

11. Look at the company’s **Three,** **Five or Ten Year Financial Performance/Review** or **Financial Highlights** located somewhere within the annual report. Describe the trend in terms of

a) revenues b) net income/earnings (final profit/loss) c) shareholders’ equity

using a trend analysis (horizontal analysis) with year one (earliest year) as your base figure (100%).

12. **In complete sentences**, briefly describe the **use and effectiveness of the following features** in the annual report:

a) graphs and charts b) photographs c) cover page layout


 * Note 1:** Please be advised that __some__ of the information necessary to complete this assignment may __also__ be found in the financial statements and/or financial highlights and/or the three/five/ten year financial review and/or notes to financial statements of the annual report.


 * Note 2:** Please be advised that dollar figures found in the annual report may be listed in hundreds or (more likely) thousands of Canadian dollars.


 * Evaluation of this assignment will be based upon the following criteria:**

(k/u) ||  || 5 6 || 6 7 || 7 8 || 8 9 10 || (comm) ||  || 5 6 || 6 7 || 7 8 || 8 9 10 || professionalism/organization of report (app) ||  || 5 6 || 6 7 || 7 8 || 8 9 10 || (think) ||  || 5 6 || 6 7 || 7 8 || 8 9 10 ||
 * ** Evaluation **  ** Criteria **  ||  ** not satisfactory **  ||  ** Level 1 **  ||  ** Level 2 **  ||  ** Level 3 **  ||  ** Level 4 **  ||
 * content variables – accuracy and completeness of information
 * language variables - quality of grammar and vocabulary
 * presentation variables -
 * critical thinking variables - logic and support of analyses

COMMENTS:

/40