FIN 501 Study Guide - Ontario Securities Commission, Toronto Stock Exchange, Cash Flow

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beigefish258

31 Jul 2012

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Primary source of financial information about a company is its annual report to stockholders. Other sources include the globe and mail, the toronto stock exchange, ontario securities commission. Sedar: electronic archive of company filings with the canadian securities regulatory agencies. Disclosure regulation: requires companies making a public disclosure of material non-public information to do so fairly without preferential recipients. Balance sheet: accounting statement that provides a snapshot view of a company"s assets and liabilities on a particular date: asset: anything a company owns that has value. Current assets cash or items that will be converted to cash or be used within a year (ex. Cash, ar, inventory, materials and supplies, prepaid expenses) Fixed assets tangible or intangible assets with an expected life longer than one year and are used in normal business operations (ex. Investments various securities held for investment purposes (ex.

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The class should discuss all of the questions listed below as they relate to the financial statements of any U.S. public company of your choice in its latest annual report. You can find the financial statements of any U.S. public company by visiting Morningstar, Yahoo Finance or MSN Money, and using the stock market symbol for your chosen company (which can be looked up on Morningstar, Yahoo Finance or MSN Money). If you work for a U.S. public company, you probably want to use the financial statements of your company - but the choice is up to you.

NOTE: Sometimes Yahoo, MSN Money and Morningstar omit numbers. Only the annual report from the company web site or the SEC form 10-K (for U S Companies) can be guaranteed to have all numbers correct. The 10-K Business section and Management Discussion and Analysis contain valuable information about the business, competitors and what happened to financial results. It can be found on the SEC web site: www.sec.gov. Click on Edgar and then enter the ticker symbol for the company. Search for 10-K.

It is useful to compare financial ratios for a company with financial ratios of its industry. Industry financial ratios can be found on Morningstar.com, Yahoo Finance and MSN Money.

Please answer the following questions:

1) What 3 items of important information does the income statement reveal about the financial performance of the company over the last three years?

2) What 3 items of important information does the balance sheet reveal about the financial position of the company over the last two years?

3) Can you identify the major sources of funding used by the company from the information presented in the company's Cash Flow Statement?

If not, how could you get this information?

4) Who is responsible for: a) the issuance, and b) the content of the company financial statements?

5) What assurance, if any, is there that the financial statements are in compliance with GAAP, and are free of material misstatements?

6) Of what use, if any, are the notes to the financial statements? Give 2 facts learned from reading footnotes.

7) What can you learn from the Business Section of the 10-K? Give two facts about the company that you picked from the Business Section.

8) What can you learn from the Management's Discussion and Analysis of Financial Condition and Results of Operations in the 10-K? Give two facts about the company from this section.

It is important for financial statementsâ external users to understand financial information about a company in which they have stakes. Financial information reported in the annual reports should not be the only source of information to make informed decisions, however. Financial news is equally important. Since we are learning about inventory this week, select a company that sells inventory. In other words, select a retailer.

Follow the following steps:

USE APPLE for the company of choice

Scroll down to Headlines. Select an article that interests you and that will be relevant to the companyâs stakeholders.

Then answer the following questions:

Identify the selected retailer and news articleâs source (for example, Forbes, Reuters, Wall Street Journal, etc.).

Summarize the article and explain the implications of its content to an investor or another stakeholder.

blackhippopotamus765

Refer to P&G's financial statements and the related information in the annual report to answer the following questions. http://www.pg.com/annualreport2011/_files/pdf/PG_2011_AnnualReport.pdf

a) Examining each item in P&G's balance sheet, identify those items that require present value, discounting, or interest computation in establishing the amount reported.

b) (1) What interest rates are disclosed by P&G as being used to compute interest and present values?

(2) Why are there so many different interest rates applied to P&G's financial statement elements (assets, liabilities, revenues, and expenses)?

blushgoldfish743

FIN 501 Study Guide - Ontario Securities Commission, Toronto Stock Exchange, Cash Flow

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