Directions for the SEC Written
Assignment. As stated in the Syllabus, for this assignment you will discuss your chosen
company. You should introduce the company, giving a brief history and
background. Also, you should report on the company’s results for the fiscal
year, based on the Annual Report (10-K) you reviewed. Some
of the information is about some of the items you have already looked for when
you posted to the discussion forums or prepared your Powerpoint slides. You
should also define some of the basic accounting terms you have learned in the
course, based on a citable source. Then explain how those terms apply to your
company’s results. Here is more detail on the things you should discuss.
Introduction
Here are suggested topics for your
introduction. Discuss the history of company, founders of the company, what the
core business is (i.e., what does the company sell?), who are its customers
(i.e., are they consumers, other businesses, a combination?). Do not give a
100-year summary of the company!
Provide some demographic information such as
number of employees, where the company sells its’ products (domestically,
globally, online, bricks-and-mortar stores, etc), location of production
facilities (if company is a manufacturer) or stores (if a retailer). You can
also discuss who the company’s competitors are, any recent changes in the
company’s operations, or the company’s evolution over time.
Keep the introduction brief, and please do
not copy and paste from your sources! Use your own words. Most of what you are
presenting is factual, so each paragraph should have at least one citation.
Most of the facts will likely be from parts of the company’s website or from
the 10K.
Financial results (Most
of your paper will be in this section)
Give a one-or-two sentence overview of what
you will discuss next. Introduce Table 1. Do not just present it without saying
why it is there. Complete a table like the one below. You can copy and paste
this table and then complete it with your company’s information. Take out the
text in red font and replace it with the information needed. Remember to
show your amounts in the business formatted way you learned over the past few
weeks. For instance, an amount reported in the thousands, shown as $2,565,000
(thousand) in your 10K should be shown in the table as $2.565 billion, or round
to $2.6 billion. An amount reported in the millions, shown as $55,328 (million)
should be shown in your table as $55.328 billion, or round to $55.3 billion.
Table 1
Financial Results for (Insert
Your Company Name Here)
Amount (Convert to
Millions or Billions)
Balance
Sheet Items:
Total
Current Assets
Total
Assets
Total
Current Liabilities
Total
Liabilities
Total
Equity
Total
Liabilities + Total Owners’ Equity
Income
Statement Items:
Total
Revenue
Cost
of Goods Sold (or Cost of Product Sales)
Gross
Profit (Total Revenue – Cost of Goods Sold)
Net
Income or (Net Loss)
Profit
Margin (Net Income/Total Revenue)
For your revenue amount and Cost of goods
sold, be sure to include Total revenues and Total cost of sales if you have
more than one revenue source and/or more than one cost of sales amount.
Then say: The results in Table 1 are key
amounts from the SEC 10-K of (your company’s name). You can comment briefly on the results in the
table here as a segue to the next section.
Balance
Sheet Terminology and Results. Begin this
section by saying what a balance sheet is and telling what it contains. Define
the three main components. Cite the source for the balance sheet definition and
the main components. If your company uses a different title, you can say what
the title is. After defining and describing the main components of the balance
sheet, write two (or more) paragraphs about other aspects of the balance sheet that
you found particularly interesting for your company. Find accounts on your
company’s balance sheet, or terms related to the balance sheet that you think
would be interesting to discuss. Tell what the terms are, define each and
provide a citation for each term. Ideally, the terms can be related in some
way. I will provide some suggestions at the end of my directions. Then tell
what you found for your company for the things you discussed and tell why you
found them interesting.
Income
Statement Terminology and Results. Begin this section by saying what an
income statement is and telling what it contains. Define the three main
components. Cite the source for the income statement definition and the main
components. If your company uses a different title, you can say what the
title is. After defining and describing the main components of the income
statement, write two (or more) paragraphs related to the income statement that
you find interesting. Find accounts on your company’s income statement, or
terms related to the income statement that you think would be interesting to
discuss. Tell what the terms are, define each and provide a citation for each
term. Ideally, the terms can be related in some way. As with the balance sheet,
I will provide some suggestions at the end of my directions. Then tell what you
found for your company for the things you discussed and tell why you found them
interesting.
This section of your paper is intended to
allow you to demonstrate that you have learned some of the basics of financial
accounting, can research and cite valid sources to support your understanding,
and can relate your knowledge to a real company’s results. Since each student
has a different company, this is where I expect to see wide variation in what
is written.
Conclusion.
Make closing remarks about the results you
found for your company. Were you surprised about anything? Did you learn
anything about your company that you did not expect? Do you think your company
has a bright future or a dim future? Is there anything about your company’s
operations you would change? You do not have to discuss all of these. Just pick
at least one or two thoughtful aspects of the company to discuss. It would be
great if you could tie your conclusions to the things you discussed about the
items on the balance sheet and especially on the income statement. This will
give me an opportunity to see if you have learned how to better understand the
financial results of a major company!
My final remarks and suggestions
The paper should be between three and five pages
in length, single spaced, 12-point font, with one-inch margins on all sides. That
excludes the Title page and References page. Use headings for sections. Double
space between paragraphs. The paper is your opportunity to use accounting terms
and concepts from our class and relate them to a company of interest to you.
The Title Page of your paper should look like
the title page of this paper, modified to show your name, course section
number, date and company. You should have a separate References (or Works
Cited) Page at the end. The References page is not included in the page count.
Use your own words. I use your written
assignments to evaluate whether you understand the concepts and materials you
are learning about in this course. Thus, you should explain in your own words,
and then cite the source that was the basis of your knowledge about the topic. Do
not copy and paste material. If you copy and paste any financial statements or
areas from the SEC 10-K this will not count toward the page length requirement.
Take care to avoid issues of academic dishonesty. Cite! Cite! Cite! At a minimum,
your Works Cited list (References Page) should include the SEC 10K and its link,
and your learning resources or another source that is where you obtained
definitions of accounting terms. Any other resources should be cited using APA
style. We use APA style for in text citations and for the Reference Page. Do
not use “WIKIs” like Wikipedia or Investopedia as sources. Every source in your
paper should be listed on the References page, and every source listed on the
References page should have been cited at least once in your paper.
Last, do not use accounting or business
terminology that you just learned about without explaining what it means. For
instance, you should not mention a term like “current ratio” unless you are
prepared to define it and explain what it means in the context of your paper!
Some ideas for discussing balance sheet
terms:
·
Compare current
assets to current liabilities by calculating the current ratio. Interpret the
meaning of the current ratio. Define all 3 terms.
·
Compare total
liabilities to total equity (you should already have defined these terms when
you described what’s on the balance sheet). What do your results mean in terms
of who owns the company’s assets? Tell what the definition of assets is if you
discuss these items.
·
Compare current
assets to non-current assets (define the terms first). Compare and contrast
them. Then do the same thing with current liabilities and long-term
liabilities.
·
Talk about what
your company’s inventory consists of (define inventory) You learned about some
ratios related to inventory, like inventory turnover and days in inventory. You
could calculate them and explain/interpret the results.
·
If your company
has a large receivables balance, use it to discuss who likely owes money to
your company (NOTE, if your company is a manufacturer, your customers
are not consumers)
·
Tell what kinds
of property, plant and equipment (PP&E) your company has. Define PP&E.
Some ideas for discussing income statement
terms:
o
Tell what products
generated revenues for the company (You should have already defined revenues when
you described the income statement). What were top sellers? You will likely
need to do some digging for this.
o
Explain what costs
of goods sold consists of for your company
o
Discuss revenue,
net income and profit margin, explaining what the results mean, and how these 3
terms relate to each other.
o
Define gross
profit percentage and profit margin. They are not the same thing! Compare
these two results for your company. If you do this, you will also need to have defined
revenues, gross profit, net income and cost of goods sold.
o
Based on the 3
years’ results on the income statement, do you see any upward or downward
trends for an amount reported (or are results mixed – going up and down?)
You can certainly use terms from your table
1, but I think your paper will be more interesting if you look for things that
stood out for you in the company’s results. For both the balance sheet and the
income statement terms, steer clear of terms you are not familiar with, or that
we have not covered in depth during the course. For instance, one company has
“Fair value of derivative instruments” on the balance sheet. It is listed as
both an asset and a liability! This would be very hard to define or explain! A
search of your 10K’s PDF file for the terms you choose might reveal information
you can use. You can also use the UMGC Library’s resources, especially your
textbook.
How
to cite sources and prepare your References page from the textbook and your SEC
10K
The
way to list your reading materials from the course site on your
References/Works Cited Page can be simplified if you are using your textbook as
your main source to define accounting terms. In the body of your paper, you
should cite the textbook this way:
Weygandt,
Kimmel and Mitchell (2020)
On
the References page, list the textbook this way:
Weygandt, J. J.,
Kimmel, P. D., & Mitchell, J. E. (2020). Accounting Principles.
Wiley.
Your References page should list sources
alphabetically. Do not number them or use bullets. Each item that has a link
should have some type of title preceding the link. Then after the title, say
Retrieved ADD DATE from (your link).
Your SEC 10K can be shown this way:
In your paper:
Company Name, SEC 10K (Fiscal year)
On the references page:
Company Name. SEC 10K (Year). Retrieved ADD DATE from (your link).
Other locations from your company’s website can
be referenced by giving the title of the page you are on, such as “About Us” or
“History”. Then add Retrieved (DATE) from, followed BY THE LINK.
