Project for ACG 3301 Summer 2014

Application & Analysis

Select a company you are interested in and obtain its annual report by going to the
company’s website. Download the annual report for the most recent year. (On many
companies websites, you will need to visit the Investor Relations section to obtain the
company’s financial statement.) You may also collect the information from the company’s
Form 10-K, which can be found at
http://sec.gov/idea/searchidea/companysearch_idea.html.

Questions

1. Locate the company’s annual report as outlined previously. Find the company’s
segment information; it should be in the “Notes to Consolidated Financial Statements”
or other similarly named section. Look for the word “Segment” in a heading—that is
usually the section you need.
2. List the segments as reported in the annual report. Make a table listing each operating
segment, its revenues, income, and assets. (in millions)

3. Use the data you collected in Requirement 2 to calculate each segment’s sales margin.
Interpret your results.
4. Use the data you collected in Question 2 to calculate each segment’s capital turnover.
Interpret your results.
5. Use the data you collected in Requirement 2 to calculate each segment’s ROI. Interpret
your results.
6. Can you calculate RI using the data presented? Why or why not?
7. The rules for how segments should be presented in the annual report are governed by
external financial accounting rules. The information you gathered for the previous
requirements would be used by investors and other external stakeholders in their
analysis of the company and its stock. Internally, the company most likely has many
segments. Based on what you know about the company and its products or services, list
at least five potential segments that the company might use for internal reporting.
Explain why this way of segmenting the company for internal reporting could be useful
to managers.