Gustavus Adolphus College
PORTFOLIO PROJECT
Intermediate Accounting I
Fall 2001
Instructions
Project Purpose:
To comprehensively apply accounting knowledge and analysis using a real-world company Annual Reports. To recognize and identify differences in accounting globally. And to prepare a professional quality report for the course.
The project will focus on two stock exchange listed companies.
The first company is to be a US based company. The other is to be a foreign company in the same industry.
Hint: A company you might like to work for, one you admire, one your buy from, one you think earns a high return to shareholders, one you think is socially or environmentally responsible (or not), one of special interest to you, a favorite or one you invested in could be a good choice.
This project has primarily an accounting focus and intent, but there are also some financial aspects.
Basic Requirements:
1. Form Decision Teams of two or three students. Hint: You need to be able to work together and meet conveniently and regularly. The Decision Teams are to be the same as for regular homework. (Also see Decision Teams in syllabus.)
2. Pick a domestic, US based consumer products, manufacturing or service company, from any industry, listed on a US stock exchange. But…No financial companies, such as banks, are allowed. The company name must start within the alphabetic scheme of A thru Z. Hint: Some resources you might consult include: your textbook, The Wall Street Journal, various internet sites and financial publications, products you use, shopping you do, etc.……… (Hint: Just because a product does not say the product was made in the US does not mean the company is not a US company.) The companies must be approved by your professor before they are used. This will be a first-come-first-served approval. It will be best to have several companies in mind, in a priority listing, in the beginning. A company will be approved only once for only one portfolio.
Note: See the Course Schedule for the dates applicable to
1. and 2. above.
3. Get an official hard copy of the latest Annual Reports. This will likely be for the fiscal year 2000, but some companies may already have reports available for fiscal year 2001. Contact the company (probably Investor Relations) directly (look up the company’s web site) or get the Annual Report from a broker or annual report distribution service company.
Hint: Do this immediately. You will need the Annual Report
to start work as soon as possible. You should find
that the Annual Report is on the company web site.
You may use this immediately to become familiar with
the company, but the Project requires that the formal
hard copy of the Annual Report be include in the
Portfolio, unless getting that report – especially
for the foreign company – proves impractical. Then,
with instructor approval, the complete web based
version may be printed and used.
4. Find and get close to the company’s web site. Get news releases here and accumulate them daily or weekly.
5. Subscribe to several news announcement sites on the internet, specifying the company you want news about. Accumulate the news releases daily or weekly.
6. Identify any other general (economic or other) news you may want to follow to help track and evaluate company. Accumulate this news daily or weekly.
7. Track the daily stock prices of the company. There are good web sites for this. Get a chart and graph.
8. Consult your textbook and any other appropriate resources as necessary for any relevant help.
The time frame for accumulating information for the portfolio is September 5, 2001 thru November 19, 2001.
Part A:
On the date specified in the course schedule submit to your professor:
1. The hard copy of the Annual Report.
2. A brief (typed in good form) report indicating:
1. Why you picked the company you picked
2. General progress
3. Information gathering process you are following
4. Success you have had
5. Problems you are having
Put these two items in a file folder, with your names
on it, so they will stay together.
All of Part A will be returned to you in about a
week.
Part B:
On the date specified in the course schedule submit a final portfolio and report as follows:
The construction and ‘Contents’ of the portfolio report for your company should be as follows:
Cover page (include, in good form, a Title, Team Member
Names, Course, Date, etc. …)
Contents page – indicating relevant section headings and
page numbers
(report):
Introduction to the project
Summary discussion and comment
Reasons you picked the companies you picked.
Over-view of accounting differences/similarities.
Preliminary assumptions about the companies.
Actual conclusions relative to assumptions.
Would you like to work for the companies?
Would you invest in the companies?
(Explain each item briefly and to the point.)
(Individual Team members may differ on the last
two items. Okay. Include the differences.)
Opinion of the Annual Reports in general
Opinion of the company web sites.
Describe differences in financial statement
form/format/presentaion.
Notes to the financial statements:
Specfically briefly summarize/state/compare
Determining sales
Receivables
Inventory valuation
Depreciation
Long term liabilities
Extraordinary items and discontinued operations
Changes in accounting principles/practices
Briefly review any other notes where you have
identified differences between the companies.
Briefly summarize specific references you find to:
FASB, GAAP, IAS, Country Accounting Standards,
SEC and foreign equivalent securities and
exchange rules, and the like.
Briefly state and compare the auditors opinions?
Stock (#7 of Basic Requirements):
Prices – graph (one sheet) and chart (one sheet)
over the period of the project
Briefly describe stock price changes and why
you think this happened
Dividend and your assessment of it – enough or not?
Financial Analysis:
Calculate the standard financial ratios
Do calculations for at least two years
(More years could be helpful)
Present the ratios in a table/exhibit
Briefly describe your conclusions as to the
companies being in good/bad shape and
getting better or worse
(Caution: Be careful. Different accounting
rules give different ratio results.)
Briefly summarize anything you found relating to
reporting and disclosure:
(This can be purely accounting and other general information you found anywhere during the project.)
1. Social Issues
2. Environmental Issues
3. Ethical Issues
4. International Issues
5. Emerging Accounting Issues
(The preceding two items can be especially useful in developing your Summary discussion and comments at the beginning of this report.)
Bibliography of all resources consulted for the
project –including (Actual print-outs are not required):
Construct the bibliography in these three sections:
1. Company web site (#4 of Basic Requirements)
2. News sites (#5 of Basic Requirements)
3. Other (#6 of Basic Requirements)
For web information always give the full web address and a title for the item and the date you accessed the info.
(Hint: Copying and Pasting the web addresses into a bibliography summary file can facilitate this.)
Regarding the Portfolio Project
Your general opinion of the assignment
What you liked most and learned from the
assignment
Any Suggestions for improvements
Annual reports (#3 of Basic Requirements (Part A.1.))
Part A 2. Submitted earlier and returned to you.
***** END of REPORT ******
One a separate sheet of paper, at the end of the project, each team member must individually submit an evaluation of how the team worked over-all and how each tem member – including yourself – performed/contributed.
Professor’s Expectations:
The portfolio and final report will look professional.
(Assume a major promotion and pay increase depend on it.)
The portfolio will be nicely bound.
There will be nice divider tabs between major sections and relevant sub-sections – enough but not too many.
Divider tabs will be nicely labeled.
The ‘report’ will be meaningful, complete but not too long. Be brief and to the point.
Project Grading Guidelines:
Meets all requirements in an exemplary fashion = 100
Form, format, content, presentation are clean,
crisp, to the point, and cover all requirements.
Few minor errors or shortcomings = 95
Several but relatively minor shortcomings = 90
One or two serious shortcomings = 80
Substantial shortcomings/average work = 70
Seriously deficient in form, format, content, et. = 60
Grossly deficient or not done = 0
There may be a final exam question(s) related to this project.
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