Read the Notes to the Financial Statements (FS) for your SEC 10-K company. These “notes” are displayed after the financial statements. The notes are required supplemental disclosures to a company’s financial statements.
1. Inventory comments: costing information. What do you see? WIP?
How is inventory described for your SEC 10-K company? Relate your answer to topics in our course.
Report on any costing information such as inventory valuation methods–LIFO, FIFO, and/or average cost. Comment on supplemental information provided related to inventory for your SEC 10-K company.
2. Cost and sources for production materials: notice how cost is used in the SEC 10-K
3. Comments on challenges and opportunities you learn from the SEC 10-K report related to our current cost accounting topics for your company. Details are high level in the SEC 10-K but organizations rely on Cost Accounting.
4. Briefly provide an overall SWOT (strengths, weaknesses, opportunities and threats) analysis for your corporation as related to cost accounting-related topics. Although details are high level in the SEC 10-K filing, what do you learn related to operations and strategy?
The financial statements for your company are usually posted in Item 8 of the SEC 10-K document. The management discussion and analysis section is earlier in the report.
1. The management of risk and uncertainty is often included in the SEC 10-K . Comment on the management of risk and uncertainty as discussed in the Management Discussion & Analysis (MD&A) report.
2. Divisions and Product Lines may be discussed in the MD&A section. What cost accounting issues may arise in these areas as you consider our chapters for the week.
3. Management often explains higher or lower than expected in their comments. Discuss the profitability and other comments in the MD&A section as they relate to our chapters thus on budgets, variance analysis, and management.
4. Comment on any specific cost accounting-related information in the MD&A report. For example, management often explains higher or lower than expected performance in this section of the filing. Does management discuss cost or cost fluctuations, profitability, pricing, emerging markets, competitive positioning in the global market or any other key factors and performance indicators in the 10-K filing?
Using the SEC 10-K for your company, answer the following questions:
1. Costs and fluctuations are often discussed in the MD&A section. Any comments on your analysis here?
2. Pricing decisions often relate both to knowing your costs as well as to the strategy of pricing. Competition, loss leaders, and other elements may be discussed in the MD&A section. Emerging markets and product lines are also an issue for some companies. What do you learn from your review?
3. Contingencies and liabilities: can they be estimated? Are they probable to occur? What do you learn about your company in this area? How might cost issues including profitability relate to these topics for your company?
Comment on any liabilities and contingencies as presented on the financial statements and in the notes of the filing. How might these probable or possible cost issues impact the profitability of your manufacturing company?
4. Does management disclose any information about Corporate Social Responsibility (CSR) and Sustainability policies? How would this emerging framework impact on cost and profitability for your corporation? (NOTE: Some large multinational corporations maintain a separate CSR and/or Sustainability website.)
Corporate Social Responsibility (CSR) and Sustainability relate to many issues including pollution and the cost of remediation and hazardous wastes. What do you learn about these topics from the SEC 10-K?
