Format: APA .
Required Sources to be used:
• Corporate Finance, 10th Edition Ross, Stephen; Westerfield, Randolph W.; Jaffe, Jeffrey Published by McGraw-Hill Education ISBN 10: 0078034779 / ISBN 13: 9780078034770
• Yahoo finance See instructions in Section 1.
Total Pages of content: 17-18 pages.Section 1: Financial Reporting
1. Identify a major company (one that is having financial problems or on the brink of bankruptcy) that is publicly traded and locate its SEC 10-K.
2. You can access a company’s SEC 10-K by going to Yahoo Finance and in the yellow box titled “Get Quotes” type in the name of the company.
3. Click on the ticker of the selected company. On the left in the blue box is a link titled “SEC Filings”. Scroll down until you find the company’s 10-K and click on the link on the right titled “Full Filing at Edgar Online”.
4. Scroll down to link titled “ITEM 7 Management’s Discussion and Analysis” and print the materials.
5. Summarize the various sections to ITEM 7 in 1 page.
Section 2: Financial Performance Measurements
1. From your review of the major sections to ITEM 7, identify four different performance measurements that management discusses in their review of this section.
2. Summarize and compare the performance measurements to those found in Chapter 3 from Corporate Finance, 10th edition in 4 pages.
Section 3: Ratio Analysis
1. Compute the following ratios based on the financial statements for two consecutive years found in the company’s SEC 10-K:
• Current Ratio,
• Acid Ratio,
• Total Asset Turnover,
• Return on Sales,
• Return on Assets,
• Return on Equity,
• Accounting Receivable Turnover,
• Inventory Turnover, and
• Debt Ratio.
2. Be sure to comment on whether the company’s financial ratios have improved or deteriorated between years along with a comparison to its industry competitors 4 Pages.
Section 4 : Cash Flows and Capital Expenditures
1. In the company’s SEC 10-K that you selected prior, print out a copy of the firm’s Statement of Cash Flow found in ITEM 8 “Financial Statements and Supplementary Data” along with the major purchases found in the Property Plant & Equipment footnote.
2. Identify where the major sources of cash flows are coming in and where the major uses of cash flows are going out in the firm’s Statement of Cash Flow.
3. Discuss your findings in a 3 pages.
Section 5: Risk Management
1. In ITEM 7, Management Discussion and Analysis, identify the different risk that management discusses and summarize in 3 pages.
2. Identify if this is internal risk (risk they can control) or external risk (risk that is external to the organization) and describe how the risk is being managed.
Section 6: Derivative Contracts
1. Examine the ITEM 7 Management Discussion and Analysis section of the firm’s SEC 10-K and summarize at least two of the derivative contracts.
2. Be sure to comment if the transactions are internal or external to the company’s business 1-2 Pages.
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