ACT 5140 FINANCIAL REPORTING PROJECT 2016

| March 29, 2017

Question
FINANCIAL REPORTING PROJECT

Background:

The purpose of this comprehensive project is to use a variety of resources to research a corporation. You will also prepare a written paper describing your corporation and summarizing the findings you have developed in the first three parts of the project.

Instructions: You will be using Dow Chemical Company. You can find the Company’s financial statements along with the Notes (to the Financial Statements) on the company’s Form 10-K that it files with the Securities and Exchange Commission (SEC). At the end of this document, there is information and a link to a tutorial video on the 10-K and how to find your company’s 10-K.

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DETAILED REQUIREMENTS:

I. Requirement Part I

A. Research and then describe your company’s primary business activities. Include:

1. An historical summary,

2. A list of competitors,

3. The company’s position within the industry,

4. Recent developments within the company/industry,

5. Future direction, and

6. Other items of significance to your corporation.

B. In addressing the above, don’t forget to include information from a variety of resources. For example:

1. Consult the Form 10-K filed with the SEC. Please review the information at the end of this document for information about the Form 10-K.

2. Review the Annual Report and especially the Letter to Shareholders

3. Explore the corporate website and report some of the interesting features of the site.

4. Select at least two significant news items from recent business periodicals

Submit a written report that is 3-4 pages long. The report should be well written with introductory and concluding paragraphs. References must be appropriately cited. Be sure to address all of the points in Section A above, using all of the resources listed in Section B. Format: Double-spaced, one-inch margins, using a 12-point Times New Roman font. Include a complete bibliography.

II. Requirements Part 2: Common Size Statement Analysis.

Using the company’s income statement and balance sheet, prepare common sized income statement and balance sheet for the years 2014 and 2013. For the common size income statement, use sales of each year as the base for that year. For the common size balance sheet, use total assets as the base. See pages 498-499 for an example of the format to use. Comment on the condition of Dow Chemical Company, drawing on the common size statements. Your comments should be at least 150 words.

III. Requirement Part 3: The purpose of the second part of the comprehensive project is to compute financial statement ratios. Show all information in an easy-to-read tabular form.

A. Compute the 9solvency ratiosfrom page 487 for the past three years. Display your answers in a tabular format. Indicate on your worksheet whether each ratio is: stronger / weaker ; quicker /slower ; more / less liquid ; or more / less risk. Below your table, comment on the financial condition of the company with respect to short term solvency and long term solvency. Your comments should be at least 300 words. On a separate page, show how your answers were calculated.

B.Compute the 11performance ratiosfrom page 487 for the past three years. Display your answers in a tabular format. Indicate on your worksheet whether each ratio is: stronger / weaker; quicker /slower ; more / less liquid ; or more / less risk. Below your table, comment on the financial condition of the company with respect to performance. Your comments should be at least 300 words. On a separate page, show how your answers were calculated.

Format: Double-spaced, one-inch margins, using a 12-point Times New Roman font.

IV. Requirement Part IV: The purpose of the fourth part of the comprehensive project is to compare Dow Chemical Company ratio results to ratios of one of its top competitors. Show all information in an easy-to-read tabular form.

A. Obtain the four-digit primary SIC (Standard Industrial Classification) Code and industry title for your company. Record the primary SIC code and industry title at the top of your Ratio Analysis Table/Spreadsheet.

B. For a competitor company with the same SIC, calculate the following ratios for the two most recent years.

1. Compute the 9solvency ratiosfrom page 487 for the past three years. Display your answers in a tabular format. Indicate on your worksheet whether each ratio is: stronger / weaker ; quicker /slower ; more / less liquid ; or more / less risk. Below your table, comment on the financial condition of the company with respect to short term solvency and long term solvency. Your comments should be at least 300 words. On a separate page at the end of your paper (the Appendix), show how your answers were calculated.

2.Compute the 11performance ratiosfrom page 487 for the past three years. Display your answers in a tabular format. Indicate on your worksheet whether each ratio is: stronger / weaker; quicker /slower ; more / less liquid ; or more / less risk. Below your table, comment on the financial condition of the company with respect to performance. Your comments should be at least 300 words. On a separate page at the end of your paper (the Appendix), show how your answers were calculated.

C. Submit a report. Write a 2-4 page report comparing Dow Chemical’s ratios to its competitor’s ratios for the two most recent years. Discuss whether Dow Chemical’s profitability, liquidity, and solvency are better than, or worse than, its competitor.

Format: Double-spaced, one-inch margins, using a 12-point Times New Roman font

V. Requirement Part V:

A. Prepare a well-written titled “Would You Advise a Friend to Invest in This Company?” based upon your research and analysis of this company’s financial information. Identify 3-5 significant points that justify your conclusion. Support your points with a comprehensive explanation incorporating sound reasoning.

B. Submit a report that is 3-4 pages long. The report should be well written with introductory and concluding paragraphs. References must be appropriately cited.

Format: Double-spaced, one-inch margins, using a 12-point Times New Roman font.

End of Assignment!

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INFORMATION ON THE SEC FORM 10-K

The Form 10-K is a document that publicly traded companies file annually with the SEC. The Form 10-K contains the same financial statements that the company’s annual report does, but in a more detailed form. In addition to more detailed financial statements, the 10-K allows you to find out additional information such as the amount of stock options awarded to executives at the company.

You can find your company’s Form 10-K by visiting your company’s website or going to the SEC.gov website.

Here is a link to a YouTube video that shows you how to find your company’s 10-K on the SEC site.

.youtube.com/watch?v=TkpyuNEGO4A”>http://www.youtube.com/watch?v=TkpyuNEGO4A

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