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

Exercise 14

Internet-Based Team Research: Examining the Income Statement
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 lists the following information:
a. The major revenue and expense accounts on the most recent income statement.
b. Description of how the company has followed the conditions of the revenue recognition principle.
c. The percentage of revenues that go to covering expensed, and that arc in excess of expense of (in other words, net profit margin expressed as a percentage).
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 as a team observe. Provide potential explanations for any differences discovered.