Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 7

Internet-Based Team Research: Examining an Annual Report
As a team, select an industry to analyze. Using your Web browser, each team member should access the annual report or 10-K for one publicly traded company in the industry, with each member selecting a different company (see S1-3 in Chapter 1 for a description of possible resources for these tasks).
Required:
1. On an individual basis, each team member should write a short report that incorporates the following:
a. Calculate the debt-to-assets ratio at the end of the current and prior years, and explain any change between the two years.
b. Calculate the asset turnover ratio at the end of the current and prior years and explain any change between the two years. (To calculate average assets for the prior year, you will need the total assets number for the beginning of the prior year. If this isn't reported in the summarized financial data section in the current annual report, you will need to get it from the prior year's annual report or 10-K.)
c. Calculate the net profit margin ratio at the end of the current and prior years and explain any change between the two years.
2. Then, as a team, write a short report comparing and contrasting your companies using these attributes. Discuss any patterns across the companies that you observe as a team. Provide potential explanations for any differences discovered.