2) Summary of each company’s business model and structure
• Provide a paragraph write up of how each company makes money. What is their business model, what products do they sell and who is their customer base? How are they organized, do they have different segments or lines of business? How many locations do they have? Feel free to include other potential information that would be of interest to investors. You will have one paragraph for company A and one paragraph for company B.
• You are encouraged to glean this information from the introductory section of the company’s 10K but remember you are summarizing this information in your own words. You may use outside internet resources as well. Do not copy and paste directly from the 10K or your outside resources. Summarize information in your own words.
3) Company Size Analysis
• Different factors determine the “size” of a company. Prepare a side by side comparison chart that shows at least the following items often used to describe the size of a corporation. Feel free to include other measures if you they are relevant.
• Dollar amount of sales/revenues
• Dollar amount of net income
• Net income expressed as a % of total revenue/sales
• Total assets
• Market value or market capitalization
• Provide a brief text explanation that analyzes and interprets the chart for your audience. Address items such as what measures in the chart are interesting, which company would you classify as the larger corporation, etc…
4) Business Environment and Risk Factors
• For each company, briefly describe the business environment in which the company operates (the industry it is in, its competitors, how competitive is their market, is a political climate a factor?).
• All 10Ks have a section called 1A Risk Factors. This can be a lengthy list of all of the possible risks management could face. For each company, read through this list and choose the 2 risks you feel are most significant. Discuss these risks and why your team believes they are significant.
1) Auditor Reports:
• What audit firm performed the audit? Identify and read the auditor’s reports. Highlight the key phrases in each report that denote the auditor’s opinion. What comfort do the reports provide potential investors?
Sample Solution